By Clive Darlow
In addition to its own inherent dynamic expansion, the retail development industry is always quick to capitalise on the growth of other sectors. This is usually achieved through marrying-up and accommodating new types of activities and uses within the next wave of shopping centre development. The fusion between retail and leisure, or tourism and boutiques and stalls, or entertainment and stores and shops, or craft industries and shopping, is all increasingly commonplace. The more successful a shopping centre is, the more ancillary activities it attracts around it: garden centres, home improvement stores, DIY units, hypermarkets, motels, offices, libraries and other social services are all commonplace. Perhaps most frequently found are those which cater for the needs of the motorist such as petrol stations, car-washes, tyre, battery and exhaust units all being typical.
The current growth in car ownership is being accompanied by a parallel expansion in the seemingly endless myriad of specialist support services. In addition to the many mechanical and engineering repair outlets (gear-boxes, clutch repairs, transmission overhauls, etc) there are the component services (tyres, batteries, exhausts, windscreens, resprays and the like) as well as the ever-expanding range of sale and fitting of accessories (radios and stereos, customising kits, mobile car telephones, seat covers and carpets, sunshine roofs). And the routine service/maintenance workshops for lubrication and oil change, tune and MOT testing, further expand the list. The range is almost endless and we still have not mentioned the place where it all starts – in the dealer’s showroom. There can be as many dealers in any one area as there are different makes of cars. Furthermore, for every franchised garage there are many more used-car dealer showrooms and display parking lots.
If a comprehensive range of all of these different subsectors of the automotive industry could be grouped together in one conveniently located, pre-planned and properly themed centre – rather like a shopping centre – could the concept work?
As with most retail development trends, the United States was first in the field. With many districts having an average of two cars or more per household the conditions were opportune for the developmet of specialist “one stop” facilities for the car owner. One of the earlier examples was at Seaside, California, which opened 10 years ago on a 72-acre site. The Gateway Autocentre has an open mall design with 10 free-standing main dealer showrooms and numerous car-related workshops, accessory shops and service outlets, as well as banks, restaurants and other general support shops, offices and services. The main new-car dealers have their premises around two circular plazas at either end of a central mall; one with four showrooms, the other with six.
The whole concept is inward looking, reminiscent of the larger conventional regional shopping centres. Landscaping, display areas, malls and street lighting are all part of an overall design theme. Main dealers typically require between two and a half and four acres and it is generally reckoned that at least four to six of these “anchor tenants” are needed to give an auto-centre the collective customer pulling power that is needed to support a comprehensive development with the full range of workshops, units, service bays, shops, cafeteria.
However, not all auto-centres are of jumbo size. There is a growing number of US specialist developers who concentrate on auto-service malls in the 12,000-sq ft to 50,000-sq ft range, housing between six and 15 separate tenants. Auto-service Centres Inc, who concentrate in the Florida and Georgia region, are targeted to complete 100 of these malls by the end of the decade.
These small developments also share “common areas” with a waiting room, toilets, coffee shop, vending machine and free video/TV viewing. Many of them also run a pooled shuttle-bus service down town.
A recent survey of the relocation expansion requirements of dealers in San Francisco, in connection with a large urban renewal project, concluded that a gross built area of 1m sq ft in total would be required to accommodate the main dealers alone who were interested in taking space in the new auto-centre.
One of the interesting features to emerge from the American experience is that the new generation of auto-centres is now being planned in down-town locations where land values are correspondingly higher and sites scarcer than in the suburbs. As a result the developers are being forced into multi-storey projects rather like a large department store or a downtown shopping centre; as part of the overall development a multi-storey adjacent car parking facility is provided for visitors.
The study concluded that a minimum of seven acres is needed to house 1m sq ft of floor area in part three- and part six-storey buildings.
Prospective main dealer tenants were asked to choose from one of the five design alternatives for a downtown location:
(1) Totally separated, individual, free-standing units within the site.
(2) Separated free-standing units but with selected activities housed in a central joint facility within the site.
(3) A multi-level facility with all dealers under one roof, but each having their own distinct identity and without any joint facility.
(4) A multi-level facility all under one roof, each dealer with their own independent identity, but selected activities in a joint facility.
(5) A multi-level facility with joint sales, service and support areas, ie the “auto-department store” concept.
Of these five alternatives every dealer interviewed opted for no 4. The particular components of the “joint facility” which dealers were keen to share jointly, or subcontract, included a central open car-display mall, a new car receiving area, waiting area and rest rooms, a shuttle bus service, customer car parking, a petrol filling station, car wash installation, cafeteria and lounge and subsidiary malls housing repair units, accessory shops, specialist suppliers and engineering/repair services.
A number of developments have been reported in Europe, with France appearing to be in the lead position. The first “Hyper-Auto” opened last year in Nantes with a 20,000-sq ft development surrounded with 10,000 sq ft of parking. “Auto City”, the brain child of property developer and car enthusiast Jean Loup Brugere, has just announced plans for 15 projects over the next five years; four are to be around Paris (each with around 120,000 sq ft of buildings plus parking).
Here in the UK one “national” auto-centre is known to be under active discussion – with the Midlands as its preferred location.
If the American experience is repeated, much of the driving force behind the demand for space will come from the major franchise holders’ offering of parts and services. They will be spared the trouble of finding and setting up individual “free-standing” units for their new franchisees.
Auto-centres are labour intensive and therefore have considerable political appeal in areas where unemployment is an important issue with the electorate. They are a welcome generator of more rate income. On the planning front they provide an opportunity for the many scattered, unsightly and non-conforming users to be corraled, over time, in one specially planned landscaped and centrally managed themed development. This in turn will relieve environmental, infrastructure and traffic problems elsewhere. And these old, scruffy and inappropriately used sites can then be released for more acceptable forms of use and/or development when the current occupiers are relocated.
Auto-centres also provide potentially suitable development solutions for difficult sites; for example disused railway yards, gas depots and particularly large redundant industrial sites and buildings. One of the projects in California, for example, is being located in a large vacant dockyard pier.
It is of course this type of site which often has the worst problems associated with it, but the sites are frequently the ones most likely to benefit from the range of government grants and financial incentives. If situated in an enterprise zone the tax reliefs are maximised. Because of the high percentage of plant and machinery employed in, and the industrial use of, many of the units in an auto-centre, the scope for capital allowances is also widened. Potentially of even more significance is the possibility of structuring much of the development funding through a (tax driven) finance lease. Although some of the larger, main dealer sites, might be ground lease and thereby relieve the need for development capital on the part of the promoter, the centre as a whole would be under the management of the developer. As is the case with shopping centres, they would be viewed by investors as a complete, comprehensive, investment rather than being fragmented through the sale of individual units and showrooms.
Mark Norton of Larry Smith Consulting is advising developers in three countries on the planning of auto-centres. He views them as part of the continuing evolution of the shopping centre industry. In The London Property Market in AD 2000 (published by E & F N Spon) Gerry Blundell of Jones Lang Wootton predicts a steady growth of car ownership. By the end of the next decade he forecasts that 75% of all London households will have at least one car.
There are some encouraging indications that the UK automotive industry is expecting an up-turn. The House of Commons Trade and Industry Select Committee, which is investigating the prospects of the UK motor components producers sector, have been told that UK car output could increase by almost one-third, to 1.37 units pa by the early years of the next decade. This would bring it back to production levels last seen some 10 years ago. This renewed optimism within the industry, and the recently announced more relaxed attitude towards planning, could well provide the stimulus needed for developers here in the UK to “start motoring” into hitherto uncharted and untested areas. If their experience with retail parks and business parks is anything to go by, the pace could quickly gather momentum.
