If the most successful developments offer a mix of uses, is the reverse true? Is a scheme, a shopping centre, a high street or even a town more likely to fail, the less varied its offer? And is turnaround even possible?
In struggling city centres – those with small shares of highly productive firms and jobs – retail accounts for twice as much space as offices. Successful city centres, in contrast, have more than three times more office space than retail, according to a Centre for Cities report this week.
But the solution to growing retail vacancy isn’t more, or different, retail. The solution is housing. It’s also offices. In other words, it’s variety. And it’s far easier said than done.
With John Lewis to close five Waitrose stores, including two in London, truly nothing is sacred in physical retail. But for a struggling town centre, problems run far deeper than just shuttering shops.
In these places a retail crisis usually says far more about health, wealth, transport, jobs and skills than it does about migration from physical to digital shopping.
Centre for Cities wants to see local and national government intervention to improve challenged urban centres. Bill Grimsey, in his second high street review to be published next week, will go further. “Don’t double down on retail” is at the heart of the Centre for Cities message. It will be there in the Grimsey report too.
And for the high street, read the shopping centre.
There are thriving centres just as there are barely surviving centres. The CVA wave sweeping through the industry is highlighting the divide.
As departments store retreat – and it’s not just CVAs, it’s retrenchment, too – owners of better-let centres spy an opportunity. For some landlords these totems of a former age account for as much as 40% of the space and less than 10% of the rent roll.
Being able to configure several floors and re-let smaller standalone spaces to brands that were once content with a concession within the department store, but now want to have full control over the shopper experience, creates an opportunity to increase rental income.
With brands the meat in the sandwich, why not have co-working spaces on the upper floors and focus the lower parts on fulfilment? For them, a department store departure is an opportunity.
For shopping centres in struggling towns it’s altogether different: another vacancy, another highly visible symbol of structural decline.
But saving struggling high streets – not the high street, some are thriving – requires complex solutions, ones that are more complex than this government has the capacity to deliver over the next few years.
This industry can’t do it alone but given that so many of the potential solutions are within the direct influence of those who lead it – combining residential, online fulfilment, start-up space and targeted physical retail – sympathetic, collaborative developers and landlords are perhaps the only near-term answer.
And as Brockton Capital puts the UK’s largest mixed-use building outside London up for sale – The Mailbox in Birmingham for £235m – and with investors now seemingly more comfortable with regional opportunities than London, the time is right to do so.
