It has certainly been an eventful first half of the year, with worries over retailer CVAs and job losses on the high street now evolving into broader concern for the long-term health of town centres across the UK, writes Lawrence Hutchings, chief executive at Capital & Regional.
Earlier this month Bill Grimsey released his long-awaited report into the future of town centres. He offered 25 recommendations, ranging from the broad brush (such as fundamental reform of business rates) to the granular (such as installing LED street lighting).
Grimsey’s report is clearly well timed – and it is hard to disagree with any of his findings – but we must be careful not to overlook the fundamental point that town centres are shaped by people as much as policy.
Indeed, I think we need to re-set how we think about high streets and town centres, both proxies for physical retail, and recognise that success rests on the ability to respond to people’s sensory and emotional needs.
I think we can in fact take some reassurance from recent headlines on “the death of the high street” because it is clear it remains an emotive subject and communities continue to see their town centre as a key reference point in terms of their outlook, aspirations and social mobility.
Resilient places
Furthermore, the long-term global trend of urbanisation points to the fact that people want to be in well-connected locations, and this suggests to me that town centres will continue to be resilient places if shaped and managed correctly.
This is reflected in our own portfolio of town centre community shopping centres, which saw 37.9m shopper visits in the first half of the year, representing growth of 1.7% (versus a 3.4% decrease nationally).
Our leasing success so far this year – we have completed 21 new leases and 23 lease renewals at 2% above ERV – also points to the fact that many retailers still see town centres and high streets as the engine room of their business, where they meet the everyday needs of the local community.
Cultivating a sense of community and local pride is an important factor in creating vibrant town centres in which retailers can trade well.
The fervour with which we support our local sports teams is indicative of a wider local pride many of us feel, and – as Grimsey rightly suggests – we should we make sure that town centres reflect and celebrate local identity and heritage.
Even small gestures can make a difference. When we refurbished our Walthamstow centre we incorporated references to local well-known people such as William Morris, inviting input from local people into the design. This really helped strengthen the connection with the community.
Lifeblood
Every town centre should look and feel different, and the demise of some ubiquitous retail brands is actually helping put an end to a “one size fits all” mindset. Increasingly we see local and independent retailers as the lifeblood of our centres, representing about 30% of our customer base overall. Our challenge as asset managers is to identify these businesses and nurture them through the delicate early stages of their development.
Grimsey is right to suggest there is oversupply of retail space in some locations, and town centres must evolve to be multi-functional. Historically town centres accommodated homes, workspace, retail, community and civic uses, until the advent of planning zones. The future of town centres is actually a return to the past, with more flexible spaces and a greater diversity of uses.
So what is holding us back?
One major obstacle is the fragmented ownership of many town centres, which makes a local plan very challenging to deliver. We are fortunate in that we have secured majority ownership of the town centres in which we operate, but in most cases the local authority has the difficult task of bringing together a disparate group of asset-holders who do not necessarily share the same objectives.
The second obstacle is the planning system. The government seems to recognise that the future health of town centres is an important socio-economic issue, and yet the application of planning policy is often not supportive. Even though there are countless examples of the damage done by out-of-town development, we are still seeing schemes consented – to the detriment of town centres and communities. Furthermore, we need a system that is more agile, and allows us to respond quickly to changing consumer habits.
The debate on the future of town centres must continue as these places have an intangible value in representing the aspirations of communities across the UK. It is important that we get the next phase of their evolution right.
