COMMENT: The numbers are eye-watering: tens of millions of square feet on the high street are at risk. You know the names, but have you added up the numbers?
The trials and tribulations of big-box operators Carpetright and Toys R Us could leave as much as 4m sq ft of empty space in the out-of-town retail sector.
If Debenhams were to follow House of Fraser down the CVA road, that would put a combined portfolio of 22m sq ft at risk.
The future of as many as 100 Poundworld stores is up in the air; closures could see 733,800 sq ft of retail space become available, based on an average Poundworld unit size of 7,338 sq ft, according to Radius Data Exchange.
Meanwhile, Royal Bank of Scotland’s decision to close 162 branches across England and Wales will release more than 500,000 sq ft of high street space.
And then there’s SAsda.
Sainsbury’s has said its proposed £12bn merger with Asda does not include any planned store closures. But with the Competition & Markets Authority sure to run the rule over the companies’ combined 2,800-store portfolio – and 23% of Asda stores and 12% of Sainsbury’s stores lying within 1km of each other – it’s hard to imagine a merged portfolio of 118m sq ft surviving unaltered.
Add Warren Evans, Thomas Cook, Carluccio’s, Jamie Oliver, Byron, Prezzo, Maplin and New Look to that list and the potential for widespread vacancy is colossal.
Not all of that space will require reletting, of course. But millions of square feet will.
There won’t be too many retail chief execs singing “I’m in the money” over the next few months – Sainsbury’s Mike Coupe probably won’t ever again, even in the bath. Not too many retail landlords will be risking it either.
In an unexpected announcement, Shelter’s former head of policy Toby Lloyd has been appointed Number 10’s housing policy adviser.
There has been a noticeable (and welcome) shift in government thinking recently, with tacit acknowledgement that demand-side incentives are pointless without supply-side reform. But Lloyd will want to go further.
As well as considering right to buy for private tenants and considering releasing parts of the green belt, Lloyd would “reset the price of land to its true market value. That means reforming the compulsory purchase laws. The main reason why landowners are able to ask for so much for their land is because current compulsory purchase laws encourage them to”.
That won’t be music to every reader’s ears. But in a week when the high court found in favour of Islington Council in its affordable housing dispute with developer Parkhurst Road, it’s an issue which needs to be confronted.
The developer had argued that a 10% affordable housing commitment was the “maximum reasonable amount of affordable housing” it could provide as part of the 96-home former Territorial Army Centre in Holloway, N7. Islington’s assessment argued that the developer should provide 34%.
The ruling will be used by local authorities and the GLA when calling for more affordable housing commitments in applications.
Lloyd’s appointment indicates that central government is willing to be more interventionist when it comes to delivering housing. Mr Justice Holgate’s ruling will encourage local government to be more demanding of developers.
Together these developments add up to one certainty: change is coming and it’s always better embraced than resisted.
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