13 October, 2020

Could a new idea about cities reinvigorate failing bricks and mortar retail?

Over the past six months working from home I’ve watched a lot of TV news and enjoyed the novel experience of eating weekday lunch with the family. It makes a change from grabbing coffee and a sandwich from the place closest to the office with the shortest queue. Being at home in lockdown has also made me aware of how much of what we buy these days is actually delivered to our front door. It’s true that consumer behaviours have been changing for a while, but lockdown has given e-commerce a massive boost in a way that suggests a major structural shift in the whole retail landscape. An experienced retailer described it as five year’s change in five months. That means a lot of our current retail real estate is probably no longer fit for purpose. Retail landlords are beginning to respond to this change in their market and the decline in asset values by considering redevelopment or looking for alternative uses for traditional retail space. But it’s all about finding a new use that matches the changing patterns our lives will follow in the future. 

Lockdown has introduced us all to the idea of a dispersed workforce which stimulates stronger local demand and leaves our city centre office hubs empty, at least in the short term. It’s timely then that ideas like Professor Carlos Moreno’s Fifteen Minute City are gaining prominence and are currently the subject of a radical experiment by Giuseppe Salaty, the Mayor of Milan. Moreno argues that we need to re-think cities completely so that everything we need is within fifteen minutes reach. Abandoning the huge, twice daily tidal flow of people to city centres means better life experiences for many as well as causing less harm to the environment. Dispersed strategies like this would achieve a much richer diversity of uses everywhere across cities and offer some real opportunities for redundant or low value retail space to be repurposed.

So, what are the alternative uses? Food halls, gyms, e-gaming, coworking and community space are some. Space above retail has always been an untapped opportunity for residential conversion. We could take this one stage further and convert ground floor retail space to dwellings, creating a blend of residential and retail at street level. We’ve learnt from a number of our own projects that schemes like this need very careful planning and design. Much depends on the building having the right spatial characteristics to achieve good quality accommodation with plenty of access to natural light and external spaces. Early experiments have not always yielded positive outcomes but with more work the challenges can be overcome. Beyond residential, e-commerce is responsible for the recent rise in demand for last minute mile requirements which could be met by retail park and shopping centre conversion.

Unused retail can also become workspace. Local hubs are emerging which offer a flexible alternative to returning to a centrally located head office. A less formal work pattern mixing time spent at home with time at the office is a genie that’s firmly out of the bottle now, so the idea of smaller scale, local office space is attractive to many employers. It brings the benefits of working together, collaborating and social interaction with colleagues, the things that Zoom can’t replicate, right to our doorsteps.

It sounds effortless but there isn’t a one size fits all simply because the retail stock across the UK is large and very varied. As well as working financially, landlords need to satisfy themselves that conversion is achievable practically and capable of delivering quality space for its new purpose.

Existing building constraints can massively impact on what’s possible as can fire strategy and Building Regulation compliance, particularly Part L which presents particular challenges. Early analysis will address strategic decisions like demolition or refurbishment and focus on finding a commercially viable new use that best matches the form of the existing building. An old department store with a deep floor plates and poor natural light may not be suitable for residential apartments but work well as a budget hotel or workspace.

Moreno would probably argue that mixing different uses together like this creates much richer local economies spread right across our cities, as well as reducing unnecessary travel. Previous single use real estate could now become multi use and flexible, creating a stronger sense of place and more cohesive communities. Bringing people back to the high streets and centres, local business and retail will thrive again. It’s an idea that investors with an eye to the future should embrace.