The recent news that Wilko was going into administration came as no shock to those of us working within the world of retail estates.
The high street retailer followed many renowned UK brand names over the last decade in its economic demise including Woolworths, BHS, Debenhams, Arcadia and Toys R Us and there has been much discussion previously and recently about the operational failures of these brands. However, what really interests me as RLB’s National Head of Retail is the lingering empty spaces that they leave behind in our communities, the opportunity within these spaces and how forward-thinking developers, local authorities and investors are working with companies like RLB to help reshape and repurpose the once thriving retail units into community centric spaces.
Recently unveiled data from the Local Data Company revealed that as of today 50.3% of Arcadia’s former space is still unlet since 2020, 41.4% of Debenhams former space remains unlet since 2021 and a stubborn 8.4% of former BHS space remains unlet since 2016. Let’s not pull any punches here, these spaces are often not simple to re-purpose, they take a huge amount of design, structural alterations and vast quantities of material and cash to bring about a turn around. These schemes can often be years in design, local consultation, planning and of course funding. It takes a partnership, often public and private working hand in hand over the long term and the reality of our ever changing fiscal climate presents another major set of challenges that change business models and commercial outcomes meaning patience and persistence can be the key ingredients to success.
But success is out there, recipes for success have evolved and continue to do so. In the last year alone, we have seen old retail spaces being transformed into coworking spaces, meeting places for community groups, cookery schools, art and creative spaces, gyms and fitness centres, local healthcare and wellbeing hubs and health screening clinics, pop up marketplaces, pop up food and leisure spaces amongst other uses. These changes of purpose are not being undertaken by opportunists or knee jerk reactions of those thinking they can succeed where many of the larger brands have failed, but in my opinion, they are a key part of the formula for success.
Understanding the local market
It sounds obvious that you need to provide services or products that suit local markets, but if you look at town centres over the last few decades, they have often followed a similar smorgasbord of the same chains offering the same thing regardless of the demographic of the area. What is becoming apparent now is that those developing and investing in town centres are looking at local culture and the different building stock within areas combined with the needs of the local community before they cut and carve. One example of this is the recent Great Oaks project we have been working on with Basildon Council where the RLB team advised on cost management. A redevelopment of two retail units into a new office and creative campus for the screen and immersive digital industries, the project aligning with the local college that offers digital and technology courses and is targeted at local entrepreneurs and start-ups within the surrounding area.
Collaboration between private and public sector
Which leads to collaboration between private and public sector. Many schemes that are seeing success are where the new development doesn’t sit in isolation and has a public/private sector collaboration at its heart. So, if it’s in need of a new health or wellbeing space, it could provide an opportunity for a joint venture with an NHS Trust or a private offering of a wellbeing or healthcare service that complements the NHS offering locally.
Adding value to the community
Of course, adding social value to the community not only works hand-in-hand with many property stakeholders’ own ESG agendas, but helps with planning and approval of new developments. In turn, the value added to the town centre makes it more attractive to visitors, bringing in more footfall and creating more buzz, something we know has been lacking in many high streets, for many years.
Working towards communities’ sustainability targets through green spaces
We are also seeing those developments that create green spaces within town centres to relax, enjoy while they shop, eat or drink are having more success. Again, feeding into the ESG agenda for both local authorities and companies investing in the area, they act as areas for local and visitors to gather, bringing traffic into areas and increase visit times to town centres.
And finally, spaces that bring a sense of community, or connectivity and ownership from the inside out rather than imposed on a community are gathering pace. Community spaces where they chose the itinerary – whether it is art for young and old, or dog grooming or training – and those that bring connectivity in the sense of tech, also encourage visitors to come and work and play.
Through the clever and collaborative reinvention of our redundant retail spaces, integration of new omnichannel strategies, focus on community engagement, sustainability initiatives, and most of all flexible lease structures, retailers and property owners are beginning to bring to fruition schemes to meet the evolving needs and expectations of communities and customers alike. By embracing these transformations, the retail property sector is well-positioned to thrive in an increasingly dynamic and competitive market.
For funds or asset managers understanding how to turn around an asset or increase its capital value within an area might mean having local people on the ground who understand the local agenda or those who can act as the advisor between local authorities and other stakeholders. High street will always have its place in community and those high streets that continue to thrive are those that understand their role within that community.