As the end of lockdown is in sight, inevitably attention has turned to the summer and just what a return to normality could mean for our high streets.
Many argued that Monday was too late for shops and restaurants to reopen. Finding the right balance between public health and the economy will be crucial to success, but it isn’t set to be all doom and gloom, there are a number of reasons for optimism.
With international travel remaining under a cloud of uncertainty the staycation is the main focus for those looking to get away this year. Mintel estimates that £7.1 billion will be spent on UK holidays between July and September this year. Alongside the demand for accommodation comes the spending money set to be deployed on our high streets, in local restaurants and leisure destinations. For many new and existing operators there will be the opportunity to capitalise on this rush.
It is undeniable that 2020 was an awful year for the retail and leisure sector. According to the Centre for Retail Research there were 16,045 store closures. There is a massive oversupply of retail in the country and there will be more restructuring and CVAs to come. It will be particularly important for retailers to respond to the changing behaviours we have seen through the pandemic and those who remain outdated will disappear.
From the ashes rises the phoenix...
and we are already seeing a flurry of new businesses that will open as the pandemic, and further re-basing of national rents, has reduced the barriers to entry. There will now be stores on the high street that will be affordable to new operators. We are already seeing a number of acquisitive brands actively looking for premises on far more flexible terms than we have seen in recent history. With high street names such as New Look, Monsoon, Moss Bros and more all undergoing CVAs there will be a glut of space set to be filled. There’s not been a cheaper time for several decades to get into some of the best space, and it will be the prime pitches that attract the most attention as a flight to quality will dictate activity in the coming year.
Regardless of how many new occupiers capitalise on the advantageous conditions, there is still a vast oversupply of retail and leisure space nationally. With Arcadia and Debenhams among the high street casualties, along with recent news of John Lewis planning store closures there will be a huge amount of vacant space to deal with. In many instances these are complicated assets and many retail buildings have been designed for that specific use, or have adapted to moth ball uppers, when the previously valuable ground floor space was the focus. On a positive note, many are in prominent positions and are attractive buildings, but these often require an innovative approach to repurposing, combined with a keen eye for cost management.
Town centres need a mix of uses to re-generate.
The BBC housing briefing reported last month that there is an under supply of 1.2 million houses across the UK. The focus on the delivery for these homes should be in urban regeneration schemes and the planning system should prioritise these. Edge of town housing developments may be the easy option to deliver numbers, but this seems crazy when large chunks of once vibrant towns remain empty.
Private, affordable and social housing combined with co-living, student and retirement accommodation will play a major part in the re-purposing of our retail landscape. Re-populating our town centres will start a chain reaction of other uses; community, leisure, flexible working, office, hotel and retail will come together to create a multipurpose centre once again.
Although we still have a rocky time ahead of us, the summer is certainly looking more hopeful. As people are steadily allowed to spend more time outside of the home, the high street is set to be one of the big benefactors, but it will not return to how it was. While the government purse is focused on support we must also look to how we fund and incentivise regeneration at a local and national level.
About the Author
Lloyd Entwistle has 15 years experience in the retail market and specialises in leasing and development advice nationally. Lloyd focuses on driving performance of prime assets through active asset management for a wide range of institutional and private landlords, property companies and developers.