High Street real estate needs to get real, quick!
Following recent headlines about Arcadia, I can’t help but wonder if landlords and developers will finally wake up to the rapidly changing retail landscape and take action to protect our high streets.
We are living through the most fundamental change to our High Street since the birth of the retail park at Brent Cross in 1976. Its core appeal was convenience. Buoyed by the numbers of shoppers seeking the quick and easy access offered by out of town retail centres, the new urban paradigm spread across the country and soon began to drain the High Street of its lifeblood, footfall. Over time the High Street adapted but forty-three years later, shoppers are flocking to the internet, an even quicker, easier way to shop. The depth of its impact has been profound, and our high streets are facing a new challenge.
New shopping centres, which were considered viable when conceived, are now opening with acres of new, gleaming glass shopfronts – fronting empty, unlettable space. In terms of development timescales, demand has simply fallen off a cliff. Burdened by historic high rents and falling sales, existing retailers are disappearing and Hammerson, Intu and Lendlease are desperately pursuing a dwindling list of expanding retailers who are willing to take on retail units.
For our high streets to survive, a new vitality needs to be generated. An expansion of leisure uses, new restaurants, cafes, theatres and new workplaces all have a part to play. One area where Hyphen has seen a rapidly increasing demand is in co-working space. Working with Spaces, one of the market leaders, we’ve designed over 50 offices across Europe in the last year alone. Co-working space has naturally evolved to serve the needs of young, dynamic small businesses for flexible space close to city centres where motivated, multi-skilled staff cluster. They are helping to bring a much-needed vitality back to the High Street.
However, if these new uses are to have any chance of re-enlivening our townscape, landlords will need to rethink their rental expectations. This has been the case with Arcadia, where despite some landlords voting against it, their CVA was approved and rental terms have been reduced. With billions invested, it is not surprising that landlords are taking time to come to terms with the new reality, but they may not have years to change course.
Apart from expanding new uses to enliven the High Street, the retail offer has to change. Hyphen is proud to have been part of the development of the shopping experience, working with department stores such as Selfridges, and retailers such as Tommy Hilfiger and LUSH, who have embraced the new environment and created high-tech, interactive retail spaces with the leisure experience at its core.
At Hyphen, we refuse to look at these challenges with a heavy heart but look forward to playing a part in the modern evolution of our High Street.