Build it, but will they come?
Evolution in design and development planning has largely led to substantial improvements in the quality of life and experience for the societies that increasingly inhabit urban landscapes around the world.
A vibrant retail property sector has long been a fundamental component of this ecosystem. However, as the scale of supportable space requirements diminish, driven by customers' connections to digital and accelerated by Covid-19's pressure on consumer behaviours and spending patterns, how can we expect our streetscapes to evolve?
The recent announcement by the UK government to implement radical reform to the planning system, includes new regulations that will give greater freedom for buildings and land in town centres to change use without planning permission, and to create new homes from the regeneration of vacant and redundant buildings. A vacant unit previously used for retail can be permanently switched to a cafe or office, without requiring planning approval, and a wider range of commercial buildings can be changed to residential. Certain `essential' services, such as pubs and libraries will be exempt from the changes.
Examples of such re-purposing are already in play, with Westfield London recently gaining approval to convert two thirds of the 104k sq. ft House of Fraser department store unit into a co-working space. Similarly, John Lewis recently announced that as they re-purpose and potentially reduce their store estates, the concept of implementing new mixed-use affordable housing is being explored, along with other avenues such as horticulture and market-places promoting the circular economy. Retail floorspace growth has traditionally been driven by the binary requirement to connect customers to vendors of products, but as digital has changed the dynamic – for retail, as well as dining, banking, and even healthcare, the question of optimal asset programming becomes ever-more complex.
Perhaps a new way to consider the opportunities should be more focused on the analytics of an urban centre's demographic population and how people want to spend their time, as well as how they spend their money. The need to understand daily and weekly repertoires is becoming increasingly pronounced as lockdown rapidly shifts workforces to home working, and even education to online.
Providing a valuable return on time spent in any given location, will increase the attractiveness, footfall, dwell, and overall enjoyment of a place, and with that, comes the opportunity for spend. The American Time Use Survey is one of the most comprehensive global studies of how, where, and with whom citizens spend their time. Interestingly, the proportional time spent across daily activities has remained relatively consistent over the years, albeit with some variations, along with changes in the end use. Unsurprisingly, sleep and personal care occupy the most amount of time (housing), followed by work related activities (offices), then leisure (largely TV, but also socialising and sports), eating and drinking (F&B), household activities (cooking and cleaning), then purchasing (retail). As ever, the devil is in the detail, with significant variations by age group, gender, and income.
The most successful developers will have an acute understanding of their target customer base, the mix of facilities, services and experiences that their customers want to spend their time and money engaging with, and how this relates to the current and planned dynamics of supply in the catchment.
Whilst a wholescale re-purposing of vacant retail to occupied housing may be considered the easiest route to creating a captive audience, finding the appropriate reasons for residents to spend more of their time and money on site and in the immediate catchment will be crucial to delivering vibrant communities that provide a valuable return on people's time and enhance long-term asset value.
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