There is one inalienable truth about the retail property world as we prepare to enter 2018. Having prospered through a large and stable retail environment over many decades, we now have significantly more retail space than we need.
Supply exceeds demand in the most basic analysis and this oversupply is strengthening the headwinds facing retail property.
Naturally there have been attempts to explain this away by polarising the debate between ‘primary and secondary’, but this is too simplistic.
We also know that, for all the conjecture from the City, this is not just a problem facing landlords. Occupiers and local authorities are also struggling to come to terms with our changing environment. Indeed, never have the three groups been so aligned in working together to find effective and long-lasting solutions.
Revo – where I became president this week – will do everything it can to facilitate this in 2018.
We may shop around, but what the consumer wants is a vibrant town centre
All our towns, cities and suburbs have a continued need for a physical heart. Local pride and social engagement is in our DNA.
We may well shop around, physically and electronically, but what the consumer wants is a healthy and vibrant town centre.
We tend to overlook people’s loyalty to their towns, but it shouldn’t be surprising when we consider the passion with which we support our local sporting teams.
That loyalty has, however, been tested. There are many town (and out-of-town) centres where it is obvious to anyone that a lack of investment over a long period is taking its toll. This is often at the margins of the centre and often where multiple ownership exists, but to the public it doesn’t matter who is to blame.
Communities just want places that they can be proud of and that serve their needs. This means creating uses other than simply retail – mixed environments where we work, rest, play and shop.
We have to focus our efforts on cutting out the weak peripheral retail and strengthening the core, adding wider and more relevant uses and providing a healthier environment that we can enjoy.
All of this requires active management and investment. There are great examples of where this rejuvenation and evolution is happening across the UK. Indeed, Revo showcased a wide range of them at our annual dinner on Wednesday – well done to the winners.
A big #thankyou to hosts @RevoLatest for a great evening last night, and to our table for the excellent company! @BC_Consultancy @ellandi_llp @TristanCapital @WGTPS #RevoGolds pic.twitter.com/G2nAiZTypM— turnerbates (@turnerbatesUk) December 7, 2017
But this change needs to be accelerated and explained. We have a healthy industry, but its image is tarnished by a lot of space none of us would attempt to defend – the tired, boarded-up shops, parades and early-generation retail parks where footfall has declined.
These are the places that have to be given a new lease of life.
It is these places, though, that grab the headlines and make retail a tough sector to invest in. That helps no one. At Revo, we want to establish the sector as a growth area by transforming its sense of purpose.
Local authorities and government have a role to play here. Less of a fixation on taxing us to death through business rates and more positive intervention through leadership, planning, infrastructure investment and local intervention would definitely help.
And as an industry we need to better explain ourselves. We must showcase and accelerate the innovation that is happening and illustrate how the sector works well for all.
So let’s not ignore the need to prune away the weak and nurture the healthy. Happy gardening in 2018.