The national housing shortage and the retail crisis are two of the property industry’s biggest challenges.
Demand for housing massively exceeds supply in the UK and there is no quick fix to solve this imbalance. The general consensus is that no one solution can address the historic undersupply of housing and a blend of different strategies will be needed.
Meanwhile, bricks-and-mortar retailers are fighting for survival under the combined pressure of high operating costs in rent and business rates, competition from online retailers and the unprecedented Covid lockdowns.
Many household names have gone into liquidation, most recently Brooks Brothers and Paperchase, while others such as John Lewis are looking to reduce their physical footprint.
The inevitable result is vacant outlets in both town centre shopping centres and out-of-town retail parks, which in turn is jeopardising the owners of those retail assets – the biggest casualty thus far being intu Properties, which went into administration in June 2020.
Repurposing surplus space at shopping centres and retail parks for residential use must be a credible option for delivering more housing stock. Traditional mixed-use schemes brought retail to residential with a supermarket or coffee shop on the ground floor of a residential tower. Perhaps now we should be bringing residential to retail by part-converting shopping centres and retail parks into residential use or building additional residential floors above existing retail floorplates.
While there is nothing new about retail-led mixed-use developments such as Exeter’s Princesshay centre, which boasts more than 120 residential units, nor retail-to-residential conversions such as the former department store at Danum House in Doncaster into 78 residential units, now must be the time to capitalise on this unique opportunity to build much-needed homes while arresting the demise of shopping centres and retail parks across the UK.
Clare Breeze is partner and co-head of the Macfarlanes real estate practice