Challenges for Retail Regeneration - a round table discussion

Five-to-ten years ago, retail heads of terms would typically include just a small section on sustainability. Today, sustainability requirements feature prominently in leasing agreements and play a vital role in the sector’s drive to net zero. 

One of the key sustainability challenges facing developers, given the massive oversupply of retail spaces in the UK, is whether to demolish and rebuild ageing assets, or repurpose and reimagine them. Rebuilding provides the opportunity to leverage new green methods and materials, such as timbers frames, renewable energy generation and landscaping. But is it right that these assets, some of which aren’t even 40 years old, should be swept away and replaced? Is it right that all the embodied carbon in these structures will have had such a relatively short life?

Often, said Charlie Royle, Executive Director at AEW UK Investment, ​“there’s going to be a trade-off between keeping that embedded carbon [in the building] versus the social benefits of completely repositioning something.” Some buildings, explained Royle, ​“we’ll have to knock down because we can’t reposition them; the floorplates are too deep…the structure doesn’t work.” But on other sites ​“we’re working extremely hard to keep as much of the fabric of the building as possible.”

Participants agreed it’s too early to tell whether occupier demand will be driven by repurposed assets or new green buildings. Where possible, said Royle, the best approach is ​“keeping [some] of what you’ve got, and then building new to improve the retained element of it”. In this way, by balancing rebuild and repurpose, developers can minimise environmental impacts while maximising the social benefits of asset enhancement.

Many of the challenges facing UK retail today are the result of past efforts to homogenise highstreets and town centres. 

Will Thomas, Partner at KLM Retail, pointed to the example of Lincolnshire Co-Op, whose regeneration scheme for Lincoln is built on a long-term vision that’s being delivered through engagement with local people and local contractors. ​“They’re ensuring that what’s created is relevant for Lincoln,” said Thomas; ​“relevant for the personality of that city and for [the people] who live and work and shop there.”

Bespoke design interventions will make urban retail vibrant and viable. They will also enable town centres to remain intact to continue their own evolution, rather than driving development out to peripheral locations. Further, consumers are becoming wary of short-term, off-the-shelf solutions, as Simon Forster, former CEO of Selfridges, reflected: ​“You have to come up with point solutions for individual places, because customers will spot something that’s a cookie-cutter that’s not going to last ten years.”

Difficulties with town centre regeneration are often linked to ownership and leadership. In the regions in particular, ownership can be fragmented, so the relationship between asset owners and local authorities is critical.

During the roundtable discussion, Manchester was cited as an example of a city that’s had tremendous leadership, whereas other urban centres have been less fortunate. Indeed, in towns and cities where regeneration projects have struggled, ​“poor leadership by the local council” was identified as a key contributing factor. What’s needed, suggested participants, are local authorities with drive and ambition and someone at the top who’s willing ​“to put their neck on the block”. 

Asset owners and local leaders certainly need to work together. As John Percy, Partner at Montagu Evans, observed, retail regeneration ​“needs cross-party support; it needs shared objectives because it can involve difficult choices…[relating to issues such as] building heights or uses.” Working together to address these challenges, said Percy, ​“is sometimes the only way to unlock” the situation and move forward. 

Today, basic retail requirements and convenience needs are met online, in retail parks and in the major regional shopping centres. Town centres therefore need to offer a rich mix of uses and experiences to generate footfall. As Will Robinson, Director at Areli Real Estate, remarked, ​“you have to create a destination where people want to be; you’ve got to create a real experience and a bit of theatre” to attract new crowds and consumers.

And it’s the public realm that can provide these experiential dimensions. Compelling public places and spaces, such as parks and landscaped areas, help to pull people into and through urban centres, in turn creating value for the surrounding buildings and businesses. Similarly, it’s the publicly accessible ground-floor areas that create a sense of place and experience, drawing people in then compelling them towards the more commercial propositions above. 

In this way, the roundtable participants supported the notion that by creating the best possible spaces and retail environments, focusing on quality, experience and care, developers will naturally address other key considerations. Vibrant and experiential urban centres will drive social value creation, which in turn will drive financial value creation. ​“It’s about being ethical and profitable,” said Simon Forster. ​“In my mind there’s no trade-off between the two.”

Sense of place leads to sense of pride. And people need to feel pride in where they live. Such pride comes from people uniting behind a shared, long-term vision, built on long-term investment horizons, for their town or city centre. A vision they can believe in. 

But to get to this point, trust needs to be established between everyone involved in the regeneration process. Through ongoing consultation, developers can build trust and dialogue with local communities, helping them to feel enfranchised, empowered and involved. Similarly, to build trust with local authorities, the private sector needs to demonstrate that it’s not just out to make a profit, but to help create a sustainable local economy. 

As Will Robinson reflected, ​“trust is everything; trust between developers and local councils; trust between the local community, businesses, people, residents. [They] need to trust and work with, rather than against, one another, because these projects are labours of love”.