Living with the new normal
The clock is ticking for UK secondary shopping centres
Secondary shopping centres are visibly starting to struggle. Their market position is now increasingly undermined by the growth of online sales and the preference of consumers for more convenient retail parks and “go-to” destinations with leisure offerings.
Based on the recent trend in the wider retail sector, Deloitte predicts that between 2018 and 2020 UK retail will see 27,000 net store closures.
As a result of the closures, we predict that secondary shopping centre vacancy rates will rise to more than 25% by 2020.
The range of alternative tenants and the menu of traditional asset management initiatives is diminishing, forcing owners to fill the vacated space with low‑rental booths and even lower‑rental market stalls, charity shops and council offices.
To do list:
|Make realistic appraisals of a centre’s future prospects, evaluating all potential uses and opportunities for each site taking into account actual and alternative uses.|
|Accept that there is a ‘New Normal’ for the sector, which requires more aggressive and proactive management than ever before.|
|Work to understand and build strong relationships with the key stakeholders in each and every location – Local Authorities, retailers, consumers and residents.|