Transforming retail spaces into consumer hubs

Is the role of the retail agent changing to “Curator of Mixed Use Places”?

Much of the property market has been siloed for too long, none more than those that act within the consumer sphere. Department stores, out-of-town hypermarkets, regional shopping malls, leisure parks and outlet centres are all in many ways two-dimensional in their offer. Institutional landlords tended to have specific business space, residential, or retail funds, and property advisors aligned themselves accordingly. But ‘real’ places don’t work this way. Increasingly landlords are having to adapt to consider a range of uses within one mixed use consumer centric asset.

Sustainable repurposing is all about the right form of adaptation.

Retail places need a rebrand, for this too implies sole use. Retail places are retail of course, but they must now also be leisure, community, amenity, civic, public realm, health and wellbeing environments. They need to sit with residential and workspace, expanding their use to different day parts, as well as fitting to the needs of a diverse consumer base.

Some places will see a complete departure from retail, but most, we believe, can and will survive if they evolve into blended ‘consumer hubs’. Places should seek to offer the consumer something different. Consumer expectations and needs have evolved quicker than the assets that they shop in or interact with. You only have to look at the buzz around market places, public realm, food halls and co-working space to see what can be possible.

Yet, while many high streets and shopping centres do need to be reimagined, there remain retail and leisure uses that are becoming increasingly important to other property sectors. For example, it has an important role in creating the character and social value around a new office scheme, beyond that of simply additional rent at ground floor. Likewise, within hospitals or university campus’, the rental income from retail is almost secondary to the role the space plays. The key word in these situations tends to be amenity.

Retail agency is having to adapt too – for the better. We all have a stake in the role the places we operate in have in the future. We want to enjoy our towns and cities and have the opportunity right now to evolve our offer to suit the unique needs of different places. The should be dynamic and refreshing, rather than the same tried and tested formula.

We’ve witnessed first-hand the retail environment evolve. The fortunes of town centres declining as a result of large chain retailers ‘right sizing’ their property estate and therefore less need for space. At the same time we have seen consumers yearning for an offer with variety, more local, more community, more social, more online, more experiential and more authenticity.

This experience has lent itself to us becoming “Curators of Mixed Use Consumer Hubs”.

Interestingly, while repurposing existing retail space might bring in other forms of retail and leisure or uses such as offices, medical, urban logistics, light industrial etc, to make it work sustainably for the future requires an appreciation of consumer focused spaces.

These uses will also have to adapt to fit in these spaces and arguably have a different audience from the traditional big shed, suburban residential, or corporate office investors.

Todays ‘retail agent’ needs to span all of these sectors now and in the future. At Savills we’ve been on this journey for a decade. We speak the language at the coal face, but also hold a holistic view and can identify opportunities to bring in other cross-divisional expertise.

The whole retail property sector has to accept responsibility for some for the problems now facing it, but we are also part of the solution. Being at the forefront of helping transform it into something richer, more vibrant and sustainable is what motivates us in our roles.

All we need is a catchier job title!

This evolution is happening, as a national retail team we have been involved with:

Bringing office occupiers into traditional retail schemes – leading to hundreds of new consumers
The process of repurposing surplus shopping centre storage space into self-storage
Bringing NHS uses into shopping centres – we think of them as a new form of anchor tenant bringing additional visitors to that location.
Department stores – breaking them into smaller retail spaces, partial change to offices, hotels on upper floors, residential, research facilities, car showrooms! Though retaining part for retail. This provides a stronger more appropriate and ultimately viable blend of retail.
Advising developers of large scale, prominent flagship mixed use schemes with an aim of solely targeting independent operators for the ground floor spaces – a real curation of space.
We act for hospitals to bring their retail offer up to date, to meet the expectations of their staff, patients and visitors – we think of them as small towns!
Acting for Universities to bring the evolving strength of street food operators to their campus
Savills tracks 400,000 independent retailers and small retail chains nationally that provide us with unrivalled insight to help the curation of a local and relevant retail offer.

“Sustainable repurposing is all about rightsizing the right offer in the right place”