// 3/4 of retail landlords a considering repurposing their retail assets, research has shown
// 90% will first look to reposition their schemes with a revitalised retail offer before mulling alternatives
// 18% of retail landlords have already completed a repurposing project
Up to three quarters of landlords are undertaking or thinking about a redevelopment of their retail assets, new research has shown.
According to real estate advisory firm Savills, 90 per cent of landlords will first look to reposition their retail schemes with a revitalised offering before considering alternative uses.
Savills’ new Re:Imagining Retail report, which entailed a survey of over 30 property firms which in turn control over 1000 schemes, indicates that 18 per cent of retail landlords have already completed a repurposing project.
A further 75 per cent are considering undertaking such a project in the foreseeable future.
The research comes as landlords are increasingly considering the opportunities to reposition or repurpose their retail assets as the industry faces a series dwindling footfall and consumer confidence, weak in-store sales, a slew of CVAs and store closures, and economic uncertainty due to Brexit.
Savills’ data shows that the first priority for retail landlords is to look at enhancing and repositioning the retail and leisure offer to create a modernised, differentiated and exciting tenant and use mix (see graph below).
However, if that option has been exhausted, or if the amount of retail space needs to be reduced, residential is the second most likely option closely followed by health and community.
Last mile logistics are being considered as an alternative use by 30 per cent of landlords, predominantly by owners of retail parks and shopping centres, to tie into the growth in ecommerce and Click & Collect.
Savills’ research goes on to show that there is a difference in what landlords believe is needed in terms of repurposing and what is most likely to happen in the short term.
According to the retail landlords surveyed, repositioning is most urgently required in shopping centres but is most likely, in the immediate future, to take place within department stores.
Conversely, retail parks are not generally considered to urgently need repurposing and yet are anticipated to see a considerable amount of development.
High streets, however, are perceived to require a significant reduction in retail space but expectations are that this is much less likely to happen due to fragmented ownership and lack of funding options.
“Structural changes within the retail industry means it’s time for landlords to future-proof their schemes against uncertainty,” Savills head of retail investment and repurposing Mark Garmon-Jones said.
He added: “Repurposing doesn’t have to solely be about reducing the retail footprint, instead it is about the re-creation of schemes to provide a modern and revitalised offering that will stand the test of time.”
Savills retail reseach director Tom Whittington said: “There has been a lot of talk of late about there being too much retail space in the UK, but opportunities are certainly still there if the right tenant mix, with innovative and differentiated retail occupiers, is considered.
“The best examples of repurposing are often those that bring in a suite of alternative uses, which complement one another, and of this retail can still continue to play a huge role.”