Shopping centre

Repositioning shopping centres for alternative uses

Much has been written about the challenges facing malls and department stores in the US. Retailers that have been the backbone of many shopping centres, such as Macy’s and Sears, are closing stores in the face of declining sales, leaving large gaps in many malls. The question is whether the UK is facing the same retail ‘Armageddon’ as the US?

The short answer is no. The UK has only a fifth of the shopping centre floorspace per head compared with the US, meaning it is less exposed to structural shifts in retail. UK shopping centres are also in predominately town centre or edge-of-town locations, meaning they have greater flexibility to reposition excess space, unlike the large US suburban malls that have been hardest hit.    

That’s not to say that the UK doesn’t face challenges and ‘rightsizing’ shopping centres – ensuring they have the right amount of space to meet retailer and consumer demand – is crucial. Centres won’t become redundant, even secondary and tertiary shopping centres play an important role in convenience retailing, but many were built before the arrival of e-commerce and some are simply too large.

So what to do with this excess space? In the US, there are examples of shopping centres being adapted for a variety of uses, such as residential, dance studios, churches and even engineering plants. In the UK the focus should be on creating a more mixed environment that can add vibrancy and generate additional footfall to the existing retail element.

Introducing food and beverage options is already a well established alternative, but there are a number of other potential options for excess space:

  • Residential: This is better suited to those locations where the demand and values ensure conversion is feasible, but it’s not just the value aspect that makes residential attractive – it also means an increase in the resident population within the immediate vicinity to support retail sales and in turn retailer demand. 

  • Public space: While not generating ‘direct’ additional value, the demolition of excess retail could provide an opportunity to create attractive public spaces, ultimately enhancing the attractiveness of the location as a place to shop and benefitting the remaining retail element while reducing rating liability on long term void space.

  • Offices: John Lewis is reportedly on the cusp of repurposing unused retail space as co-working offices in some of its larger stores. As shopping centres are typically well connected, as well as offering retail and leisure amenities on-site, they could prove attractive workplace locations.

  • Healthcare: Taking advantage of many centres’ strong transport links, there is the potential to open standalone health centres or retail/healthcare hybrids. For example, Mothercare has partnered with Babybond® on private scan clinics in some stores.

  • Logistics: With high demand for ‘last mile’ logistics space to fulfil online deliveries, using redundant space as distribution hubs or ‘dark kitchens’ for takeaway orders, could be a valuable alternative.

  • Leisure: Some centres have been repurposed as pure leisure destinations such as the Corn Exchange in Manchester, which has been transformed into a dining destination.

 

Further information

Read more: Shopping Centres and The retail apocalpyse has officially descended on America

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