Helen Marks, Planning and Development Consultant, and Paul Fairlamb, Associate Commercial Surveyor, from youngsRPS discuss the ongoing conversations surrounding the future of the high street as a result of a changes to shopping behaviour and the associated impact on retailers; the impacts of Covid-19 only make this issue more significant with the need to ensure that our town and city centres remain economically functional.
Rent quarter day, the second of the year, occurred on Wednesday 24th June and it is estimated that 18% of retailers made payments, on time, to landlords. This was a further decrease on the level of rent collected from retailers on the March quarter date where only 25% of rent was paid on time. On a more positive note, it is estimated that eventually 67% was collected. Undoubtedly, the vast majority of retailers have experienced significant operational difficulties since the lockdown began in March, with most relying on internet sales (if they were prepared for this), until shops reopened on the 15th June. The disruption to operations is, however, set to continue whilst social distancing remains in place.
Whilst food retailers and other essential shops – such as pharmacies, post offices and hardware stores – remained open, they are not commonly found on high streets or in town centres and are often located within larger stores. high streets and town centres are more generally occupied by ‘comparison’ stores, including department stores, clothing and leisure retailers and electrical shops. Certain such operators, including Debenhams and Laura Ashley, have been the subject of recent media coverage with regards their financial difficulties, and shopping centre owner Intu has recently collapsed into administration. The future of such operators in their traditional form has become more uncertain.
There has obviously been a noticeable rise in the number of restaurants, bars and other food and drink venues represented on the high street over the last decade, with customers choosing to visit centres for an ‘experience’. Many towns and cities have also sought to support this with the introduction of food markets and other cultural and entertainment attractions and have successfully done so; the Christmas Market in Newcastle being one such example. One certain way of ensuring footfall and expenditure in any centre is, however, through a local resident population.
It is expected that European centres will combine living alongside working and shopping, but this has been less popular within the UK over the last century. In recent years, however, there has been an increase in the number of town and city centre living opportunities. This began with the Governments extension of the ‘permitted development rights’ to enable the conversion of office accommodation to residential use, subject to the Prior Approval process. Whilst this relaxation has been the subject of some criticism, in terms of the loss of office accommodation and quality of the accommodation created, it has demonstrated a demand for urban living.
There has also been a rapid rise in interest in the Build to Rent (BtR) market over the last five years, with the sector now recognised as a distinct tenure class within national planning policy. Whilst BtR accommodation can take many forms, most of the accommodation delivered to date has been in the form of apartment living. Although the North East region does not account for a large proportion of the BtR sector, particularly when compared with the South East, we are starting to see more activity from developers in Newcastle Upon Tyne and Gateshead. The most recent scheme to be approved is Strawberry Place, adjacent to St James’ Park. The mixed-use development is an important investment and will introduce 315 additional privately rented apartments. This will continue to diversify the city’s housing stock and make a valuable contribution towards housing supply.
Some local authorities have taken a proactive stance in encouraging new residential development into their centres. Manchester is a prime example and has seen a significant demand for BtR accommodation, which is second only to London in the number of completed schemes. To secure the delivery of such schemes does, however, require an innovative approach by all parties in response to what are often tightly constrained sites and the relationship to other land uses, including food and drink venues. Certainly, traditional standards applied to residential development are unlikely to be achieved, although the National Space Standards are now being more consistently applied by local planning authorities when considering apartment schemes.
‘Planning for the Future’ released by the Government in March 2020 proposed further initiatives which should encourage more residential development into our towns. Measures included new permitted development rights to allow building upwards (up to two additional stories) on existing residential properties and to allow vacant buildings to be demolished and replaced with ‘well-designed’ new residential developments and which will be implemented in August of this year.
Retail may shrink further, particularly the secondary space, and there may also be some contraction in office demand (although there are also signs that employers and a proportion of employees are wanting to get back to the office). This contraction in demand for some commercial space may provide opportunities to look again at uses within cities, and hopefully, if this is supported by the planning authority it could finally lead to a more vibrant and sustainable city centre. It will, however, take all stakeholders to pull together in order to deliver change.
The encouragement of more residential development into our cities and towns may, therefore, be one way of supporting their economic future and one which clearly has support at national level. Whilst this issue and how to overcome it was a subject of debate before Covid-19, it is arguably more critical now.
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