THE impact of COVID-19 is still being felt on the high street four years on from the first lockdowns, with ongoing implications for retail real estate, as we saw several years’ progress accelerated into just one. However, with challenges come opportunities – which are revealed in the latest industry report from leading property intelligence platform Nimbus®.
Post-Covid, businesses have had to adapt and change the profile of retail footprints, with many taking smaller units in town centres, and larger ones in out-of-town retail parks. For those that haven’t changed their offering, there have been a raft of closures and administrations – with Wilko and The Body Shop being two of the biggest names of late.
The “Retail – State of the Market Update” report – which is the result of collaborative efforts with a range of property and retail experts – casts a spotlight on the changes happening across a rapidly-evolving landscape. This includes how the introduction of Class E has allowed uses to move back into the high street that had otherwise been driven out by national retailers paying higher rents on strong covenants.
Paul Davis, co-founder at Nimbus®, said: “There are a number of areas in the market – like food retail – that continue to boom. In the case of drive thrus and roadside retail, we have seen strong competition for sites, that has also driven land values up to record levels.
“Naturally, the evolving market means that not every impact or route forward for the retail estate market is completely clear cut, but there certainly are opportunities.
“Class E’s introduction is returning uses historically removed from the high street – like doctors, dentists, and nurseries – and creating the opportunity for town centres to become more community-focused once again. Meanwhile, there is also opportunity in the right places for the right buildings to see elements – usually uppers – repurposed into residential where it is viable.”
Nimbus’ report details an increase in councils looking to create mixed-use developments in their own high streets, where in some cases local councils have acquired their local centres and are progressing schemes through joint ventures with the private sector, which creates the question of what order various elements should come forward and how this impacts overall values.
Paul said: “It’s a case of what comes first, the chicken or the egg? Residential needs the buzz of retail and leisure operators to sell well, but those operators need the residential occupiers to drive viable trade – so there remains a balance to be found and in some cases this issue is being resolved by councils taking a long term view on their local high streets.
“There has also been a renaissance in local shopping, which along with the “right sizing” of retail areas, re-basing of rents and consumer demand to ‘shop local’ is positioning independent retailers as the main tenant demand. In turn, this is seeing a change in how landlords are approaching buildings and units to rent, putting in more spec and providing an element of fit-out to entice independents in, which typically want to be in and trading as quickly as possible.”
The “Retail – State of the Market Update” report saw input from property and retail experts from Avison Young, FHP, GCW, Lambert Smith Hampton, Siddall Jones and DWF, and is available to read here: https://www.nimbusmaps.co.uk/report-retail-market
For more information about Nimbus and its latest updates, visit: https://www.nimbusmaps.co.uk/
