The accelerated evolution of retail is extraordinary. In 2020 we saw a shift in consumer behaviour like never before. These trends were already advancing, but too often ignored.
When we embarked on the Repurposing campaign with Re:Imagining Retail#1 it was a call to arms for all stakeholders in the property industry to consider the urgent need to adapt its retail spaces and places. The positive market reaction to this publication was astonishing. We now seek to take the debate a step further, with Re:Imagining Retail#2 – Sustainable Repurposing.
Retail repurposing reimagines how we use our towns and shopping centres to live, work, play and thrive. Sustainable repurposing, is about making sure that these places are future proof, green, offer solid investment opportunities and provide what communities need.
There are huge headwinds ahead. If we fail to act now, a third of retail could be redundant by the end of the decade.
We’re at a crossroads, where significant challenges meet opportunity. Retail needs to be rightsized, not replaced. Evolved, not eliminated.
Non-retail uses will play a vital role in the transformation of shopping spaces to a more dynamic, rich and purposeful mix of uses. There is a once in a generation opportunity to right previous wrongs, creating places that serve greater financial, economic and social value.
More parties are now coming to the table, recognising that it is not just a question of if, but when. Challenges around viability remain, but increasingly are being navigated through new funding mechanisms, creative uses and partnerships. We’re seeing investors, stakeholders and consumers focus even more on ESG, sustainability and social returns.
Re:Imagining Retail#2 is a cross-sector collaboration of insights from Savills and our peers from across the landlord, developer, planning and design space. We are indebted for their fascinating contributions and engagement on a subject that we are passionate about. In this publication, we examine thought leadership and case studies through the lens of sustainable uses, sustainable repurposing, sustainable masterplanning, and sustainable funding and policy.
Join us on this incredible journey.
KEY EMERGING THEMES:
SUSTAINABLE USES
Mixed uses benefit all uses. It’s
about creating the right blend of interconnected hybrid spaces that are appropriate for that place. This means more than just replacing one use with another.
In terms of employment space, we’re seeing a large number of co-working office developers, maker spaces and interest from life sciences operators who want to bring labs into town centres.
Living spaces aren’t just about creating apartments for younger people. If we’re serious about creating sustainable communities we need all kinds of people living together, which requires a rethink in how we build them and how we meet the disparate housing needs of different lifestages.
Retail still has its place, but perhaps not solely as retail places. We need to think of these as consumer hubs that are more than just shopping, but instead meet other social and civic needs, such as health, education and wellbeing.
SUSTAINABLE REPURPOSING
Sustainability has to be at the heart of repurposing if we are serious about creating places that genuinely meet our future needs.
ESG is central to this, reducing energy consumption through better building practices, retrofitting where possible, but rebuilding where the opportunity to improve the environmental exceeds its cost. Creating social value enables us to contribute to stronger and more resilient local communities.
The best retail investments in the future will be those that are connected to their places, are environmentally and economically sustainable, and that have secure income from diverse occupants.
SUSTAINABLE MASTERPLANNING
The need to rethink our use of urban spaces doesn’t lie with retail alone - it’s a question of rightsizing everything and all stakeholders collaborating with a common purpose. Public and private sector engagement is coming together like never before.
We have to stop seeing our town’s retail assets as islands and instead work out the relationships they have with other uses. This means different stakeholders engaging in the masterplanning process, to make sure towns have a range of uses that complement each other, rather than compete.
The best town centre redevelopments tend to have strong partnerships between developers and local authorities.
Some local authorities are now bringing in the concept of the 15-minute neighbourhood. The idea that good sustainable settlements provide residents most things they need to get about their daily lives, through living, working and recreation within a short walk. This is the ultimate sustainability goal as it reduces travel and creates community and vibrancy.
SUSTAINABLE FUNDING & POLICY
Planning policy has never been more supportive. The recent changes to use classes make it far easier to change between different kinds of uses and flexibility and adaptability of use will be key for sustainability.
There are an increasing array of government funds to help get developments off the ground. The Town Fund is set to help improvement projects that would not have previously been possible, but more support is needed to help bridge the gap and increase viability.
Joint ventures between landlords and specialist property developers with their own funding mechanisms are being brought into schemes to support areas outside of the expertise of the primary owner. Not least with the needs of local authorities who have invested in local retail assets to regenerate their own town and city centres.
