Retail spaces in the UK are undergoing a significant transformation as landlords seek more profitable tenants due to the ongoing struggles of department stores and other retailers. This trend is gaining momentum and a recent report has highlighted numerous cases of retail space conversions, underscoring the extent of the issue.
One example of this transformation is a deal struck between shopping center owner Capital & Regional and Reef Technology. The partnership aims to convert under-utilized shopping centers and car parks into urban farms, neighborhood kitchens, fulfillment centers, and e-scooter rental stations. This marks Reef Technology’s first deal in the UK and is in response to Capital & Regional’s search for alternative uses for parts of its malls.
Even larger companies are exploring innovative uses for retail spaces. There are rumors that DMGT, the publisher of the Daily Mail, may be interested in acquiring the former House of Fraser store in Westfield London mall to establish its new headquarters. Plans to convert the store into a co-working space have already been approved by the local council. This move could position DMGT as one of the first major employers to occupy a disused shopping space.
The existence of empty retail space is not a new problem, with some locations remaining vacant years after the collapse of retailers like BHS. However, the struggle to attract tenants in prime locations like Westfield highlights the challenges faced by landlords in the current retail climate. While a retail boom is expected as the economy recovers, it may not benefit smaller malls or town centers. In this context, the decision of Capital & Regional to explore alternative uses for their spaces is a logical step.
The closure of thousands of shops last year, with more expected to follow post-lockdown, further emphasizes the urgency for landlords to find new tenants. Even renowned retailers like John Lewis Partnership are rumored to announce further store closures. This adds to the growing difficulty of filling these large retail spaces.
In conclusion, the trend of converting retail spaces into alternative uses is accelerating as landlords search for more profitable alternatives. This shift is not limited to smaller malls but also affects prime locations. The coming year will be crucial for the retail industry as it adapts to the recovery from the pandemic and determines the future utilization of retail spaces.
Useful links:
1. Reuters: Retail conversion boom asks tough questions about repurpose risk
2. Rethink Sustainability Hub: Retail rebirth – converting empty stores into new uses
