In December 2018, MRI Software compiled and published results from its industry-wide survey in a report titled Charting UK Property Trends. In this latest blog, we focus on the key findings related to the future of the British high street.
There’s little doubt that the retail sector is going through some turbulent times. In the UK, store closures in town and city centres came thick and fast in 2018 – while those that are surviving aren’t always thriving. With so much doom and gloom you can understand why some quarters are sounding the death knell for the high street, but is that really what’s going on?
No, is the simple answer. According to our recent research, published in the Charting UK Property Trends report, the industry sees the current climate as something more akin to an evolution for the high street and not its decline. That viewpoint may go against what we’re seeing in the media, but it’s based on a vision of where the high street is going and not how it looks today.
In a previous post, we discussed the ever-growing demand for residential property in the UK – and nearly three quarters of those we surveyed believe the redevelopment of former retail stores into rental accommodation will give a new lease of life to the British high street. With 91% also identifying that ‘Generation Rent’ prefer to live in town and city centres with easy access to amenities, it certainly stands to reason that unoccupied or underperforming retail property could be converted into living space.
More people living on or close to town and city high streets would increase footfall and provide a boost for the retail, leisure and hospitality businesses that remain. These occupiers are going to have to adapt and evolve in the way they operate, and no longer will they be the ‘anchor’ tenants – as been the tradition. But, if they can become part of a wider network that serves the rental community, there are certainly opportunities for a successful and sustainable model that includes a physical outlet.
And the opportunities don’t end there. As younger generations move into employment, we’re seeing an increasing desire for a flexible lifestyle that allows them to live, work and play in the same place. Per our report, 81% (so, even more than are predicting residential redevelopment) believe co-working and shared offices spaces will replace retail premises and could prove to be a lucrative opportunity for current retail landlords.
The challenges being faced by the retail sector – and other occupiers of high street real estate – will not all be overcome by simply shifting to residential or office developments. However, this diversification, and the knock-on effects of bringing more people into town and city centres, will certainly help business that are willing to adapt. Times are most certainly changing, but there’s hope for the British high street yet.
To find out more you can download the complete report here.
You can also listen to MRI’s Marketing Director for EMEA, James Lavery, discuss the report on an episode of the Building Success real estate podcast below: