Community and commercialism: How reimagining our shopping centres will act as a catalyst for impact in our towns and cities

For decades, shopping centres were the lifeblood of many town centres, having represented the ‘jewel in the crown’ for numerous local authority regeneration strategies. These large, indoor retail spaces have served as a gathering place for local people, a source of revenue for businesses, and a destination for shoppers.

However, in recent years, shopping centres have faced challenges as consumer habits have shifted and online shopping has become prevalent across several retail categories. According to Local Data Company, At least 30 shopping centres in the UK are now at least half empty, including five with more than 80 per cent of their shops vacant following months of lockdowns brought about by the Covid-19 pandemic in 2020 and 2021.

These spaces, along with other major chunks of real estate in the immediate vicinity, mean town centres can appear tired and underutilised, providing a clear opportunity for redevelopment to benefit communities and the economy, and evoke a placemaking step change in our town centres.

With long-term trends compounded by the Covid-19 pandemic and the cost of living crisis accelerating decline and impacting asset values, owners, managers and operators are looking at a number of options – from disposal and demolition, to adaptation and re-thinking the design to diversify usage and drive value of these spaces.

As real estate advisors working across all stages of the shopping centre life cycle and wider town centre regeneration, Avison Young recently brought together local authorities, asset managers, investors and policy makers to share challenges, solutions, and opportunities for repurposing these spaces.

Hosted at Avison Young’s Manchester office, the discussion was led by Kim Grieveson, Principal, along with Stephen Cowperthwaite, Liverpool Managing Director, Nicola Rigby, Principal and Rhian Smith, Director. Attendees included Paul Sargent, CEO, Queensberry Real Estate, Simon Mann, CEO, Augur Group, Christian Rogers, Assistant Director of Place at Sefton Council, David Marsh, Senior Regeneration Officer at Wirral Council, Paul Wright, Co-Founder of Whatif Group and Chris Roberts, Chief Development Officer at Bruntwood.

The conversation centred around the challenges and opportunities brought about by the redevelopment and regeneration of these spaces, the importance of good placemaking practice, and how developers and investors can ensure the change brought about by these projects doesn’t result in a diminished sense of place.

Breaking down the barriers

Redeveloping shopping centres and other large real estate spaces in town centres presents a unique opportunity for communities to create a sense of place that is both commercially viable and socially vibrant. However, these projects can also come with significant risks, including potential displacement of existing businesses and perceived loss of community character. Therefore, it was agreed that it is crucial that developers and investors work with communities and local authorities to ensure that these projects contribute positively to placemaking.

Participants acknowledged that there is a real challenge when it comes to funding for these projects, with tight local authority budgets and competing priorities resulting in redevelopment schemes being put on the backburner, and a requirement for the public sector to step in to help fund them.

The true ‘value’ in social value

What is clear is that the benefits that the reimagination of these spaces can bring – both socially and economically. Careful, considered approaches have the potential to transform communities for the long term. For example, the recent £20m funding secured for the regeneration of The Strand in Bootle is not only focusing on the ‘red line’ of the shopping centre site. Instead, the project has a real emphasis on the wider impact that the development will have on the area – from employment opportunities to local health outcomes.

Christian Rogers commented: “For a lot of town centres, particularly from a local authority perspective, a lot has been invested in these spaces, because of their significance in the community. The Strand is a place where historically people have gathered and has provided an important local amenity.

“In the future, it is likely to be about a third of the retail footprint it has now, but it still has to retain that offer – 80 per cent of shoppers are from within 10 minutes of the town centre. It’s essential that it has a broader offer – whether that’s through health and wellbeing or food and beverage amenities. It’s what people want but it also makes commercial sense.”

A ‘one size fits all’ approach cannot work for these projects. By looking at the bigger picture, understanding the needs of specific communities based on demographics, and how they can be met, these developments can create flexibility to have a lasting change, and the risk of creating an asset that will diminish in value is significantly reduced.

Chris Roberts said: “It’s really important for our towns, in which these shopping centres are located, to be able to broaden their demographic. To do this, it’s necessary to broaden and diversify the offer of these spaces. There will be some that, because of a lack of connectivity to regional cities, will struggle to survive.

“They will only have a chance if there’s a core strategic plan to deepen and broaden the population, and it becomes a genuinely alternative place to live and be than the city centre.”

Nicola Rigby added: “A lot of shopping centres in our towns are monotype, monolithic, closed environments. Diversifying delivery and introducing more people in these secondary locations is a challenge, but it is really important.”

The power of partnership

One way to achieve this is through a collaborative, joined-up approach between the public and private sectors. By working together, these groups can ensure that the redevelopment of these spaces is aligned with the needs and aspirations of local communities. Examples of this might include consultation with local businesses and residents, incorporating public art projects, interesting multi-use gathering spaces, and supporting local entrepreneurs.

The Greater Manchester Pension Fund – for which Avison Young is the property manage – for example, has recently announced that it will be working with the PJ Livesey Group for the proposed transformation of Chorlton Cross Shopping Centre. The development – which has been in the pipeline for more than a decade – has set out to be a ‘centrepiece of the community’, based on the needs of the people who live and work there.

There was unanimous agreement amongst the group, though, that more needs to be done to connect the public and private sectors, with mutual support required. There is a clear need for these partnerships to happen at an early stage, with the public sector supporting the private sector to take projects forward, and the private sector bringing their expertise and ideas to the table make them happen.

Chris Roberts said: “The earlier the public sector can engage with private sector partners, the better. They can help create a real discussion and debate about the direction and vision for the project which results in increased value and better results.”

Not only is more collaboration needed amongst the private and public sectors, but there is also an opportunity for a more joined up approach within the public sector eco-system – with the NHS, education providers and local authorities coming together with a part to play in town centre visions, to truly understand the needs of each community, to help ensure that the investment made will have a lasting impact.

Paul Wright commented: “A real challenge for public sector organisations is selecting the right private sector partner who genuinely cares about the project, and isn’t solely focused on the bottom line. For the private sector, it is possible to do both – make money while doing good – it’s about building this approach in from the start of the partnership.”

It all starts with a conversation

The essence of the conversation in the room acknowledged that these are complex projects with multiple stakeholders and barriers to overcome, yet there are huge benefits for communities to be unlocked. Therefore, it is crucial that developers and investors work with communities and local authorities to ensure these projects contribute positively to placemaking, and in return achieve great values into the future whilst not diminishing a sense of place or causing disconnection. This requires a collaborative, joined-up approach between the public and private sectors, as well as a focus on sustainability, local business needs, and ultimately, a really clear dialogue with the people who will inhabit these places.

By embracing these strategies, investors, developers and local authorities can breathe new life back into our town centres, provide communities with a sense of identity and create spaces that are economically successful, culturally significant and fit for the future.

If you would like to speak to someone at the WhatIf Group to learn more, please contact Paul Wright  paulwright@whaifgroup.io or Kevin Parkes kevinparkes@reverent-kirch.91-238-163-161.plesk.page