What’s next for UK shopping centres? Is it all doom and gloom or is there opportunity in the changing retail landscape?
These are the questions often asked by our clients, says Michaela Dakin, Partner at Cushman & Wakefield.
For the past few years there has been an endless stream of negative headlines surrounding the UK retail sector and in particular shopping centres.
Before you read further, at Cushman & Wakefield, we do not believe the end is imminent for physical retailing. In fact our view is that shopping centres – both prime and local – are going through a revival period, with new formats entering the market to continue to entice, entertain and educate their customers.
Internet sales growth slowing
Currently online transactions accounts for 16% of total retail sales but we are seeing the rate of growth slowing.
This is not a figure to ignore; it still impacts physical retail units that now must work harder to attract customers in store to satisfy the human desire to experience, touch and interact with products in a physical space.
“We are seeing new concept physical spaces emerge, new international retailers entering the UK market and shopping centres creating community spaces”
So far this year, Cushman & Wakefield’s shopping centre leasing team has completed more than 353 leasing transactions in some of the UK’s most prolific schemes, including Westfield Stratford; The Bullring, Birmingham; Intu Trafford Centre; Glasgow Fort; Tunsgate Quarter, Guildford; and the soon to launch Westgate Oxford.
We’ve analysed these deals and outlined five key factors shaping the shopping centre sector that are happening now:
1. Redefinition of anchors
2. Strong demand from international and multi-fascia retailers
3. Physical stores will continue to play a significant part in the customer journey, albeit the role of the store is likely to change and store sales will be further driven by multichannel
4. New is better than old – customers and occupiers are favouring refurbished schemes to showcase brands
5. Shopping centres must engage, entertain and educate and form a hub for the community
These are just a few of the trends we’ve outlined in our latest shopping centre leasing insight report to be launched at MAPIC. You can sign up to receive the report as soon as it is live here.
Evolution not dissolution
What does this all mean for the retailer, consumer, investor, developer, and ultimately our clients?
Physical retail is not dead; instead it’s in a revolutionary period and we think an exciting one at that.
We are seeing new concept physical spaces emerge, new international retailers entering the UK market and shopping centres creating community spaces where customers can engage with brands to continue to offer shopping experiences that ignite all the senses.
Michaela Dakin, is a Partner at Cushman & Wakefield in the Shopping Centre Leasing Team. You can contact her here or meet Meet C&W at MAPIC, Stand R7.M7. For more information on our presence at MAPIC click here