One for all, all for one. The fight to save our high streets has just moved up a gear, and just like Alexandre Dumas’ titular heroes in The Three Musketeers, a united front will be a prerequisite if we want to win. We may be a long way away from the year 1844, when the greatest story of camaraderie was first published, but teamwork is as important as ever – particularly for the property industry at a time of much needed change for our high streets.
The Fragmented Ownership Group, a consortium of property industry experts and investors, has publicly announced this week with the support of its Town Centre Investment Zones report that a new collaborative approach is required to safeguard the future of our high streets. The report demonstrates that pooling together property owners and their assets into one investment vehicle is the best solution to overcome challenges. The initiative uses this single asset management approach, called Town Centre Investment Management (TCIM), for any given high street to ensure one all-encompassing vision for future growth.
While the 2011 Portas Review has helped the nation to tackle issues dubbed as ‘crime and grime’, TCIM addresses chronic vacancies, low quality tenant line-ups, tired environments and poor customer experience – the plight of far too many high streets across the UK.
The report, carried out by Peter Brett Associates with Bond Dickinson and Citi Centric, explains that fragmented ownership encourages a focus on short-term gains, rather than long-term higher returns from more strategic investments. This single asset management approach, however, will allow all shops to be managed and curated by one governing body, rejuvenating the high street for the benefit of all. This will involve much more than simply expanding the range of shops available, but turning the high street into a well-respected social centre for the community. The high street will no longer be reserved to retail, but also more leisure and community support to create an enhanced experience that consumers simply cannot get online.
TCIM has been piloted at three different locations with three unique typologies and geographies – Dartford, between central London and a regional shopping centre; Melton Mowbray, a market town with a rural hinterland; and Weston-super-Mare, a coastal community. The results were conclusive: “Yields and rental income improve by taking assets into a single entity that can be asset managed.” Although TCIM was found to deliver improved commercial returns, the set up costs of TCIM could be a burden and ranged from £25m to £35m in these pilots. The report recommends that the investment sector steps up to support and the Government would need to encourage it.
Of course, not all high streets are under performing – Marcus Jones MP recently wrote on the British Council of Shopping Centres’ Big Trend 2016 blog that investment was up 30 per cent and retail sales rose for the 31st consecutive month. We also recently wrote a blog post here on how some of the biggest e-commerce brands are in fact now bucking the national trend by opening physical stores. Yet, serious challenges do remain and Jones has asked BCSC and the wider property industry to support the Future High Streets Forum, which works to share best practice and develop new solutions to the challenges faced by high streets across the country. And, this new proposal by the Fragmented Ownership Group could indeed be a solution to more deep-rooted structural problems.
What is clear is the inherent need for leadership at a local level. Too many high streets cannot currently compete with rapid change in the market and those that are lucky enough to see growth may not be able to sustain it in the short or long term. One vision for one street could certainly become the most effective solution, enhancing a high street’s ability to meet the needs of what has become one of the world’s most sophisticated consumer populations. One thing for sure is, the team here at Redwood will be waiting eagerly to see if there is any TCIM pick up and we’ll look forward to high streets being restored to their former glory.