Unlocking town centre retail developments – GVA
The recent Portas Review made a number of recommendations to help to revive UK town centres, most of which have been adopted by ministers. But GVA argues in a new report that these palliative measures “do not address the reasons why so many town centres are failing to achieve the meaningful new development and investment needed to secure their future”.
In the report, GVA says that with the development pipeline effectively coming to a halt in the current difficult economic conditions, so has the catalyst for investment in town centres. The firm’s survey of local authorities has found that a third have no significant (5,000 sq m or more) development planned. And of those that do have plans, only a quarter are progressing as originally planned – the weaker capital value and rental values in many town centres have threatened the viability of developments; it is very difficult to obtain development finance; and occupier demand has noticeably changed, it notes.
Why is the lack of development a problem? GVA points out that major multiple retailers generally want fewer, larger shops in a more limited number of towns – typically around 100 locations. Many town centres do not have retail space available that meets these retailers’ requirements. “Without new developments, or qualitative improvements to the existing stock, many locations will struggle to compete in the future,” the firm warns.
While some of the Portas initiatives may go some way to alleviating pressures on town centres, for example by encouraging diversification, markets and niche/independent retailers, GVA says that without new investment many centres face the prospect of a spiral of decline.
GVA stresses that there is no single solution. The key, it says, is to understand which circumstances fit in each case: some town centres will no longer support ambitious plans, while others may support scaled-back or phased new development; in some cases, innovative financing such as TIF may be required. In some towns, which are simply ‘over-shopped’, and where major multiples are unlikely to be interested, GVA argues that LPAs may need to put together plans to consolidate the retail core of the town centre and enable more A2 and A3 uses and/or change of use to leisure, residential and community uses. In cases where there is local growth in population and spending, it may be possible to support new development to increase the quantity and quality of retail stock.
The report concludes: “New development is not a panacea for all the challenges facing our town centres. Nor are the range of other measures advocated in the Portas Review. There is no ‘one size fits all’ solution, and in reality the retail function of many traditional centres faces inevitable decline, whatever initiatives are applied.”
“However, there is much more that can and should be done where real opportunities still exist, given the political will and commitment, using the range of innovative mechanisms available. It is too early to write off our town centres as being in a ‘death spiral’, but for some that is a very real risk without urgent action.”