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Interviewer: So, Caroline, we’ve seen the UK economy go into deflation, what difference, what effect does that make for the retail sector?
Caroline: Well obviously it means that shoppers have got more money in their pocket as disposable income which is great from a retailers points of view, obviously the flip side of that is that prices are coming down through competition and the retailers are under pressure for their profits but equally if there’s more put through the shopping centres and town centres and people are spending more money that’s obviously a great benefit for them.
Interviewer: And the rise of internet shopping has really changed the whole horizon hasn’t it, does that have big impact on investment into the retail sector?
Caroline: Obviously it has had an impact because shopping habits have changed massively over the last five years and probably will continue to do so. The crash obviously had a massive impact on retail development. Retail development really slowed down afterwards if not completely stopped. What we saw with our clients is actually what they apply their cattle to was repositioning their existing assets so they carried out refurbishment, extensions on existing assets so to change them to become more of a destination for a shopper because that is actually more recognised as being a key to a successful shopping centre.
Interviewer: And how can legal advisers like yourself add more to a retail investment?
Caroline: Well, we work very closely with our clients so understand what their immediate aims are and also their medium to long term aims, so if for example with the clients that we were working with on repositioning the shopping centres, we were thinking about site assembly for extension areas, how we could get back units, should we need to make units into smaller units and combine into larger units, so we are working with our property litigation team and then actually one of the keys to running a successful asset alongside your client is really understanding where that asset is going and having a team that have a good knowledge of the asset so that everybody working on it understands the nuances of it.
Interviewer: Caroline, you and your team have been involved in some very big projects but what about smaller lettings and ongoing management?
Caroline: Well, this is an opportunity where we can work closely with the client to develop a consistency of approach. So what we try and do is have a team that is based around the shopping centre so that everybody working on that team knows it very well and understands its nuances then what we like to do is work up a standard approach to certain tenant amendments so that when the documents are agreed there is a consistency of approach across the shopping centre which means that the management of that shopping centre is better and also when you come to sell it the buyer can see that there has been that uniform approach to certain issues.
Interviewer: Caroline, thank you.
With the UK economy going into deflation, the retail sector is once again changing shape. Caroline Walker, Partner, Real Estate, looks at what this means for shopping centres and how the rise of internet shopping has impacted on investment into the retail sector. Caroline also looks at the idea of a shopping centre becoming more of a destination for a shopper.