Hotels, restaurants, gyms, bars and health clubs are leading an advance to reinvigorate the High Street according to latest market data.
Property market trends show that institutional investors have been more creative about the way in which they market assets that have, during the recession, suffered greatly as retail space has been abandoned, particularly given the onslaught of online retailers like Amazon.
New budget hotel operators, such as Tune, are particularly keen to move onto prime high street locations where hotel guests are able to make up for the lack of hotel catering facilities by utilising high street facilities. They are eyeing redundant office space on or near major retail areas for conversion, though the Government’s recent announcement allowing permitted development rights from office use to residential could inhibit this growth.
The Estates Gazette has reported a stark decrease in retail use, highlighted by the 1.7m square feet of retail space that was lost in 2013. The trend has been led by betting shops – 106 new shops gained planning permission last year, while gyms and health clubs took up 1m square feet of space in the same period. Relaxed planning laws have helped betting shops to proliferate, fueled by the increase in fixed-odds betting terminals. Consequently, this has caused increased concern for local councils, who feel less able to use the planning process to block such uses.
On the other hand, the number of retail shopping centres that are changing focus at present continues to grow. Opportunities around the development of new cinemas are particularly key as cinema operators generally require restaurant provision nearby in order to open. Institutional investors are therefore looking at the redevelopment of secondary assets in particular to provide for leisure uses that will give shoppers a more rounded experience, and another hook to visit the high street. Consequently, such areas are moving more towards the 24 hour economy.
New retail developments are often built with 15-20% of leisure use and it is becoming clear that in order to survive, the High Street may need to adapt in the same way.