Malls must come full circle to find their place

The retail sector is under increasing strain to speed up its physical evolution in order to facilitate new consumer demands. Those new realities are changing the way shopping centre managers and owners are looking to nurture the longevity of their assets. Understanding that journey can be complex, with the industry gathering at last week’s inaugural Destination R event in Birmingham to debate just how to get there. The dynamics of retail and the changes faced by those invested in real estate has come to the fore over the last 12 months. The sentiment at Destination R was one of acceptance, but also optimism. The chat was candid and frank. According to Stephanie McMahon, head of research at BNP Paribas Real Estate: “Everyone always thinks that they live in the worst town in the UK.” To highlight on a macro scale, a slide showed research into the expected GDP of individual countries next to their actual GDP ranking. Us Brits are perennial pessimists, but we really shouldn’t be. In reality, our rich culture means that we have a delightful tapestry of exciting and different town centres and destinations. This is the bedrock of any destination to have longevity. The “build it and they will come” thesis of shopping centre development is long gone, mused Mark Robinson, director at Ellandi and REVO president. The destination is the town itself. For too long identikit shopping centres and malls have been copied and pasted across the country. The heritage of an area should encapsulate any reason consumers decide to visit a destination. One of retail’s many problems is the lack of differentiation on offer. This is one of the contributing factors to the number of stores closing. Radius Data Exchange analysis shows that 19.2m sq ft of space has closed since the start of 2018. So how can asset managers control their changing environments? One potential future-proofing exercise is to simply ask what locals actually want. There needs to be a balance between experience and utility – to most people, especially in today’s economy, price is important. Sometimes the industry runs away with itself with big shiny experience-led concepts, and it shouldn’t. In reality there are simply too many shops. It is this oversupply of stock, or as one prominent industry leader paraphrased it, the “under-demolition of space”, that is forcing values down and causing rental instability. If you have two large schemes in a community but there is only capacity for one, how do you tackle that? If values are through the floor, then who’s going to want to sell up? Are council CPOs the only way to recalibrate the sector? Perceived value of the bricks and mortar v the real value of the land it sits on is going to cause continued friction to this impasse. For too long identikit shopping centres and malls have been copied and pasted across the country. The heritage of an area should encapsulate any reason consumers decide to visit a destination. The serious issue of homelessness in community centres was also highlighted at Destination R, with a session looking at how shopping centre managers share responsibility to alleviate people from crisis.  The message was clear: it is the communities that make a destination, not the bricks and mortar. And to end – a brainteaser. Ever heard of Victor Gruen? Neither had I. Gruen was the principal designer behind the first shopping mall, the Southdale Center, built in 1956 in Minnesota, USA. A good one for any pub quiz. Make Architects and Ralph Ardill highlighted in a joint presentation on Designing the Future that before the insular, big-box all-purpose mall was copied over and over again, Gruen’s concept had been to create something different. “A community centre with apartments, schools, medical centres, parks and offices where people could stroll, congregate, debate and enjoy the human experience.” On the evidence of today, it looks like we are about to come full circle. To send feedback, e-mail james.child@egi.co.uk or tweet @JamesChildEG or @estatesgazette