Repurposing may not be a new concept, but it is one which has recently gained significant momentum. Widespread store closures are affecting the retail sector; there is simply too much empty space. The UK currently has 142 m sq ft of vacant retail space, equivalent to 12.6% of all retail units. A huge opportunity exists in the market for investors, landowners and developers to repurpose this redundant space for alternative uses and solve real world problems. The high street as we know it might be dead, but this leaves a unique opportunity to repurpose, and in doing so to create something much more robust and sustainable.
Trends and Opportunities
The UK lockdown has seen many of us being forced to work from home. Whilst this is not going to be permanent, a level of flexibility and the merging of work and home is here to stay. A key trend in repurposing is therefore one which creates mixed-use community led developments that pool together all the necessities that a consumer may require on a daily basis, including work, socialising, food and drink, healthcare and wellbeing. This is a trend which benefits consumers as they are provided with convenience and a sense of community and developers from an economic perspective since 'cross-pollination' may occur, where consumers may explore other experiences which are on their doorstep in these mixed-use 'hubs'.
Repurposing does not come without its challenges. From the outset, there are three main stumbling blocks facing those who wish to repurpose retail spaces: viability, retrofitting and unchartered territory.
In terms of viability, the costs of repurposing remain high and cash resource is scarce. Funding mechanisms are therefore on the rise and we will see the amount of joint ventures increase.
Retrofitting can also be a potential issue since often, buildings may not be fit for the repurposed use. Take the example of repurposing a department store into a mixed-use development containing a workspace, a social setting and a healthcare centre. The ceiling heights, lighting and facilities of the department store may not be fit for purpose for this new social 'hub' and will be costly to rectify. As such, a demolition and rebuild may be more viable than a repurpose.
It is untenable for retail spaces to sit empty for much longer. As such, decisions need to be made now as to what will occupy the space going forward. The challenge is to select commercially appropriate options. However, landlords and developers are doing this in unchartered territory and there is not much information about what will work. They must predict what will happen in the future with these spaces, despite us being in such unprecedented times. A new paradigm is necessary, and landlords must think about the long-term viability of their projects instead of focussing on securing the best rent they can at the present moment.
Key Ingredients for Success
The amount of redundant retail space is expected to rise to 308m sq ft by the end of the decade unless changes take place. Retail will always have a place, however it will never look as it did before. The reduction of retail will reduce oversupply whilst allowing us to support the retail that remains.
For repurposing to work, there needs to be a focus on community, collaboration and long-term goals with excellent partnerships between private and public sectors to create these repurposed spaces, which are more efficient and focus on social value. They must not only repurpose but do so sustainably. Repurposing is here to stay.