Attention to Retail

Guest Post: RECon 2013 - Day Three

2013-05-23T07:50:43Z

As RECon 2013 draws to a close in the Las Vegas heat, CBRE head of consultancy Jonathan De Mello gives us his final recollections on an eventful few days.

"Tuesday at RECON - what a day!! The conference area was extremely busy as Tuesday was essentially the last day before everyone heads back home on the Wednesday. I was even busier than Monday with a host of meetings both planned and impromptu - really frantic but highly productive networking with lots of great new contacts and some interesting new brands that are keen on entering the UK and wider European market.

Now Americans aren't exactly known for being environmentally friendly, with BIG Oil, BIG cars and the ability to super-size pretty much anything, but the key theme I picked up from RECON this year - from a number of different US retailers - was their desire to build retail 'ecosystems.'

This generally but not exclusively applies to retailers that also have wholesale and concession 'doors' in addition to free-standing stores and an omni-channel platform, but essentially relates to a desire to make money from a market overall through 'balancing' the ecosystem of all possible outlets, in addition to building brand equity.

In the digital age this approach is becoming increasingly relevant, as retailers compete to trade in the best locations with high footfall in order to build up the brand which in turn fuels growth for their online business - which generally yields stronger profit margins for them. The ecosystem concept extends this further to incorporate wholesale and concession retail too, which again can in certain markets outperform free-standing stores from a profit margin perspective.

Channel choice is therefore key, but free-standing stores are essential to this in terms of building up brand equity to drive sales through the other channels, as well as providing an outlet for click and collect services, which generate the highest margin of all given the delivery costs associated with pure online retail. Given the continued importance of free-standing stores - which in themselves will not typically generate stellar margins in very high footfall areas given these locations often have very high rents to match, as an industry I have often thought we should move towards trying to measure the positive impact of a free-standing store on brand equity.

One way that this could be done is through applying metrics PR firms typically use - such as 'advertising equivalent' to footfall numbers going past a store. This would better aid retailers - and landlords - to understand and quantify the true benefit of having a store beyond just turnover and profit.

Wasn't planning on writing an essay for this blog but it has sort of turned into one - so moving on - it is impossible to write a blog on Vegas and not talk about the evening networking that goes on outside the convention centre. Tuesday night was particularly fruitful for me from that perspective with the NY Developers pool party at the Bellagio, a great dinner at the Mandarin Oriental with some current and new clients, and finally 1 Oak club at the Mirage, where a number of brokers were to be found engaging in a final bout of networking over drinks to wrap up their ICSC in style. It was a fitting end to a great trip to Vegas, and I for one will definitely be back for more next year!"

Guest Post: RECon 2013 - Day Two.

2013-05-21T09:30:08Z

CBRE's head of retail consultancy, Jonathan De Mello, takes us through the events of an exciting second day at the global shopping centre market conference in Las Vegas.

"It was a real mission to get out of bed at 5am on Monday morning, following the 10-hour flight the day before and consequent heavy jet lag. However, I am glad I did given the hundreds of delegates that were waiting in the conference room for the panel session at 7am when I got into the convention centre! Americans take the adage of work hard/play hard to new extremes, with many of them looking rather the worse for wear after a big night on the Vegas Strip, but still very much there and ready to do business on what must have been only a few hours sleep the next day.

It was great to be part of the panel session with some good questions put to us by the moderator on omni channel, the future of retail, property investment, innovation and other topics. As I was representing European retail, questions on the Eurozone inevitably came up, linked to retailers' current appetite for expansion within and beyond the European marketplace. It is clear listening to the other panellists that retail faces similar challenges around the world, though each country/region has its own particular issues, such as import duties in Brazil discouraging retailers to invest there, or lack of quality infrastructure in India, which presents significant logistical challenges.

Overall though the mood at the session and also during the first day of RECon itself was upbeat. Attendance numbers are well up on previous years and currently tracking ahead of pre-2008 levels. Delegates here, whilst mindful of the lessons learnt post-Lehman, seem to be looking forward to the future with positivity. The key word being used here is 'growth' in contrast to an extent with the UK where business sentiment seems to be a little less upbeat at present. However, it is only a matter of time - given how closely linked the UK and Europe are to the US - before that positivity begins to permeate into UK retail. It's about time too given we are currently in one of the longest downturns in the economic cycle since records began!

The convention centre itself is hugely impressive, with some opulent stands on display. There are three separate areas spread over the 1m sq ft exhibition space - each one of which could comfortably accommodate the entirety of the Mapic 'bunker.' Today was very much about pre-arranged client meetings as given the sheer size of the venue randomly bumping into people you hope to meet simply isn't feasible in the way it is at BCSC, Mapic or any of the European conferences. CBRE alone have brought circa 800 delegates from around the world, which gives you an idea of the scale of the event. My meetings today were very much back to back, and mainly with retailers - many of which aren't currently present in the UK and Europe but are interested in the market, or have a fledgling presence but want to expand further. Some good new names coming to a retail centre near you soon - watch this space!"

Guest Post: RECon 2013, Las Vegas - Day One.

2013-05-20T09:48:17Z

RECon 2013, the global shopping centre market conference, is upon us again. And more than 30,000 industry figures are descending on Las Vegas for the summit this year. CBRE's head of retail consultancy, Jonathan De Mello, has sent his first report from the front line. Expect to hear more from him on this blog over the next four days.

"In a taxi on my way to Gatwick and RECon 2013 and very excited about my first ever trip out to what is the biggest get together of retail and property professionals in the world. I have attended MAPIC every year over the last 10 years, but everything I have heard about RECon is that it - in true American style - is a supersized version of that - on steroids with a huge side order of fries!

Sunday is CBRE's Cabana party at the Wynn pool, which unfortunately I am going to miss as my plane won't get into Vegas in time. The whole idea of networking in your swimming trunks by the pool is quite alien to us Brits, and probably with good reason given the average fitness level of Brits in property is likely to be sub-Vegas poolside standard! However, I am looking forward to the CBRE opening cocktail party at the Encore later - to catch up with a number of clients that are attending the event from around the world as well as CBRE colleagues I haven't seen for some time.

Looking ahead, these opening events are definitely the calm before the storm, with a whirlwind series of back to back winner takes all 30 minute meetings from Monday morning onwards into Wednesday when everyone heads home. Monday morning at 7am is the Global Delegates breakfast, and I am honoured to be part of a panel there representing Europe, with panellists also there from the US, Asia, and Latin America. It should be a good session given the questions that have been circulated in advance on the impact of omni channel and other topics, and I am hoping to provide some insight to delegates on these topics from a European perspective. If you are reading this blog and attending RECon, it would be great to see you there bright and early on Monday morning!

Approaching Gatwick now in record time - thanks to an 'out there' cab driver that sees speed limits more as guidelines than statutory law!"

BCSC Retail Summit: Town centres need revolution.

2013-05-15T08:07:11Z

Yesterday's Estates Gazette/BCSC Retail Summit gave the strongest impression yet that the industry is ready to cut loose the chains of its troublesome recent history, and focus on creating a bright and prosperous future.

The most stark indication of this attitude came from Distressed Property Taskforce chairman Mark Williams, who said categorically that the industry group was focused solely on the future - and it looks like being one borne of something of a revolution in retail property.

Williams said what everyone already knows - that there is an oversupply of retail space in this country; but added that in some locations the oversupply is by a factor of around 50%, and that levels of regeneration not seen since World War II are necessary to recalibrate the retail market in those long-suffering locales.

Last year's BCSC Conference was laden with references to 'managing' town centres as one would a major shopping centre - and that theme was heavily expanded on yesterday. New River Retail's Charles Miller told the room that investment in a major mall is not just about what you're buying, but the surrounding area; and how crucial it is to create fusion, rather than friction, between the two.

It was mentioned on numerous occasions by more than one speaker that fractured town centre ownership is stymieing the requisite improvement in high streets, and engenders the old-style laissez-faire landlordship once leases are secured.

In the interest of combating such attitudes, Peter Brett Associates launched their 'Town Centre Investment Management' (TCIM) initiative during the afternoon session. It is designed with the expressed intention of bringing investment back into the high street by using an adapted form of Local Authorities' CPO powers to bring about uniformity of town centre ownership.

Whilst these aren't necessarily new ideas, the belief is that with the momentum currently behind town centre regeneration and the ongoing political discussions around the subject, now could be the best time to force political will in the direction of supplying proper solutions to those well-documented town centre problems.

Political will could yet prove to be the greatest stumbling block to securing that bright future for the retail industry. Consents still fly in for out-of-town developments, occasionally going against the recommendation of planning officers, and there was a palpable scepticism in the room when asked if Local Authorities had the collective desire to make a policy such as TCIM work in the long term.

BCSC President and Chaiman Marcus Kilby said in his summary of the day's discussions that 2013 could yet be the year looked back on in a decade or so as the year in which the retail industry began its crucial evolution into an overwhelming success story. The first shoots of that evolution are present, without question; but there remain several overarching caveats that must be addressed before that first great leap forward.

Online sales continue to hack away at the high street

2013-05-08T10:04:59Z

The British Retail Consortium and KPMG today published their latest figures indicating year-on-year sales performance across the UK.

The figures showed that April, hamstrung by March smuggling away (in part) the bonanza Easter weekend, has suffered the first drop in overall spend in comparison to 2012. They also pointed to continued growth in on-line retailing which, despite the overall sales drop, jumped 8.3% on the previous year:

BRC-KPMG Sales Monitor: 2013 | Create infographics

I mentioned on here about a year ago that the rumbling on-line retail machine was effectively immune from any kind of fluctuation in overall sales, and would simply continue to rise. This has been overwhelmingly corroborated by all KPMG & BRC updates over the past year, which indicate a year-on-year increase in on-line sales every month; peaking at a 17.8% rise in December 2012.

What it effectively means for retailers is that they will have to continue to manage their physical retail presence to cater for a public who are increasingly using the internet as their one-stop shopping arena.

Retailers' trading updates now often give strong indicators that they are looking to reduce physical space in order to focus on multi-channel sales, and not before time. On-line sales now account for just above 10% of all transactions nationwide - and it wouldn't surprise me in the slightest to see that figure continue to creep upwards over the coming years.

Whilst it's uncomfortable news for landlords, what is still required is a slimming-down of store portfolios in order to recalibrate retail footprints to accurately reflect the modern marketplace. Several brands have done so this year already - albeit via the unwanted conduit of administration; a discomfort which needn't be necessary if retailers are alive to the realities of the environment in which they operate.

M&S - Marketing and Seat-Covers?

2013-04-17T10:50:12Z

Any advertising executives out there may well be able to prove me wrong - but I don't think I've ever seen a campaign for a store opening which revolved around bicycle seats.

That novel approach is just what Marks & Spencers have adopted in promoting their new store in Amsterdam, working through the night to place branded seat-covers on the Dutch capital's some 1,000,000 bicycles:

Suggestions as to how a retailer might tailor a similar campaign in the UK are welcome...

Trinity Leeds prepares for lift-off

2013-03-21T08:46:05Z

Today brings the end of a barren spell in the UK retail market that has not been experienced for some time. All eyes are on Yorkshire as Land Securities delivers its mammoth 1,000,000 sq ft Trinity Leeds - some 555 days after Boris Johnson cut the ribbon at Westfield Stratford.

Such a drought in the development pipeline would have surely been unthinkable back in the halcyon days of 2008 - a year which saw Westfield London and Grosvenor's Liverpool One amongst twelve new malls to open in the UK.

The drop down to 'zero' in 2012 can be attributed to an overwhelming litany of factors - economic difficulties for both retailers and developers, a lack of adequate funding, anchor-store pull-outs, 're-evaluation' of planning proposals, refusal of planning proposals, decreasing consumer confidence and the mall-crushing behemoth of on-line retail are only a handful. Essentially, the story is that the fall in new retail development over the past five years is one of the starkest representations of what the global economic crisis has done to this country.

Nonetheless, today should be a celebration of UK retail and its ever-increasing adaptability to difficult circumstances. There have been a lot of noises coming from Land Securities about Trinity Leeds being seen as an 'experience' destination - rather than simply a place to shop. This could ultimately determine the level of the mall's success, as developers increasingly look towards leisure and catering services to help boost footfall and tempt customers away from the convenience of shopping on the internet.

The opening comes at a time when UK retail desperately needs a shot in the arm. Yesterday's budget left the calls to re-think the business rate revaluation delay unanswered, and retailers facing a £175 million additional rates bill in April. This comes off the back of a dismal January which saw three major retail chains falling into administration, causing 10,000 jobs to be put at immediate risk as around 1,000 stores faced the axe.

All that can be put to one side today, as Land Securities can enjoy the fruit of a very long, and at times arduous, labour. Having downed-tools in 2009, you would have got extremely long odds on them opening a 90%-let scheme in March 2013, complete with the first Everyman cinema in the north of the country, in addition to a string of highly-sought-after retailers and catering outlets. It's a huge credit to them, and to Leeds as a whole, that they have done so.

From Gavels to Guns...

2013-03-15T12:42:57Z

EGi Planning monitors the vast majority of applications throughout the U.K. and as such we occasionally come across some strange-sounding proposals.

One caught my eye this week in Herefordshire, in which it is requested to change the use of part of the Cotswold Design Centre from an Auction House to a 'Retail Gun Shop'.

Clearly, a transition so smooth only a fool wouldn't have thought of it...

All application details here.

Momentum for Coventry's retail future

2013-03-12T09:09:03Z

News broke yesterday of Friargate Coventry LLP's agreement with landscape architect Gross Max to deliver the public realm of their gigantic 37-acre development to the south of the city centre.

The office-led development is now set to get underway later this year - bringing 2.4 million sq ft of new office space to south Coventry, in addition to over 200,000 sq ft of retail.

This is one of three schemes in Coventry City centre which promise a total of around 1 million sq ft of newly-built retail space - the other two being Barberry's proposed redevelopment of the Royal Mail sorting office on Bishop Street; and the mammoth project adjacent to Friargate being undertaken by Coventry City Council and Aviva.

The image below shows the location & scale of these projects; with Friargate outlined in red, the city centre development outlined in blue, and Barberry's site in Orange.

Despite being the UK's 11th-largest city, Coventry currently lags in 49th position nationwide according to retail spend - and so the need for an overhaul of an enormous chunk of the city centre is of paramount importance to ensuring a successful future for this under-performing Midlands giant.

The notion of work getting underway on Friargate by the end of this year is encouraging to say the least. By that time, a development partner ought to have been secured for Aviva's retail-led city centre scheme, and that staggering total of 1 million sq ft of new retail space may take another giant leap closer to becoming a reality.

'Westfield Croydon' application registered

2013-02-18T11:12:47Z

Last month's seminal announcement over Croydon's retail future led me, among many others, to ponder over what the exact specifications of the new joint venture project would be.

I suggested that a new application towards the end of 2013 might take on the guise of Hammerson's "Whitgift Quarter" proposals, spanning across Croydon's two mammoth retail developments, Centrale and Whitgift, rather than separate applications for each scheme.

It appears I was wrong.

Two weeks ago, Croydon Council registered (for the first time) the full application lodged in September by Westfield, after having put forward a scoping opinion a couple of months prior. The applicant is now listed on the (amended) application form as 'Westfield Shoppingtowns Limited & Hammerson UK Properties PLC':

Strangely, the applicant listed on the 'application details' has changed over the weekend from the above to simply 'Westfield Shopping Towns Limited'. What we read into that, I don't know.

All documents within the newly-registered application make occasional reference to Centrale's role in the Croydon facelift, and make almost no mention of Hammerson at all! It's also interesting that the Design & Access statement for 'Westfield Croydon' (!) makes a pointed reference to the successful regeneration of King's Cross as being a precedent for a redevelopment of this scale.

So it appears that Hammerson is happy to "piggy-back" onto Westfield's concept for the Whitgift Centre redevelopment, having already secured consent in May 2012 to part-redevelop Centrale into a distinctly mixed-use mall.

Can we conclude, therefore, that the project will move forward as a double-pronged concept? Will the Westfield-branded shopping mall outlined in the new application come to pass? Can the 170,000 sq ft of leisure space proposed by Westfield coexist with the 99,000 sq ft currently permitted at Centrale?

If the answer to all of these is 'yes', then the exciting announcement made in January may not, in fact, yield an organic regeneration brainwave concocted by two retail heavyweights - but actually simply serve as a catalyst to accelerate two separate projects which could possibly have come to pass independently.

I suppose I would just be a little disappointed that the 'vision' for Croydon might simply turn out to be a staccato amalgamation of separate concepts, as opposed to an inspired 'meeting-of-minds' development spanning over both malls which could truly rubber-stamp the identity of the unique joint venture on the south London town.

If the development is to be as described herein, then the key piece of cross-party co-operation will come in ensuring the complementary nature of the retail and leisure offer across both redeveloped schemes. 'Hammerfield' must ensure that the newly created "Quarter" evolves as a singular, functional retail core, and not as one entity prospering at the expense of the other.

Major New Schemes Join the Pipeline

2013-01-31T09:03:52Z

With the apparent dearth of new retail schemes due to grace the 'completions' list in the near future, it might come as pleasant news to learn that over the past month, EGi's Retail Scheme database welcomed four new major developments comprising a total of over 600,000 sq ft of new retail space. Click the icons on the map below for more details on each (zoom out to see all icons):

Whilst you wouldn't classify these as 'traditional' retail schemes, they are nonetheless indicative of a growing trend in the retail development world - namely, to build new space as part of a mixed-use scheme, rather than restricting projects to A1 use. Indeed, we are now even seeing owners of high-profile malls look to alternative uses to help fill vacant space and increase customer numbers (in addition to dwell time).

Of particular interest is the proposal just north of Dunstable, known in the official council document as the "strategic urban extension of Houghton Regis" It reminds me of a similar proposal I blogged about in November 2011 - an entirely new town on the Hoo Peninsula, to be known as Lodge Hill.

That particular scheme is still without outline approval after 15 months, so with that in mind I'll hold off on predictions as to when all this retail space will complete. It's encouraging, however, to know that despite all the well-documented struggles facing the retail market, there remains the ambition of developers and councils to keep faith with large-scale retail schemes - even if, going forward, retail space has to settle for being a constituent part of a mixed-use project, rather than the headline act of a single-use mall.

Croydon Impasse Finally Resolved.

2013-01-17T09:02:59Z

A new year brings new allegiances, and if 2013 brings a more noteworthy one than the Westfield/Hammerson joint venture announced today, it might well cause the property industry to implode.

So many column inches last year were dedicated to the 'impasse' between the two heavyweights over the proposed redevelopment of Croydon's Whitgift Centre - and with it, the potential to dominate South London's retail and leisure scene for the foreseeable future.

The origin of the feud came via this story in November 2011, when it was announced that Westfield had began exclusive discussions over the scheme redevelopment with freeholder and 25% long leaseholder, The Whitgift Foundation. Fellow long leaseholders, Royal London Asset Management and Anglo Irish Bank didn't take too kindly to this being announced without their blessing, and so backed Centrale owner Hammerson to oversee the regeneration of both malls.

Since then, we've had 14 months of carefully-designed surveys, various planning applications, 'battle lines' being drawn, mayoral opinions, and even presidential election-esque tactics, as each developer strained to one-up its rival. But now, thankfully, we have a resolution.

A press conference taking place this morning will reveal more details behind the joint venture's proposals for Croydon, so it's unclear at present if existing planning applications or consents will be factored into the £1 billion regeneration project.

Hammerson obtained permission in May 2012 to reconfigure 140,000 sq ft of retail space at Centrale into an 11-screen cinema, two flagship retail stores and eight restaurant units. For its part, Westfield has lodged an application for the redevelopment of the Whitgift Centre, with 1.3 million sq ft of retail space, and 150,000 sq ft dedicated to leisure.

One would, however, anticipate an entirely new proposal to be lodged - and I imagine that it will be Hammerson's "Whitgift Quarter" - an amalgamation of both schemes - that provides the blueprint for the joint venture to take forward.

In any event, it's terrific news for Croydon residents and Croydon Council after over a year of uncertainty - they have two heavyweight developers with an unrivalled wealth of combined expertise in how to build large, successful schemes. Lets hope that the joint venture yields more than the sum of its parts, and that the town can finally live up to its enormous potential.

Guest Post: Outdoor Media and Retail Property

2012-12-14T09:28:58Z

In a climate where shop vacancy levels are continually on the increase, it may come as a pleasant surprise to hear that demand for prime billboard space in busy retail destinations remains high. Large-format outdoor advertising sites can generate important new and incremental revenue streams for retailers, landlords and managing agents, explains blowUp Media Group Managing Director, Katrin Robertson.

For advertisers, getting their brands noticed at the point-of-sale when people are in a buying mode is of paramount importance for influencing buyer behaviour. Therefore non-traditional outdoor advertising sites in and around shopping malls and bustling High Street locations are highly sought after.

For retail landlords, giant banners, building wraps and even digital screens, can also offer a great way to secure vacant premises, contain and fund restoration work, beautify city centres and generally leverage advertising revenue from existing properties on a short term or ongoing basis.

Banners can help to disguise vacant properties and keep an area looking bright and vibrant rather than appearing empty or run down. This helps to keep rent prices buoyant in the area and can form an important bridging gap when properties are not leased.

Building wraps also offer excellent protection during shop renovations, concealing unsightly building work and keeping the high street looking clean and tidy.

On a practical level building wraps can encase scaffolding and protect passers-by from the mess and noise of building work. The light weight mesh materials of the wrap also allows light to permeate the property beneath.

Building wraps can mimic the original façade and showcase what the property will look like once renovations are complete. Printed façades can be important for historic buildings requiring long term repair work. Ad revenue can help to fund conservation projects and contribute towards city beautification, as was the case during restoration work carried out to the historic Tower of London.

For retailers, banners can provide powerful brand building opportunities that ensure their premises stand out from the crowd. During the Games, a hot bed for gigantic banners and eye catching building wraps, John Lewis wrapped several key stores across the UK to highlight its role as the Official Department Store Provider to the London 2012 Olympic and Paralympic Games. Their flagship store wrap (right) consisted of a 4,000 square foot Union Flag, highly visible along Oxford Street at a time when visitors to London swelled to over 10 million.

Outdoor advertising sites can provide long term opportunities for landlords in areas with significant footfall and proximity to retail destinations. More advertisers are embracing digital signage as a way of bringing their brand stories to life using full motion video. Digital delivers cut through and brings new flexibility to Out of Home, and has the additional benefit of being remotely update-able at the click of a button. Digital signage also enables multiple advertising campaigns to run consecutively with the potential to earn higher ad revenues.

When looking for an outdoor specialist to partner with, property specialists should look for a one stop shop to help realise their project from conception through to delivery. Generally speaking, Giant Posters need approval from the authorities, so selecting a company with both an in depth understanding of planning permissions and excellent relationships with local authorities is a must. Operational experience, safety track records and sales acumen are all integral to ensuring your site looks good and is constantly earning ad revenue.

Well executed banners can lift an area by creating clean, bright, modern looking spaces. Great advertising campaigns are also well received, fun and create 'talk-ability' amongst the public. Done well, outdoor advertising can generate significant returns for landlords looking to leverage their portfolios.

BlowUP media specialise in large-scale outdoor advertising, and currently manage over 300 locations - the largest such network in Europe.

http://www.blowup-media.co.uk/

Time for the annual deals showdown...

2012-11-28T16:17:35Z

As we draw further closer to the end of the year (and possibly the world, if you're a believer in certain prophecies...), it is once again time to champion the annual EGi Deals Competition!

The competition, widely recognised as being one of the top accolades for agents, charts all deals done

across all market sectors across the entire country. Last year's competition was the most

popular since its inception, with prizes awarded for the most successful agency across each sector in each region, plus an overall winner.

Entry to the competition is free, and there are no minimum thresholds for deal size - we'll take them all!

CLICK HERE for all other information on this years competition, plus information on previous winners, and all details on how you can submit deal information to us.

Good Luck!!!

Use Type: A3/4/5 - Floating Restaurant

2012-11-23T10:37:38Z

Occasionally, EGi receives marketing particulars which throw our Post Office-based address finding tool a great big curve-ball.

This brochure came through over the past couple of weeks. A classic 'restaurant on a boat' opportunity in South Quay:

Fortunately, we're flexible enough to be able to advertise the premises - although sadly we don't have a use type 'A3 - Restaurant - Seaworthy Vessel'.

All details available through Colliers International here.