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Nick Sewell, Future of Town Centres
1. Future of Town Centres
Nick Sewell, Director, NewRiver Retail
Paul Wright, Director, NewRiver Retail
Place North West Retail Conference, City Tower, Piccadilly, Manchester
Wednesday 27 November
2. Overview
•
•
•
An Introduction to NewRiver Retail
Death of the High Street?
The Counter Narrative
•
•
•
Re-Defining the High Street
Community, Partnership, Innovate, Invest
Case Studies
•
Consumer
Discretionary vs. Non-discretionary Spend
Leamington Spa
Locks Heath
Wallsend
Conclusion
2
3. NewRiver in Numbers
UK’s 4th Largest Shopping Centre Owner/Manager
Average purchase
yield c. 9%
£450 million
assets under
management
24
UK-wide
shopping
centres
New
Look, Primark,
Cooperative, Supe
rdrug
Tesco
950
occupiers
105+ million
shoppers pa
96% average
occupancy
rate
3.8
million sq. ft.
3
5. Some High Streets are Underperforming
There are too many shops and obsolete stock
Chronic under-investment
Decentralisation of towns - out-of-town retail and business parks
Competition
Property taxation
Inadequate parking
Some locations will not recover
High Street decline is symptomatic of poor performing Town
Centres
A Thriving town matters hugely; they are our economic and social
hearts
5
6. The Counter Narrative
•
Retail spend remains resilient
•
Positive annual growth between 2007 to 2012
•
Recovery mode
•
Population growth
•
Retail spend remained resilient
•
Winners & Losers
•
Food & grocery expenditure is capturing circa
45% of total sales .
6
7. Retail Market
Source: Verdict
7
Primark, Aldi, Poundland – stellar
results
Not bricks vs. clicks – multi-channel
•
Neighborhood
16%
The cost of
unsustainable.
•
Out of Town
Food
23%
Non-store retail remains a small
channel
•
Town Centre
42%
Town centres capture 58% spend
•
Catalogue &
Bricks & Mortar
TV Shopping
Online Pure play
4%
4%
2%
Out of Town
Non-Food
9%
•
•
Retail Spend by Retailing Destination
Out of town food remains a significant
threat
free
delivery
is
9. The Consumer – Not just king but centre of the Universe
Defining consumer behaviour:
Polarisation of retail
Discretionary vs. non-discretionary
More informed.
More competition
Value, convenience, lifestyle
9
10. Re-Defining the High Street – Its not just about retail
Complex Range of Issues
• Convenience
• Clean, attractive, safe
• A broad range of services – community, housing, health
• The growing importance of Localism
• Markets / pop-up shops
• Lifestyle
10
11. Community, Partnership, Innovate, Invest
• Collaboration on town strategy
• Economic partnership
• Investing in your town centre
• Relieve the burden of property taxation
• Embrace technology
• The heart of the community
11
12. Conclusion
UK Retailing Remains Resilient
• Retail is alive and kicking
• The consumer is more than just King
• Joined up thinking between key stakeholders
• Hands on asset management
• Investment is key
• Strong town centres = strong retail destinations
12
13. Discover more about NewRiver & the true value of retail
Nick Sewell
Paul Wright
Executive Director
nsewell@nrr.co.uk
Director
pwright@nrr.co.uk
Join the Conversation
Watch
Our NewRiver Feature Video
(Search
for NewRiver Retail)
Explore
Our brand new website www.nrr.co.uk
Tweet
@newriverretail #trueretailvalue
Link In
NewRiver Retail
13
Notas do Editor
NewRiver plug. Investment thesis base on non-discretionary retail, affordable/sustainable rents, strong covenants, high frequency shopping.
Myopic reporting?Everyone has an opinion on retailComet – headline on evening news but not on the high street
Retail stock will shrinkInvestment in obsolete stock or change of useLocal authorities have assisted in decentralisation of everything – schools, offices, retail, cinemasThis is not just a retail problem but a town problem.Why invest in a failing town.
30% GDPEmployees x million Future growth predicted for 2013 to be at its highest level since 2007.
Amazon picked the low-hanging fruit and now that market is almost saturatedPrimark actively rejecting onlinePoundland, Lidl and Aldi aggressively increasing portfolio size. Exciting interplay between property and online.
To understand retail you must understand the consumerYou ignore the consumer at your perilNot Prime vs. SecondaryDiscretionary vs. PrimeFinite time and finite moneyValue, convenience, lifestyle
No Silver bullet – nostalgia must not drive policyConvenience – you cant out muscle the Trafford CentreSafe, clean parking is obvious but a rarity – should it be free to compete with supermarkets and retail parks.Open times is interesting. Goes back to convenience and catering to the consumers changing needsTown needs to offer a broad range of services – banking, healthLocalism – promote the town consumers can be loyalMarkets – incubate new businessesLifestyle – food and drinkSocial interaction
Master plan – future proof – not reactivePump prime investmentRelieve the burden of property taxation – level playing fieldIncubate new businessLoyalty
Retailing is a very large and exciting market and in the UK we have some genuine world class retail companies operating in our market placeThe challenge for the real estate industry is to be more focused on the consumer And if we can do that some very attractive returns are available for those that succeed