Is out-of-town staging a comeback?
Published: 26 June, 2009
Earlier this month I spent a very instructive day holed up in a West London restaurant chairing the SCEPTRE Awards judging day. As ever it was a fascinating experience to see the industry experts who make up our panel analysing the entries.
What was immediately clear is that the recession has brought out the best of the shopping centre industry and centre teams are showing real creativity in the ways they maintain service levels in the face of shrinking budgets.
Of course the real hard work is still to come if service charge reductions of up to 20 per cent are to be delivered, but I came away from the meeting heartened by the feeling that the management sector is up to the challenge.
While I hesitate to use the phrase ‘green shoots of recovery’ are there signs emerging that at last the consumer and occupational markets are beginning to level off? Certainly Apollo’s decision to buy into the Junction fund looks like a classic bit of bottom fishing.
The out-of-town market led us into the downturn as investors shunned a sector that looked over-reliant on the housing market to drive trade. Now Experian shows footfall trends at the country’s
retail parks outperforming the high street for the first time in many years.
Added to this, John Lewis’s decision to launch its new format on one of Land Securities’ retail parks is yet another vote of confidence in the beleaguered sector.
JLP doesn’t do anything without meticulous research so the fact that it wants 30 units of 45,000 sq ft across the country shows it thinks it can succeeed where Marks & Spencer’s ill-fated Lifestore failed.
DFS, with its huge advertising spend, has long been a powerful anchor for bulky goods parks where other furniture brands cluster alongside to take advantage of the footfall it draws. Now JLP could be set to play an even more powerful role in drawing customers and it could transform the parks it chooses to locate on.
Add all these together and the Junction deal could look very clever in a few years’ time.
Of course the end of a falling market doesn’t always mean we’re about to enter a rising market: we could be entering a period where the markets bump along the bottom.
But any indication that values aren’t going to fall much further could encourage buyers into the investment market and give longer-term owners the certainty they need to begin investing in their properties once again.