Retail landlords say coronavirus will cause permanent changes
By Sarah Wood | 13th May 2020
Nearly eight out of 10 retail property owners (79 per cent), who own more than 120 million sq ft of UK retail space, believe COVID-19 will bring permanent changes to how retail property is leased.
Research by Colliers International looked into how owners have adapted to the coronavirus lockdown and how their strategy had changed in response to the Covid-19 impact on the businesses occupying their property, as reported by Retail Gazette.
The research found that the relationship between landlords and occupiers of retail property is changing and that the challenge going forward is to find a way for the relationship to stay viable. Colliers found that changes are likely to be driven by advanced data on things like footfall and turnover, to help set the level of rents.
But here in Gloucestershire, one commercial property expert says the change has been coming for a long time - and that coronavirus will just speed up the process.
Kurt Wyman of Kurt Wyman Surveyors in Gloucester said: "When you look back before coronavirus, the high street retail market was already in a pretty bad way. The high street was already undergoing a change - what Covid-19 will do is hasten the change.
"One of the main causes is that we buy a lot more online - it's the convenience factor. Since we've been in lockdown, people who would normally pop into a shop, will now think this is easier to shop online, especially as the offering isn't fantastic in a lot of shops.
"Online retailers don't have to carry same overheads that high street retailers do, like the particularly big rents in the centre of Cheltenham or Gloucester and a lot of money in rates, before you add staffing costs, heating and lighting etc. With retail, it is very much about the experience - a shop needs a great fit-out, and has to refresh it every few years. Online retail doesn't have those issues.
"When you look at large shop units in Cheltenham and Gloucester, is there going to be demand for large shops in future? It will come down to the market. But one positive is that there are new uses coming into town. There will be more leisure, and residential will come back in. How quickly this happens will be down to the market and how desperate people are to drive the change.
"Landlords and tenants will have to be imaginative and raise the game. Will landlords see the potential for redeveloping sites? Can they split shops, can they move into residential? They're not going to jump in with a knee jerk reaction.
"Retail isn't in great place at the moment, but change is coming in both Gloucester and Cheltenham. In Cheltenham, people like working in the town centre and big office developments will bring restaurants and bars. In Gloucester, work has started in King's Square to create leisure and entertainment space. On the back of that, small independents will come in to the city to fill the gaps. It will happen, but it won't be overnight."
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