Retail overspacing is becoming a serious issue in the UK. Recent research suggests that the sector is over spaced by as much as 40%; a situation that may be further exacerbated by the impact of the COVID-19 pandemic.
The big question is – what’s the best way to tackle this problem? Experts suggest that a good solution is to repurpose retail premises, and adapt to the evolving market.
Repurposing – a creative answer to a growing issue
Increasing numbers of investors are repurposing their existing retail space. If you’re considering doing the same, think about the following:
- What’s in high demand in your area? For example, office space may be limited, and converting a store into an office may immediately increase tenant interest.
- What about the community? Can you offer something that’s of value in social terms? Community / social spaces are experiencing a surge in popularity at present, and this may be something that your retail premises would be suitable for.
- Could a radical change be in order? The investors generating the highest profits are those who dare to think outside the box. For example, experiential shopping has become more popular; is this something your retail space could offer? In this instance, the work involved with repurposing might be relatively minimal, and not require so much financial outlay.
An example of repurposed retail space
Unsurprisingly, repurposing is popular in cities across the UK. A great example is the retail park on Old Kent Road in Southwark. Originally built in the 1980s and 1990s, planning permission has been granted to turn it into mixed-use space. The plans feature new residences, a park, a square, restaurants, plus retail and office premises.
Galliard Homes and Aviva (who are handling the redevelopment project), claim that the new retail units will be better suited to the way people shop nowadays, and will be perfectly positioned to meet the needs of the residents who will live in the 1,200 new homes.
Ask yourself the following…
- Will it work in the long-term future? Repurposing multiple times is seldom financially viable, so it needs to work for years to come, not just for the immediate future.
- Is there a call for it in the local area? If demand isn’t high, it might be time to reconsider your plans.
- What are other commercial property owners doing? Find out if there have been any other repurposing projects in the area, and examine the steps the investor took to make it a success.
- Do you want the building to be single- or multiple-use? Can revenue be maximised by making it a mixed-use commercial space?
- How much will the work cost? It’s vital to factor all expenses in, and to forecast the level of profit you can anticipate making in the future.
- Can you benefit from thinking creatively? For example, is your area crying out for a theatre or art gallery? Could the space be used as an educational facility or a care home? Don’t be afraid to be creative – it could pay off in the long run.