News & Media
ONLINE VERSUS RETAIL- Implications for property
As we all know too well, our world is rapidly changing, as our shopping activities and habits. Whilst many of us initially resisted the allure of online shopping, social media, pervasive online advertising, becoming increasingly time poor and the lure of online only bargains have changed all of that. Furthermore, access to all of this via smartphone compatible apps has made it too easy to spend our travel or leisure time on line, where the temptations are available 24 hours a day! Many of us watch TV these days whilst browsing our smart phones, whereas previously one had to address the computer screen to do this!
What has this meant for the property market? As many may know the fulfilment industry has grown exponentially along with the postal and courier services who facilitate delivery. Large scale industrial space near motorways has benefited greatly in take up.
However, what is this doing to our traditional retailers who originally supplied all of our needs? I am referring to both large format & traditional high street retail. Large format retailers such as department stores have in many instances significantly reduced their floor space and in some instances closed outlets. Hardware and homewares being the exception here. High Street retailing has fallen away dramatically, with many areas experiencing persistent vacancies, even in what were previously regarded as the better retail areas. High Street shops are turning to new uses, other than their traditional ones, and we are seeing a proliferation of charity shops, convenience stores, health & beauty businesses and innovative food operators.
How has this impacted values and rents? The outcomes are varied. In some instances, vacancy has driven site amalgamation & re-development which has been financially beneficial to property owners. In others, rents have had to be recalibrated, generally downwards. This recalibration of rents has also encouraged new and innovative uses of retail space, which will provide future demand and value for these properties. On the plus side, retail zoned land is limited by comparison to the majority of land uses in most areas, so it remains valuable. The other positive is that online shopping may be efficient, but it does not satisfy our social & entertainment needs, which means that there is still a place for retail in our lives. Covid fears have been a real dampener on shopping centres, but fortunately this is fading as it moderates and we become used to dealing with the reality.
In conclusion, outcomes vary greatly & we need to remain innovative. Call us if we can help.