Action is needed to save North East towns

THE crisis faced by many town centres and how to revive them has been extensively debated over recent months.

Morpeth Town Centre
Morpeth Town Centre

THE crisis faced by many town centres and how to revive them has been extensively debated over recent months.

The Portas Review made a series of sensible recommendations, most of which have been adopted by ministers.

However, in GVA’s view, these palliative measures do not address the reasons why so many town centres are failing to achieve the meaningful new development and investment needed to secure their future.

In the 2000s a record amount of new town centre retail development was undertaken, stimulated by a buoyant economy, strong occupier demand and rising rents and capital values.

The development pipeline has now effectively come to a halt and, with it, the catalyst for new investment in town centres. 2012 will be the first year since BCSC records began in 1983 that no significant new centre has opened. A few new schemes are under way and more are planned, but far fewer than occurred a decade ago. Many schemes that were in the pipeline have now stalled.

GVA has undertaken a survey of local authorities which found that around a third do not have any significant development planned (of 5,000 sq.m gross or more). Of those which do have plans in the pipeline, just over a quarter are progressing as originally planned. The rest have been delayed (c. 30%), temporarily halted (c.20%) permanently stalled (8%) or are still at the concept/master planning stage (c.13%).

While overall space requirements may be shrinking, the major multiples generally require fewer, larger shops in a limited number of large centres.

In many towns, the space that is readily available does not meet retailers’ requirements. Without new developments, or qualitative improvements to the existing stock, many locations will struggle to compete in the future.

The lack of viable town centre options will in turn create more pressure for retailers to develop their ‘clicks and mortar’ strategy on line and out of town.

There is a legacy of stalled schemes. Many have no prospect of delivery. Others need a radical rethink. In the current economic conditions, it is not feasible or appropriate to attempt to subsidise fundamentally unviable town centre development, or to unnecessarily curtail retailer’s space requirements. However, given the critical importance of new investment in our town centres, it is vital that existing and new opportunities are re-evaluated.

The public sector has a key role to play, translating the opportunity into reality, de-risking the planning process, considering viability/ deliverability, procurement options and site assembly.

However, there is much more that can and should be done where real opportunities still exist, given the political will and commitment. It is too early to write off our town centres as being in a ‘death spiral’, but for some that is a very real risk without urgent action.

:: Richard Newsome, principal planner, PDR, at the Newcastle office of GVA

THE last 12 months have seen un-paralled focus on the UK’s high streets thanks largely to the Government’s Mary Portas initiative.

And while the emphasis has been on bringing back ailing high streets to be more of the traditional focal point of our towns and cities by making them much more attractive for shoppers, there are the important investment issues that will take some time to resolve in the face of fallen prime Zone A rents.

In Newcastle the Zone A rent has fallen from a bullish £320 per sq ft in 2006 to today’s level of £250 and even that could be challenged by further declines if confidence does not return to the region’s shoppers. Investors, used to 25-year leases on an upwards only rent review basis, must be wringing their hands in despair.

Unpleasant as this is, prime locations could see opportunities for private investors to move in and also non-prime retailers able to deal at lower rents and on shorter leases so that they can move into empty property. In both the cases of the investor and retailer, they will bring business skills honed on making their businesses work.

The revival of shopping high streets is not just down to investors and retailers but to an all-encompassing strategy of making them accessible, with a broad range of offer as a result of local and national retailer presence and environmental attractiveness which all combine to increase dwell-time.

This in turn will bring life back to high streets and, consequently, increase demand for space and start to drive rents back up.

The NE1 Business Improvement District initiative in central Newcastle is to be applauded. The Alive After Five campaign, which removes car parking charges after 5pm, has transformed the performance of city centre retail against national trends.

Data issued by NE1 shows that since the launch, the value of Alive After Five hours have been estimated at £157m and have helped attract over 2 million extra visitors to Eldon Square alone after 5pm. The Alive After Five hours now account for 16.8% of the day’s footfall, with footfall on Northumberland Street up by 5.5% year on year in contrast to the national average downturn of -3%.

The initiative is unique in the UK due to the package of support that was devised to accompany the extended retail opening.

In addition to the extended retail opening hours, Alive After Five is supported by free car parking after 5pm Monday to Saturday in the seven council-owned multi-storeys – which provides thousands of free car parking spaces in the city, together with a dedicated, high profile marketing campaign and on-going offers and meal deals in bars and restaurants.

Now this is real action and the first positive, pro-active, steps to a better city centre, both better for retailers and investors.

:: Greg Davison is associate in investment at Knight Frank

THERE seems to be a general assumption, if you listen to Mary Portas and others like her, that high street retailing is dead and that every high street is full of empty properties. In my view, however, this is simply not true.

In the words of Conrad Hilton, it’s all about ‘location, location, location’, and not just in a micro sense ie good street, bad street etc but in a more macro sense ie good towns, bad towns.

If you take the North East, the more prosperous market towns like Morpeth, Hexham, Alnwick, Durham, Yarm, Northallerton are trading just fine, whilst the more secondary towns of Peterlee, Consett, South Shields and others are struggling considerably more.

In these locations the market is finding it difficult to give the financial incentives retailers currently require.

This is probably a reflection of the more affluent societies based around the market towns, whereas harder conditions are being experienced where communities are struggling in the current climate.

I think it is also a case, for example, that a lot of the market towns either have not been hit by out-of-town retailing, either because of planning issues or because their out town retailing is rather more settled and established.

Durham, for example, has major out-of-town retailing but it is in an established location.

It has two shopping centres and a certain cache relating to its historical significance.

Morpeth and Alnwick are the same.

Morpeth has no discernible out-of- town retailing, though you could say that Cramlington provides this, and consequently is trading reasonably well and Alnwick has very little.

There is also little pattern as to the high streets’ relationship to shopping centres.

Morpeth has a recently opened centre and is doing well.

Others have established ones but are struggling.

Recession in certain retail trades opens opportunities for others.

Convenience stores are back on the high street, Tesco, Co-op, Sainsbury.

Bookmakers seem to be opening up everywhere and, of course, coffee shops.

The same applies if you are looking at the bigger centres.

In prime locations in Newcastle the picture is not too bad.

Main road tertiary high streets show the same. Gosforth High Street is trading really quite well whilst Shields Road struggles – again a probable reflection of different social economic backgrounds.

:: Bill Lynn is a director of Storeys Edward Symmons in Newcastle

 
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