Could Offices Be The Saviours Of UK Shopping Centres?
Towards the end of last year, the BBC reported depressing stats which appeared to show the sharp demise of shopping centres across the whole of the UK.
In what has been described by some as a ‘retail apocalypse’, the article found that around 200 shopping centres around the United Kingdom are in real danger of falling into administration.
But new reports from across the pond in America are suggesting a possible solution to the crisis...
Could office tenants fill the vacuum which is being left by retailers at shopping centres across England, Scotland and Wales?
What’s The Problem For Shopping Centres In The UK?
The huge problem for shopping centres over here is that the UK has seen a faster rise in online shopping than almost any other retail market on the planet.
Where some companies like Amazon and Ebay have gained ground and become the real winners of the retail evolution race, more traditional high street names like BHS and Toys R Us have fallen by the wayside.
When famous retailers such as those pull out of shopping centres due to lack of demand from shoppers, it has a knock on effect leaving other retail tenants struggling to attract enough people to buy their products too.
Summing up the problem, Nelson Blackley, a Senior Research Associate at the National Retail Research Knowledge Exchange Centre, said: “If the major anchor store moves out, that has a halo effect on other stores in that centre. It's a downward spiral and you can't fill shopping centres with nail bars and vape shops.”
“It's a trend that's moving very quickly. You don't necessarily want to be in the business of owning shopping centres at the moment. People are suggesting a number of leading national retailers are on the edge and may close and that would bring shopping centres down with them.”
“The collapse of BHS, two years ago, left empty units in around 200 shopping centres and more than half of those large, empty units have not yet been filled,” added Mr Blackley, ominously.
Could Offices Come To The Rescue?
So, what could be done to save those large, empty units from bringing hundreds of shopping centres to the brink of collapse?
Well, from over in the United States where a worryingly similar scenario appeared a while back, there are reports emerging of companies filling empty units at shopping malls across the country with brand new office space.
In order to survive, mall developers in the US have diversified in order to attract tenants other than retailers.
Recently, the struggling Westside Pavilion mall in Los Angeles, announced that it was ‘repurposing’ itself into a $410 million office complex for none-other than Google.
The story seems to be replicating at other malls in the US with co-working firms in particular looking to fill redundant retail space with brand new office facilities.
Could a similar solution come to the rescue for shopping centres over here in the UK?
Watch this space...