At a panel debate on Retail 2020 during the BCSC conference in Manchester on 20th September, Jones Lang LaSalle and FSP, there were some stark warnings given for landlords of secondary commercial retail property.

The panel, which was chaired by Guy Grainger (Head of UK Retail at Jones Lang LaSalle), included Jeremy Collins (Head of Retail Development, John Lewis Partnership Plc), Tim Danaher (Editor, Retail Week), Andrew Jones (CEO, Metric Property), and Geoff Nicholson (Managing Director, FSP).

Guy Grainger said: “Over the next ten years, the whole global retail landscape looks set to experience a period of continued change due to changing customer habits and needs.”

Debating some of the biggest challenges facing the UK Retail market today from the impact of on-line and ‘e-tailing’, polarisation and prime versus secondary space to obsolescent space, key conclusions from the panel included:

Up to 30% of UK retail space could be obsolescent by 2020 due to advances in mobile technology.
A truly multi-channel retail market will emerge with the proportion of sales expected to go online by 2020 to increase from just under 10% to in excess of 20%.
‘Click and Collect’ stores for multichannel and online operators are set for rapid expansion, particularly in out of town locations due to proximity of main artery roads and car parking.
Retailers should look to maximise the ‘halo’ effect of customers picking up online orders with additional purchases in store; John Lewis estimates that click and collect spend translates into over 30% additional shop sales.
The most challenged sectors affected by online shopping such as music, books, software will downsize their property portfolios significantly.
Just 25 retail locations could emerge to cover 75% of the population, with supermarkets share of non-food retail doubling by 2020.

Grainger concluded: “It is time for the landlords of secondary stock to recognize that before regeneration can take place, the true value of assets with impending lease expiries needs to be re-based.