Retail’s reaction to the pandemic is well documented. The UK retail market has faced unprecedented challenges, leading to an oversupply of retail space, and shifting dynamics on high streets across the country. However, within these challenges are opportunities for savvy investors who can think creatively and adapt to changing market conditions.
Post-pandemic, the UK retail market still finds itself in a state of flux, characterised by an imbalance between supply and demand. With retailers and banks rationalising their portfolios, many high streets are grappling with vacant storefronts and declining footfall. Shorter lease lengths and falling rents reflect the shift towards a tenant’s market, while changing consumer behaviours and the rise of e-commerce continue to reshape retail dynamics. Secondary shopping centres are lying half empty, being sold at ridiculously high yields, but still too expensive to justify wholescale demolition in many cases.
There’s a pressing need for innovative solutions to revitalise high streets and unlock the latent potential of retail properties. The UK Government is introducing an increasing array of permitted development rights (PD rights) in England, which are welcome and can create game-changing strategies, but many SME investors think that the only solution is simply to convert to residential. There are other ways high street units can be repurposed, and even brought back to life again. In any event, multiple exits when assessing commercial deals is the main cornerstone of any purchase – it’s always important to make sure that you have alternative plans to cover all eventualities.
Strategies for Repurposing Retail:
1. Changing Use Within Class E:
The introduction of Class E has presented an amazing opportunity to convert commercial buildings into a huge range of alternative uses without the need for planning permission. This presents an opportunity to breathe new life into vacant properties. Class E uses include retail shops; financial and professional services; restaurants and cafes; offices; research and development; light Industrial with activities (near residential); clinics, health centres, and creches; gyms and indoor recreation; indoor play centres; art galleries etc.
