Owen Isherwood: New Golden Era for High Streets?
Adam Fenney, Director of Owen Isherwood reports on the surprising amount of activity in the retail market and beginning of a new era for High Streets.
Like every sector, retail (especially High Street retail) was hit hard during the pandemic. We saw record numbers of both large national occupiers and local independent businesses sadly closing their doors for the last time in 2020 and into 2021. The centre for Retail Research has published figures showing there were 54 ‘major’ retail failures in 2020, affecting 5,214 stores across the UK; numbers that have not been seen since the global banking crisis in 2008/2009. This does not include the 1,000’s of independent store owners, restaurants, pubs, and bars that have also fallen into administration paving the way to there being large numbers of empty shops on the High Street.
Here at Owen Isherwood, there were obviously concerns about how the retail market would bounce back from such a black swan event, but we have been pleasantly surprised about the amount of activity we have seen in the second half of 2021 going even more strongly into Q1 2022.
We have seen that there has been a shift from what we would consider traditional retail to more service focused operators. However, this should not come as a surprise as one thing the pandemic has shown is that it was an accelerant for trends already in motion well before it hit in March 2020. Flexible office space, with best-in-class amenities being a clear example of a trend that has been accelerated dramatically over the past 18 months.
With the obvious shift towards online retail over the past decade, the High Street was already starting to transform from parades of clothing stores to a mixture of professional service providers, restaurants, flexible office providers and leisure. This was further accelerated by the change in Use Classes in September 2020 replacing the old A1, A2, A3, B1 & D1 with Class E, no doubt, brought in by Central Government in response to the pressures of a declining traditional High Street in conjunction with the looming number of occupiers going into administration.
The unfortunate demise of many existing High Street occupiers has made way for several interesting new concepts. Over the past 12 months we have received enquiries from a vast array of start-ups including virtual reality experiences, escape rooms, indoor cricket/bar venues & even cat cafes! This type of interest is not necessarily good news for existing Landlords who have seen typical rents on the High Street reduce by up to 40% and the investment yields demanded for start-ups is a sacrifice that must be taken to fill up an empty unit. However, we are seeing the beginning of a new era for our High Streets, where people can come to work, live & play.
Since Owen Isherwood formed in April 2021 following the merger of Owen Shipp and Wadham & Isherwood, we have successfully let 55 retail units across the whole of Surrey and Hampshire. We also currently have 36 units under offer with only 24 units still on the market. New enquiries from applicants have been at their highest level for the first time in many years.
We are by no means saying that we are entering a new golden era of High Street retail previously seen in the 80’s & 90’s but we are a lot more optimistic than we were 18 months ago and the future looks interesting to say the very least.
