Repurposing shopping centres: Review and best practice guide
The LGA is eager to identify how it can assist councils to decide on whether to, how to or when to acquire its shopping centres, and therefore commissioned this study to identify best practice lessons that can be used to aid councils in their decision making and future involvement.
Shopping centres are often the key component for many town centres, they typically dominate the landscape in terms of size, location, facilities and offer. As a result of development trends over the second half of the last century, particularly the last quarter, many towns contained covered shopping centres playing host to the leading and biggest high street names.
Over the last 20 years there has been a steady and increasing trend in the demise of this once dominant form of town centre retailing. Wider economic, technology, social, and property trends have all combined to result in major change. In some instances, the significant decline in occupancy, collapse of once dominant names and even the collapse of landlords and property owners / developers. The term ‘repurposing’ has become synonymous with town centres and their recovery. This has resulted in an increasing ownership of shopping centres by councils, in part as their role as the ‘guardians of place’.
The LGA is eager to identify how it can assist councils to decide on whether to / how to / when to acquire its shopping centres, and therefore commissioned this study to identify best practice lessons that can be used to aid councils in their decision making and future involvement.
Background and context
Recent challenges faced by town centres
It’s fair to say that for some time now, since the early Nineties, when supermarkets started developing bigger superstores in out-of-town locations, that town and city centres have been under threat. This threat has increased over the years, being compounded by the development of out-of-town bulky goods retail parks in the early nineties, many of which evolved into shopping parks.
The arrival of large format (10,000 sqm. plus) stores with extensive non-food ranges further applied pressure on town centres through influencing shopper behaviours, by selling clothes, jewellery, bedding, garden equipment, TVs, fridges, small electrical items, DVDs, consoles and games and so on. In effect, mini and alternative town centres, with extensive free parking, extended opening and clean environments.
A further impact on many town centres has been the growth in out of town ‘fashion parks’ where former bulky goods stores have become general comparison goods stores.
In more recent years, the deep discounters such as TK Maxx, Wilko, B&M Bargains, and The Range all continue to draw shoppers away from town centres from stand-alone or out of town locations.
The rise of multi-channel online retailers and dedicated specialists attracts ever increasing expenditure that previously used to be spent in town centres.
On top of all of that, the pandemic literally closed town centres over several waves, and encouraged shoppers in their droves online, and the current war in Ukraine is forcing up energy costs and food costs, resulting in shoppers having less to spend overall.
It’s also fair to say that the town centres that have stood still or provide one dimensional shopping offers with basic experiences have suffered the most. The centres that have evolved or are evolving are those which have suffered less.
As a result of multiple impacts on town centres and in particular shopping centres, they have declined in quality, offer and appeal. Typically shopping centres accommodated multiple retailers, and many of these are now falling out of favour with consumers, resulting in the loss of many from town centres. The days of the ‘retail’ dominated town centre are numbered, if not already gone.
Change can be a good thing, when used as a catalyst to improve experiences and extend the appeal of centres.
Triggers for councils to get involved
As a result of reduced occupancy, higher cost of borrowing, limited opportunity to adapt (due to costs and planning restrictions) and many other reasons, many shopping centre owners have also struggled to adapt and evolve their centres. Some have even collapsed into administration themselves.
This has resulted in councils becoming more actively involved in the ownership, management and development of the centres in their towns. Sometimes through pro-active choice and sometimes through ‘needs must’ reasons.
The findings of this study show that the triggers for councils needing or choosing to get involved in the management / control / ownership of shopping centres and / or major retail units are many and varied. The challenge is that whilst many are obvious and visible, some are not!
Starting with the more visible indicators of decline and need there is no more obvious sign of an asset in peril than a large vacant store and / or centre. Particularly one that has been empty for some time and covered in graffiti and fly posting.
Other visible indicators of decline include declining standards of maintenance, lack of visible investment by occupying businesses, lack of promotional activity, reduced footfall numbers, businesses relocating to other parts of the town centre and so on.
The more challenging task is to identify when an asset is struggling but not visibly. This can only really be achieved through informal conversations with occupants and / or the centre management team, or through other retail stakeholders in the centre such as letting agents, other centre managers and perhaps the BID/place manager if there is one.
Formal conversations with the asset managers or owners may also highlight concerns but equally they may be guarded and reluctant to reveal a perilous financial position or outlook.
Other triggers to getting involved could be a stalled or emerging masterplan where the asset of concern is key to unlocking or delivering it, either through size, location, content or condition.
Involvement can be reactive or proactive, as well as needs driven or opportunistic. The key is to be aware, regularly and proactively monitor the situation, and have a plan already up one’s sleeve (more of this later) and therefore be ready to intervene when the situation calls for it.
The drop downs below provide a summary of the existing and established triggers for council involvement and subsequent investment in their local shopping centres. The triggers listed include the ‘obvious and visible’ referred to previously and those identified by contacts and councils during the research for the study. Those labelled with an asterisk are frequently mentioned triggers. The variety of drivers is very illuminating, although many involve ‘repurposing’.
high vacancy rates
departing tenants
stalled redevelopment
declining town centre
blighted town centre
poor unit configuration
lack of market interest
disinterested management
lack of promotion
high numbers of temporary units
for sale notices, to industry.
to facilitate delivery of master plan*
help achieve wider council policy and strategy*
opportunistic, low value*
improve management*
improve offer, mix and content
address negative impact on town centre
repurposing of units and centre
generate additional income streams
enable wider regeneration
conversion to non-retail, residential, workspace
take control of the situation
add public services to town centre
improve the markets
add cultural and leisure facilities
diversity of uses
enable transport hub redevelopment
different triggers for different centres/locations.
Examples of repurposing
The previous section focussed on examples of councils becoming actively involved or invested in failing or underperforming retail centres. It also started to identify indicative themes for the repurposing of shopping centres and units within them. It is clear however from a review of market activity, that there are many other examples of schemes or units that have been converted / repurposed by both existing landlords and council landlords.
Many examples of repurposing involve large units that have previously housed department or variety stores that have subsequently become vacant, or smaller shopping centres and even parts of centres. Many include ex-Debenhams department stores from when the chain went into administration a couple of years ago or are M&S variety stores where the business has either left a town centre for good or has moved to an out-of-town unit store on a retail park, just to mention two high profile brands.
Successful repurposing will be in line with local customer needs and adding reasons to use and visit the town centre. The study has identified over 25 repurposing uses; there will be many more emerging. Appendix III contains some of the examples identified in the activity search.
As can be seen in the dropdown below, the types of repurposing undertaken include a wide variety of retail and many more non-retail facilities.
food and beverage
galleries
council services
arts and culture
markets
enterprise/incubator space
job centres
wellbeing services
market halls
co-working desks
community
gyms and fitness
active leisure
hotels
residential
passive leisure, urban parks
commercial services
offices
health centres and services
NHS centres, alternative health
micro-brewery
artisan arcades/box park etc.
live/work space
meanwhile uses (all of the above)
museums
theatre/cinema
transport
education.
Key lessons and good practice checklist
Introduction
The purpose of the study is to provide a report that would help councils to make informed decisions about investing in their local shopping centre, to provide guidance on the factors to consider, examples of successful interventions, direction on the optimum approach and how to deliver success from a variety of start points.
The findings detailed above and, in the Appendices, provide a wealth of advice and examples of factors to consider and the various approaches that have been successful, as well as the variety of ‘success measures’ used.
In this section we draw the findings of the study into a series of conclusions that set out:
Best practice lessons learnt
Checklists / guides
A review of the six identified output areas:
Identify the economic, social, and environmental business case for acquiring all or part of a shopping centre.
Identify the Key Performance Indicators being used to establish the successes of acquisition / partnership.
Identify local policy approaches that have led to councils locating to or investing in the shopping centre.
Identify replicable plans and strategies for acquiring shopping centres or partnering with commercial owners to support the regeneration of shopping centres.
Quantify the economic, social, and environmental benefits now, and in the future, of council intervention in the repurposing of shopping centres.
Identify any policy gaps for the Government or others to consider.
Best practice lessons learnt
From the findings of the various research areas undertaken as part of the study, it is possible to draw out key conclusions for the study, in regards best practice lessons learnt. These are pointers and factors to consider when planning for future use of your shopping centre, the success of towns and places, and the role that retail centres and units can help to play in that.
Think about your town centre as a consumer would
Monitoring the performance of a town centre needs so much more insight than capturing footfall levels or vacancy rates. Whilst they are useful indicators for confirming usage patterns, or if a problem exists in part or all of the town centre, the data needs more context. The best way to think about the how towns are performing is to think about the extent to which the existing offer is satisfying the needs of local consumers, be they shoppers, residents, workers or visitors. It is important to remember that ‘offer’ includes far more than just traditional retail shop units. In the current climate of effective place management, the broader the ‘offer’, the more reasons to visit and use, the healthier the local economy will be.
Is the offer in tune in regards to market positioning? Does it match the needs of the majority of local consumers? Does the offer seem fresh, and / or are retailers and other town centre business operators motivated or investing in their units? Is the shopping centre owner actively promoting the centre or running events to drive footfall? Are new businesses opening? What are the obvious deficiencies or gaps in the offer? And so on.
If none of the above aspects are visibly present, it could suggest a town centre and its shopping centre that is losing its attraction and is out of sync with local customers, therefore one facing future jeopardy.
Do ask the difficult questions, even if your council is not actively invested or involved. A major part of your town centre should be of interest to you.
Asking the centre or portfolio manager about the ongoing and expected future performance of the shopping centre or even individual businesses will provide some insight and potentially comfort. They may or may not choose to be open with you, however the nature of their response will be of interest.
Asking other town centre stakeholders such as existing businesses, managing / letting agents and other property owners will also provide a range of performance information, albeit potentially anecdotal, but more likely to be truthful and insightful. If an asset is under peril, others are likely to know this, and will normally be happy to share it with a key town stakeholder such as a council.
Plan ahead, be ready to act, be thinking of how to improve your town centre
In the same way that authorities plan for large scale emergencies and disasters, it is prudent to plan for the alternative future of major retail schemes in your town centre. Not only to be ready to act should they fail, but also to be planning for the evolution of the town centre, particularly for centres that were built during the latter part of the last century. Typically, these were built to accommodate a type of town centre offer that appears to be increasingly out of favour with today’s consumer. This could include alternative options ranging from light touch management and intervention, through to outright control. Thinking about, even knowing in advance, what the optimum uses, mix, format and tenant make-up are, will enable your authority to step in quickly and decisively should the need occur. An important lesson is that the future repurposed centre is likely to be very different to the acquired centre, indeed simply replacing the offer with more of the same is unlikely to deliver success. The future offer almost needs to be different. Think widely about alternative content.
Having a pre-prepared plan that can be quickly communicated to existing businesses, stakeholders and the general public will enable expectations and potential concerns to be managed and controlled in order to buy more time for appropriate intervention.
The default assumption should be that the council will need to get involved at some point in the management / direction of your major retail assets and units.
Everything will take much longer than expected
Several authorities have reported / advised that it took much longer to see the benefit of investing in, or controlling shopping centres, in regards to either the consumer experience or in terms of financial benefit. As a rough measure, we would highlight that intervention and reinventions of assets is likely to take two to three times longer than initially expected, to deliver the hoped for results and benefits.
It has become abundantly clear to us over the course of this project, that turning round a failing shopping centre or re-inventing a failed large unit is not easy. By the time the asset is empty and gathering dust, detritus and graffiti, the task of bringing it back to life has just got even harder.
Far better to be informed and even better to have a plan ready to go before the asset gets to this stage.
Each stage of the process will take longer than anticipated; masterplanning, detailed planning, funding and delivery. The only aspect that can happen quicker is the initial purchase or acquisition.
Checklist and guides
Repurposing process checklist –A summary of the key stages. Within each there will be several detailed steps to go through, these will vary according to the needs and structures of the council.
Repurposing process checklist
Potential
Completed
Objective and research-based assessment of local need, define qualitative and quantitative opportunity, including identify potential gaps in the local market offer, setting the wider place vision
Assemble the appropriate internal project team, senior leader / public advocate and governance & reporting protocols
Secure initial funding for the development phase of project
Tender and procure specialist external support, masterplanning, property, strategy
Develop the masterplan / optimum scheme (size, scale, mix, format, content, building blocks layout, integration with future townscape and so on), engage with community and stakeholders, internal and external
Negotiate the best price (if buying existing asset), Compulsory Purchase Order (CPO), site assembly
Secure finance to fund acquisition, development and construction costs, develop cash flow plan
Implement meanwhile strategy / action plan to optimise income, reduce losses
Finalise development and implementation plan, programme and responsibilities
Communicate the plan (ongoing) to local stakeholders, community and businesses, provide realistic timescales
Deliver it (whilst being prepared to evolve and adapt the plan)
Define success measurement / monitoring criteria as well as exit strategy / triggers
Repurposing Process Checklist (alternative start point)
The previous table provides an overview of the key stages of the ideal process to considering the repurposing of your local shopping centre.
However, the study has shown that the ideal start point is not the one that many councils find themselves in. In which case there will be a number of steps to go through before getting to the ideal start point. These will include:
Speedy reaction to the crisis trigger point, leading to acquisition or control of the shopping centre
Meet existing onsite management team, review all operations
Ensure prompt continuation of trading for existing tenants
Quantitative performance KPIs, footfall, rents, yields, Return on Investment (ROI), occupancy, land values, asset value, asset growth
Visit and spend activity, reported by businesses
Additionality for the town, more accommodation, more culture, more office, more leisure, more employment / opportunities
Community benefits, social, wellbeing, health
Local authority income growth, direct and indirect, reduced losses from centre
Exit options, hold, maintain, part disposal, full disposal, retain and grow, community asset to name but a few
Wide range of future success measures, be prepared to adapt success measures at different points in the cycle
Sustainability improvements, net zero attainment
The dropdowns below summarise examples of council policy approaches that have led to intervention and ownership identified throughout the study.
We have also listed some of the reasons provided for not investing or being involved in ownership or management of the local centre.
help to achieve published policy goals
masterplan initiative
town centre investment, support HMG funding delivery/strategy
employment and job creation
achieve housing and new homes, brown field sites, planning policies
tourism and heritage/cultural policies
wellbeing
community policies
sustainability policies and achieving net zero targets.
not part of strategic plan
financial
borrowing constraints/financial controls
exit considerations
not remit of council
high price, cost, investment,
capacity of council, skills gap
negative output of risk assessment
conflict of interest.
The dropdown below succinctly identifies the range of economic, social and environmental factors that provide both the business case for investing and indeed the potential benefits of investing in the repurposing of the local shopping centre.
high vacancy rates (reduced)
departing tenants (reduced)
stalled redevelopment (started)
declining town centre (turned around)
blighted town centre (turned around)
poor unit configuration (redesigned)
lack of market interest (turned around)
disinterested management (turned around)
lack of promotion (kick started)
high numbers of temporary units (reduced)
for sale notices, to industry (reduced)
improve management*
to facilitate delivery of masterplan*
help achieve wider council policy and strategy*
opportunistic, low value*
improve offer, mix and content
address negative impact on town centre
repurposing of units and centre
generate additional income streams
enable wider regeneration
conversion to non-retail, residential, workspace
take control of the situation
enable transport hub revelopment
different triggers for different centres/locations
add public services to town centre
improve the markets
add cultural and leisure facilities
deliver diversity of uses.
Given the high number of councils that are already actively investing in and / or acquiring their local shopping centres for repurposing, it could be concluded that the existing policy environment is sufficiently broad to enable the ongoing acquisition and investment.
That said, there may be areas of policy that could be explored and developed to facilitate and improve the process, including:
obligation on councils to monitor performance of centres over a certain size / percentage of available town centre floor space
ease the ability to repurpose and introduce more diversity in town centres through planning
opportunities to access particular funding mechanisms with longer term repayment options to ease cost of investment
ability to recruit and develop required skill set and team structure, simplified procurement
clarity on role and responsibility of the council towards the major shopping centre in its town
land assembly and site assembly / CPO policies review.
This particular output area could form the content for a separate follow-on study.
Case studies
Nottingham City Council
Just before the Pandemic, Intu (majority owner) was working with Nottingham City Council (minority owner) to bring plans to refurbish, extend and reposition the Broadmarsh Shopping Centre. Unfortunately, as a result of the pressure from having to close during the Pandemic, Intu ran out of cash and entered receivership. As well as the shared plans that were in the public domain, the council had also been prudently working on a secret Plan B as a contingency. Following the collapse of Intu, the council bought the ownership of the scheme from the Official Receiver, to enable it to push forward with Plan B.
In its role as leading on the plans, the council assembled an advisory panel / steering committee of leading local and national regeneration experts and creative thinkers to bring forward bespoke and appropriate proposals for the new scheme. To further inform and revise the proposals, the council undertook the ‘Big Conversation’, an extensive consultation exercise with the general public and other key stakeholders.
The council is currently revising its plans in advance of a planning application, with the latest scheme proposals including new residential and hotel facilities, retail and leisure facilities, public park, tree lined public squares, skate park, outdoor cafes, re-routed major roads and a new library.
The scheme proposals include the retention of part of the former structural skeleton of the old Broadmarsh Centre. This has helped to reduce costs, reduce waste, improve carbon emissions and improve the sustainability of the full proposals. The Frame, as it is known, will provide the backdrop to a changing array of markets, artisan producers, events, concerts, entertainment, sporting events, leisure and adventure offers, as well as green spaces and parks.
It is aimed at bridging the gaps in communities, cultures and generations. It has been designed to enhance views of the castle, and the caves (literally hidden gems of the city).
The council are actively looking for funding from a variety of investors. It is accepted that the full development will take time to get it right. However, some elements will open sooner.
Key lessons include – have a plan, have a plan B, have a creative team, then have a detailed delivery team, be prepared to think differently, be prepared to adapt your plans, include the local community, be patient, keep people informed, deliver in stages.
Oldham Council
Oldham Council has acquired the Spindles Shopping Centre, to help bring forward major redevelopment proposals for the town centre.
The acquisition is part of the wider £280 million ‘Creating a Better Place’ initiative which is looking to improve the whole of the town centre experience, introducing new residential, workplace and a radically different town centre offer.
The exciting and innovative new plans include the repurposing of first floor retail space to office floorspace to accommodate council staff; relocation of the council’s archives into the shopping centre; a new cultural quarter; creation of new food court; new home for Tommyfield Market and new event space. The improvement plans are already underway.
The acquisition of The Spindles was identified as the catalyst for the wider plans. It has enabled the broader perspective and ambitions to be delivered.
Benefits would include a new town centre offer, more workers in the town centre, a new transport hub, travel and access for the town centre. The development will be adding multiple new attractions to the town centre; it is not simply a redevelopment of a shopping centre. It will consolidate the existing strengths and add new elements to the town centre.
The impact and benefit is expected to be felt by every resident in the borough. Success measures are wide and diverse, from improving occupancy levels, to increasing footfall, from adding new elements to developing a viable and sustainable town centre.
Key lessons include – have a plan, have a robust and detailed plan, have a broad view of future potential content, have a creative team, then have a detailed delivery team, be prepared to think differently, be prepared to adapt your plans, include the local community, have excellent leaders for the project, at all stages, be patient, keep people informed, deliver in stages.
Appendix 1
Introduction to The Retail Group and Project Team
The Retail Group has been developing growth strategies and action plans for ‘places’ (towns, market towns, regional centres, cities, districts and streets) for over 30 years. We have successfully developed strategies and action plans to rejuvenate, re-occupy and repurpose shopping centres, assets and vacant units / areas for many city and town centres.
We have been at the forefront of helping ‘places’ to become ‘multi-purpose’ in offer and use, expanding the variety of offers and experiences in towns and city centres, improving existing assets, providing a stronger ‘place’ to shop, enjoy, use, live and visit. Core to The Retail Group’s approach is that future growth and prosperity is intrinsically linked to the needs of consumers. Provide the right offer for residents, workers and visitors and they will visit and spend more, more often, thus ensuring the economic and social sustainability of individual locations.
Increasingly, the ‘right offer’ is far more than just shops. It includes catering, services, leisure, culture, arts, health, wellbeing, employment, and a host of non-commercial activities, from residential, health, public services to educational. The ‘right offer’ also extends to the wider experience factors; access, facilities, public realm and ease of use.
For property clients and councils, we offer objective and carefully researched strategies based on detailed awareness and analysis of national and local markets. We ensure that proposed developments and changes to places of all types and sizes, target and satisfy the future needs and aspirations of all local consumers, stakeholders and investors.
We have defined future town centre strategies for over 300 locations, covering all sizes and types, from market towns like Morpeth and Frome, to sub-regional towns like Ashford and Livingston, to regional destinations such as Birmingham and Bluewater. Our consumer-oriented methodology and approach also enables us to work on iconic locations like Wembley, Greenwich Peninsula and Spitalfields.
In the completion of this report, we have been assisted by project partners Make the Link and Citicentric.
Make the Link has experience of leading policy development at national, regional and local levels, including on retail led regeneration, place making and business investment.
Citicentric is a specialist property consultancy that provides town centre regeneration consultancy services, including property investment, development consultancy, land assembly, curating occupational strategies, leasing vacant property and compulsory purchase.
Appendix 2
Project overview
The following background points summarise the key factors driving the project, based on the brief issued by the client team.
Shopping centres are often the key component for many town centres, they typically dominate the landscape in terms of size, location, facilities and offer. As a result of development trends over the second half of the last century, particularly the last quarter, many towns contained covered shopping centres, playing host to the leading and biggest high street names. Typically, these were owned by institutional landlords with little or no involvement from the council.
Over the last 20 years there has been a steady and increasing trend in the demise of this once dominant form of town centre retailing. Wider economic, technology, social, and property trends have all combined to result in major change and in some instances, the significant decline in occupancy, collapse of once dominant names and even the collapse of landlords and property owners / developers. The term ‘repurposing’ has become synonymous with town centres and their recovery. This has resulted in an increasing ownership of shopping centres by councils, in part as their role as the ‘guardians of place’.
The LGA is eager to identify how it can assist councils to decide on how to, whether to acquire its shopping centres, and to identify best practice lessons that can be used to aid councils in their decision making and future involvement. The brief identified six areas for the study to consider, including:
Identify the economic, social, and environmental business case for acquiring all or part of a shopping centre.
Identify the Key Performance Indicators being used to establish the successes of and acquisition or partnership.
Identify local policy approaches that have led to councils locating or investing in the shopping centre.
Identify replicable plans and strategies for acquiring shopping centres or partnering with commercial owners to support the regeneration of shopping centres.
Quantify the economic, social, and environmental benefits now, and in the future, of council intervention in the repurposing of shopping centres.
Identify any policy gaps for the Government or others to consider.
This report showcases best practice and makes recommendations for councils on how best to intervene when shopping centres are unable to maintain footfall. This will be evidence based and supported by case studies, interviews and other evidence that is appropriate.
Project approach and methodology
The core workstreams of the study are summarised below:
Immersion – This included further detailed briefing on background and preferred outcomes. A key part of the immersion discussion and process was to commence the identification of stakeholders, particularly council contacts and the appropriate person / level of council officer to engage with. This resulted in the study focussing on senior officers, director level and leaders. Other stakeholders included property industry contacts.
Survey of contacts – The aim of this key research workstream was to canvas the experience of a cross section of councils, including those that had and had not invested in their local shopping centre. The project team identified a shortlist of 50 established contacts with councils to be included in the survey. These contacts complied with the brief’s requirements to include a geographic spread and also a variety in place size and type. A bespoke survey / questionnaire was created to include specific questions looking at current ownership / involvement, historic ownership, reasons for investing, current activity, future activity, issue, success and lessons learnt.
Evidence and activity review – The project team were able to access a variety of already published work, including online articles, sector specific reports within industry magazines, existing data base of activity and inhouse project files. This provided a wider context for the development of the stakeholder discussions and survey of contacts.
LGA Workshop – The workshop was originally planned to be completed after the completion of the report. However, it was completed prior to the conclusion of the study, so that the findings and lessons could be shared with councils sooner, and to include any further experiences from workshop attendees within the body of the research.
Outputs / Deliverables, Best Practice Lessons Learnt / Case Study References – The findings of all research workstreams have been combined to provide the required outputs and deliverables of the study. With the exception of the survey of contacts, the report does not detail individual area findings.
Appendix 3
Contact survey – Introduction
In order to collate first-hand experience of current and existing council activity in regard to the acquisition and repurposing of shopping centres, the study included a survey of existing contacts at councils.
The project team initially identified a long list of potential contacts to approach, all of which were existing clients or personal contacts of the project team members. From this the team identified a short list of 52 councils where we had an individual and direct contact with a senior officer, director or chief executive.
The team drafted a contact survey questionnaire to ascertain the level of historic ownership and / or interest in the local shopping centre (or centres) in the key towns in the borough. The questionnaire also covered a variety of topics, from reasons for additional investment, funding, future plans, success measures and acquisition rationale.
Each contact received an individual email introducing the survey, its objectives and the wider aims of the LGA study. Respondents were able to complete the survey online or as a printed document, whichever they preferred.
The survey achieved a good response from the initial distribution, with three questionnaires being returned through email, 11 completed in the initial online wave, and a further three respondents providing verbal feedback. Post the delivery of the workshop, we received another seven completed surveys, providing a data set of 24 responses, representing almost half of the initial distribution (note some respondents were outside of the initial distribution as they were workshop attendees). This represents a high response rate from such a survey format. Whilst the number and particularly the quality of information is strong, it is not sufficient for a quantitative analysis of the results.
Answers have been reported to all the survey questions where possible and informative, quoting the number of responses for any particular response option (many questions were multi-choice format), to demonstrate the propensity of the response options. Where the number of responses are provided, the total number for that question is also provided, as response levels varied for each question. A number of questions were open ended, for these we have summarised the comment and grouped them where possible.
The contact survey was completed on a confidential basis, and the report does not attribute individual responses to any of the questions.
However, we would like to thank officers from all of the councils for their time and input into the study.
The majority of councils (12/22) reported that they were ‘fully involved’ in the management of the shopping centre. Six are ‘actively consulted / engaged and four were passively involved or merely informed.
No councils were ‘not involved’.
Most councils do have a formal involvement (13/22).
Although 8/22 reported no formal involvement.
Of those that reported no formal involvement, the following reasons were identified as factors preventing investment / acquisition:
Not part of strategic plan (5/8)
Financial reasons (4/8)
Borrowing constraints, exit considerations, not council remit 1/8 each.
Additional comments included:
Inflated asking prices due to announced grant funding, economic conditions, capacity and risk assessment.
Respondents were able to provide multiple responses due to possible multiple centre ownership across the borough.
A full spectrum of ownership was reported:
Outright ownership dominated with 10 responses
Freeholder (no control) was second highest at six
Minority ownership / control (2)
Majority ownership / control (2).
Additional comments include:
Lease acquired following demise of centre owner. Own individual small properties, not the centre.
The table below shows the range of responses provided to this question:
Reasons for investment
Reasons for investment
Number of responses
Facilitate town centre masterplan
9
Achieve policy goals
5
Opportunity to acquire at low value
4
Need to improve management
3
Curate mix
3
Scheme causing negative impact on centre
3
Repurposing of large units
1
Emergency rescue
0
Additional comments included:
opportunity for income generation
part of regeneration scheme
differing reasons for each centre / town.
The most common form of funding was Public Works Loan Board (or Prupim Borrowing) with 11 responses.
‘From reserves’ achieved five responses, JV investment two responses and ‘Specific Grant’ one response.
Councils are clearly actively implementing change. The table below shows the range of responses provided to this question.
Planned or implemented changes
Planned/implemented changes
Number of responses
Repurposed units
13
Diversified mix
10
Provide meanwhile space
10
Improved integration to rest of town
10
Improved management
5
Additional comments included:
upgrade facilities, toilets and car parking
demolition to rebuild, in full or in part
commissioning third party consultants to deliver feasibility.
Aims and ambitions
Aims and ambitions
Number of responses
Improve appeal of town centre
14
Diversify uses
12
Facilitate wider town centre activity/investment
12
Increase occupancy
9
Repurpose elements
9
Support wider policy aims
8
Return on investment
5
Long term ownership
5
Reduce retail floor space
4
Sale when commercially viable
1
The respondents typically provided multiple responses; improving appeal of town centre, diversify uses, facilitate wider activity / investment lead the way. All being similar in direction. Interestingly, reducing retail floorspace is less of an ambition, but adapting uses clearly is.
Yes, according to 12 respondents
No according to one
A 12:1 success rate (according to those that have made the investment).
Unsurprisingly, a wide variety of responses provided, the most frequently mentioned included:
New occupiers (6)
Progress on development (5)
ROI (4)
‘Too early to tell’ and positive stakeholder reaction – 3 each
Increase footfall, sustainable uses, achieve council aims, public space – 2 each
Others mentioned once – diversification, homes, jobs, land value, meanwhile activity.
A varied mix of both quantitative and qualitative measures, no dominating measures of success.
Again, a wide range of responses, with no clear dominant lessons voiced by respondents, however many key learning points.
Flexibility (4)
Use external expertise / property expertise (2)
Have a clear rationale and / or strategic approach – 2 each
Construction costs have doubled (2)
Mentioned once – good controls, involve property owners, public engagement, ownership helps drive regeneration.
A limited number of responses, with no clear dominant lessons voiced by respondents, however a number of key learning points.
Three aspects mentioned twice:
Buy cheaper, have more jigsaw pieces in place (includes team), flexibility to suit market needs
Aspects mentioned once:
Improve procurement, streamline JV partner procurement, aim to achieve comprehensive development, achieve balance in control, unlikely to invest again.
Respondents provided a number of additional comments, some are similar to points already made. They are unprompted and clearly important for the council responding.
New thinking needed on future uses, opportunity to re-imagine centres beyond retail – two responses
Employ / work with good real estate professionals
Different approaches needed for different centres and places
Viability remains challenging
Negotiate hard to secure best value
New approach to procurement is needed
The non purchase decision of a centre has prompted the council to look hard it its role and opportunities to improve the rest of the town centre offer.
Summary
The contact survey has provided a wealth of information to use as part of the best practice guide element of the report. Key summary points include:
Circa 50 per cent of responding councils are ‘actively involved’ in their shopping centre. The remainder are passively involved.
Circa 50 per cent have some form of formal ownership, some being freeholders.
Ownership and involvement varies, more opportunity for involvement.
Reasons for investing are dominated by ‘Masterplan Delivery’.
Funding acquisition is typically through Public Works Loan Board.
Councils are actively changing the centres they own.
Aims and ambitions are focussed on improving the appeal of the town, the uses, activity and occupancy.
Council investment is viewed as successful. That said, success criteria is varied, over 15 variables identified. For some it is ‘too early to say’.
Lessons are varied and many – be flexible, have a plan or strategy, use external expertise, have a good team, engage with the public and other property owners, negotiate hard, construction costs are high and increasing. Procurement needs to improve.
Think widely, differently and creatively about future uses for the town centre.
Even a decision to not purchase can lead to a review of council aims, ambition, role and input to its town centres future sustainability.
Appendix 4
Examples of council intervention and ownership
2018: Trafford Council and private developer converted a failing market in 2018 into a successful food hall
Stage: Open and trading
2019: Test Valley Borough Council has bought Andover's Chantry Centre outright, in a deal worth £7.2million, in order to allow the council to ‘push forward’ with a project of creating a ‘Cultural Quarter’ on the former magistrates court site while also undertaking works on the Chantry Centre to provide a major redevelopment of Andover Town Centre.
Stage: Plans are underway
2015: Park Mall. Council bought the town centre scheme in 2015 and set up the Park Mall – Dynamic and Occupancy Steering Group to help manage and fill it.
Stage: Open and trading
2022: Bradford Council has bought the underused Kirkgate Shopping Centre in 2022 for £15.5m, clearing the path for a new urban village of 1,000 homes in the heart of the city. The move will enable the council to double the size of City Village, the sustainable neighbourhood that is a key step in regenerating the centre of Bradford. This will allow them to better address the shortage of top-quality, modern, sustainable housing in the historic city core.
Stage: Plans are underway
2018: Sefton Council bought the Bootle Strand Shopping Centre in 2018 for £32.5m to try and stem the decline in performance. Unfortunately, the scheme has reduced in value by 50% since.
Stage: Open and trading
2023: High Peak Borough Council has bought The Springs Shopping Centre in Buxton – the catalyst that will kick-start the redevelopment of the town centre and a key milestone in the Future High Streets project. The council's successful bid to the Future High Streets fund (FHS) saw the proposals awarded £6.6m – 69% of original bid. As a result, the council is topping up the total by investing a further £4.2m from its budgets to deliver improvements to the main commercial part of the town to complement and enhance the heritage and cultural offer which draws people to Buxton.
Stage: Plans are underway
2018: Council took over ownership of Whitefriars for £75m in 2018.
Stage: Open and trading
2019: Castle Point Borough Council acquired the Knightswick Shopping Centre in Canvey in 2019 for £11m.
Stage: Open and trading
2021: Chesterfield Borough Council has completed the purchase of the town’s Pavements Shopping Centre in 2021.
Stage: Open and trading
2023: Salford City Council has recently completed (2023) the purchase of Eccles Shopping Centre from current owners Columbia Threadneedle Properties for £4.15million. The long-term plan, which will see the council working alongside the community, is to create a vibrant town centre where people can eat, meet, and play. There will be a focus on building a place that celebrates its heritage whilst forging a new future for itself. A place where residents can choose to live and work as well as taking advantage of the town’s connectivity.
Stage: Plans underway
2022: The City Council has revealed it has completed a deal to acquire Exeter’s Guildhall shopping centre for £41.5m in 2022, so that it can best control the future use of the site if it takes ownership of it. The popular shopping centre will continue as a key retail and food and drink destination for Exeter, and the council will invest in improvements. In the longer term, the site could also include some residential housing alongside the retail units and restaurants, but purpose-build student accommodation has been ruled out by the council.
Stage: Open and trading
2023: Rushmoor Borough Council has acquired The Meads Shopping Centre in 2023 from St Modwen (itself recently acquired by Blackstone), as plans to redevelop the centre had stalled. The adjacent Princes Mead was acquired by Sovereign Homes in Oct 2022 for a 350 + unit residential redevelopment.
Stage: Plans underway
2018: Ex retail unit on High Street converted to job centre. Unit is part of St Georges Centre, bought by the council in 2018. Other units have been converted to F&B and leisure (incl. 2 gyms).
Stage: Open and trading
2022: Council has bought the Harvey Shopping Centre for £21m in 2022 to enable delivery of regeneration masterplan for town centre. Includes ex Bhs, cinema and multi-story car park.
Stage: Plans underway
2016: Mid Sussex Council bought the scheme for £23m in 2016 and have partially refurbished it.
Stage: Open and trading
2022: North Herts Council has bought the Churchgate Shopping Centre for £3.75m in 2022 to help secure future of town centre.
Stage: Plans underway
2022: Knowsley Council acquired the Prescot Shopping Centre for £1.3 million, as a key site to further the regeneration of the town. However, in contrast to the successful development of the wider town centre in recent years, the shopping centre has declined in terms of occupancy levels, footfall and overall physical condition. As a result, Knowsley Council has been in negotiation for some time to acquire the site.
Stage: Open and trading
2021: A council owned shopping centre is set to undergo a major redevelopment. St Tydfil’s Shopping Centre in Merthyr Tydfil with a mix of shops, workplaces and places to live. Plans also aim to improve market facilities, more public open spaces as well as more high quality food and drink venues and more independent businesses. The redevelopment will also include a revamp of the original bus station site at Glebeland, next to the shopping centre, which was demolished with the opening of the new Merthyr Tydfil Bus Station. The complex was bought by the council in December 2021 and as part of the authority’s 15-year town centre “masterplan” St Tydfil Shopping Centre will get a new look.
Stage: Open and trading
2018: Council spent £51 million on purchase of Shrewsbury's shopping centres in 2018. Now believed to have reduced in value considerably since.
Stage: Open and trading
2020: Southend-on-Sea Borough Council acquired the 333,538 sqft. Victoria Shopping Centre for £10m in 2020. The council plans to invest in the shopping centre, both with potential internal modifications and exterior improvements and there are also opportunities to include a range of public services in the centre, right at the heart of the town, to improve accessibility to services and to help to drive footfall through the centre.
Stage: Open and trading
2019: Councilhas demolished the Castlegate Shopping Centre and neighbouring Swallow Hotel to bring forward masterplan of town centre. Also includes Empire Cinema and 740 space car park.
Stage: Under construction
2021: Council bought the St Nicholas Centre for £26m in 2021, to attempt to stem the decline in vitality of the town centre.
Stage: Open and trading
2022: Council were looking to buy The Ridings for £7.5m but backed out at last minute.
Councillor Darren Byford, cabinet member for regeneration, said the council has had to deal with “financial realities” since February, when it was first decided to explore the possibility of buying The Ridings. Cllr Jeffery added: “We will be exploring different options to help deliver our ambitious Masterplan for Wakefield and we are continuing to work with external funding partners and agencies in an effort to support the future of the Ridings site.”
Stage: Decision reversed
2023: West Oxfordshire District Council, the freehold owners, have bought the buildings and assets of the shopping centre. The 4.9 acre site was built in 2007 and includes 21 lettable business units along with a 590-space multi-storey car park.
Stage: Plans underway
2022: Manchester City Council bought Wythenshawe Town Centre in 2022 as part of wider plans to transform the town centre. The 350,000 sqft. site includes the Asda, B&M, Iceland and Home Bargains and is to be bought from property company St Modwen.
The ambitious vision includes a new cultural hub, food hall and workspace – as well as helping to fund decarbonisation investment in the existing building, while creating hundreds of new jobs.
Stage: Plans underway
Appendix 5
Examples of repurposing
Macclesfield (2021): Ex Cinema, converted into food hall.
Manchester Corn Exchange (2016): Ex retail centre, now converted to dining destination.
Norwich (2022): Ex retail unit in Castle Quarter SC. Now food hall managed by MAM.
Thornaby (2019): Private investor has taken redundant office units on first floor and converted them to a high-tech games hub.
Wandsworth (2022): Ex Debenhams, now Gravity Entertainment Complex. Includes e-karts, golf, bowling, pool tables, restaurant and so on cocktail bar.
Southampton (2022): Ex Debenhams store is being demolished to facilitate the building of new houses.
Chatham (2022): Ex-Debenhams store is being converted to apartments.
Gloucester (2022): The ex-Debenhams store has been acquired by Gloucestershire University, to create new campus facilities, including teaching rooms, lecture hall, multi-faith room, library and student help zones.
Leamington Spa (2022): Ex M&S. Plans have been submitted to convert the store to office accommodation.
Southsea (2022): Ex JLP store. Plans to convert to cinema, leisure and food and beverage are underway. Also, the ex-Debenhams store is being converted to apartments.
Appendix 6
Councils and companies that registered for study webinar