The future of commercial property in the post-Covid world
By Zvi Noé (pictured), founding partner of Capreon, Noé Group – There’s no denying that many trends rapidly accelerated over the course of the pandemic. This is nothing new. With Covid-19 restrictions forcing people to stay at home, there was an absolute necessity to use technology for everyday tasks. The result was a fundamental shift in the way people work and shop, thus having wide repercussions for the commercial property industry.
The normal hustle and bustle of our streets have been replaced by images of desolate buildings and empty shops across the country. Such scenes have fuelled the debate on the direction of both work and retail. The conversation has only become more important, especially following 19 July (better known as “Freedom Day”) that saw the end to Covid-19 restrictions and where we face the new realities of a post-lockdown life.
Although Covid-19 has caused a seismic shift for the industry, it cannot be ignored that the trends that it cemented were already well under way.
With regard to the workplace, there had already been a growing trend towards more flexible working, with companies beginning to offer their employees the chance to work from home at the end of the week, as well as working more flexible hours. However, this was still largely a minority and not expected across the wider workforce.
However, after being forced to work from home for such a substantial amount of time, many are now reluctant to go back to the “traditional” office working environment and routine. This is because like with many things, this pandemic has forced us to confront processes that were not working: our lifestyles have completely evolved, our workstyles have evolved and so too must the concept of the office evolve.
New ways of working require new solutions, flexible workspaces for limited capacity teams now require spaces in which they can work in a very different and safe manner to that of only 18 months ago. Furthermore, people are encouraged to move away from city centres, where they can work in more spacious and green areas, yet are still able to connect with their companies at the click of a button, or simply commute a few times a week for in-person meetings.
Similarly, the pandemic has caused online shopping to become fully entrenched in consumer habits – a process which was already beginning to take place prior to the restrictions. Particularly over the past two or three years, retail space has been in steady decline, with online shopping offering both a quicker and often more convenient solution for consumers. The pandemic has only consolidated this decline, as illustrated by the closure of a number of iconic British brands, including Topshop and Clarks.
In a similar vein, department stores are no longer the reliable sources of revenue for landlords, with their tiredness and incapability to relate to the changing consumer market, meaning that they fail to appeal to the modern shopper. This has been highlighted by the collapse of Debenhams, decline of House of Fraser and the recent news that John Lewis and Waitrose plan to cut around 1,000 management roles in stores.
So, what does this all mean for the future of retail?
As someone who has worked all his life in the commercial property space and whose portfolio includes a number of UK shopping centres, I see this as an opportunity for change, an opportunity for innovative thinking, an opportunity for growth in new ways. One must never dwell on the past. It’s important to always be looking forward and adapting to new trends.
Although the traditional patterns of both shopping and working have declined, there is a variety of ways in which the commercial space can and will readapt to reflect the new ways in which we live our lives.
The prime location and space of shopping centres provides a plethora of opportunities in which it can be repurposed.
Firstly, their prime location within the hub of towns and city centres gives significant opportunity for residential space, for instance. The City of London recently announced plans to rejuvenate the financial district through the repurposing of vacant offices as housing. This is also true for other cities across the UK as well as other counties around the globe. I see an increase in mixed-use residential/commercial buildings that combines the best elements of the two. The ideal location provides a new opportunity for those to live in central locations, which may not have been both previously available or attainable to them. Furthermore, such a use of the space will be effective in again bringing more people into the area, who will then require readily available leisure and retail space close to them, and will therefore be significant in reinvigorating the area.
Furthermore, another clear direction is towards increasing the leisure space. Such intentions have already been made clear by a number of noteworthy locations, in particular The Bluewater Shopping Centre in Kent, who revealed earlier this year that it would install a zip wire in order to attract more visitors to the location.
Overall, it is evident that the commercial retail space will never reflect the patterns of the pre-Covid world. Although we can never be certain of how the industry will next shift, it is clear it will have to become far more proactive and innovative in its use in order to reflect the rapidly changing times.
This is an exciting opportunity for change and growth. We must embrace it in all its glory in order to survive.