ABSTRACT
The retailing industry in the UK is experiencing unprecedented structural change. The impact on retailers has often dominated headlines, along with the impacts on local services and economies, but with little attention given to the implications for property owners and practitioners. Exploring and understanding the responsiveness of landlords, and their behaviours, is essential to understanding the adaptiveness of a retailing system. This study employs semi-structured interviews to examine the short- and long-term changes in the retail market and the actions of landlords in response. The findings span the period prior to and during the first year of the Covid-19 pandemic in 2020, and reveal that fundamental changes have occurred to establish tenant covenant norms and the traditional retail leasing model. The paper explores these changes, including a shift in tenant risk, reposition of the leasing model in favour of tenants, generally, and greater application of turnover rents. The pressing challenge for current valuation practitioners, therefore, is to incorporate these fundamental changes within the market into the pricing of retail assets. Significant progress in this area to date, as explored in the paper, has been limited although greater application of discounted cashflow techniques is set to be encouraged by the RICS.
ABSTRACT
Since the 1990s the UK's city centre high streets have been losing market share to out-of-town shopping and e-retailing. The shocks of the Global Financial Crisis and COVID-19 have hastened this and precipitated widespread store closures. The experience economy is increasingly promoted as a means to avert the ‘death of the high street', and this prompts our study of its evolution. An exploration of the literature reveals the experience economy to be an interconnected phenomenon focused on the creation of a memorable event that elicits a sensory response via multi-dimensional innovation and design. Using this to guide our empirical work, we undertake a comparative mixed method longitudinal case study of five UK city centres. We initially chart the changing manifestations of experience uses before analysing supporting interviews and observations that reveal three interconnected layers of the experience economy: in-store commercial experiences;leisure and entertainment-orientated adaptations to shopping centres and department stores;and the wider regeneration of the public realm. Implications for city centre management are discussed. (English) [ FROM AUTHOR]
ABSTRACT
The retailing industry in the UK is experiencing unprecedented structural change. The impact on retailers has often dominated headlines, along with the impacts on local services and economies, but with little attention given to the implications for property owners and practitioners. Exploring and understanding the responsiveness of landlords, and their behaviours, is essential to understanding the adaptiveness of a retailing system. This study employs semistructured interviews to examine the short- and long-term changes in the retail market and the actions of landlords in response. The findings span the period prior to and during the first year of the Covid-19 pandemic in 2020, and reveal that fundamental changes have occurred to establish tenant covenant norms and the traditional retail leasing model. The paper explores these changes, including a shift in tenant risk, reposition of the leasing model in favour of tenants, generally, and greater application of turnover rents. The pressing challenge for current valuation practitioners, therefore, is to incorporate these fundamental changes within the market into the pricing of retail assets. Significant progress in this area to date, as explored in the paper, has been limited although greater application of discounted cashflow techniques is set to be encouraged by the RICS.