The third and final event of our three-part series held in partnership with L&G discussed the future of leisure and amenities in cities.
The third event of our three-part series held in partnership with L&G on 25 November discussed the future of leisure and amenities in cities. With footfall slowly increasing but still at pre-Covid levels in many cities and large towns, the discussion focused on the consequences of the pandemic on local high streets, how retail has adapted and the role of culture in encouraging people back to city and town centres.
The panellists at the event were Denizer Ibrahim (Head of Retail and Futuring, LGIM Real Assets), Trish Willetts (Director, Coventry BID), Valentine Quinio (Analyst, Centre for Cities) and Andrew Carter (Chief Executive, Centre for Cities).
Cities’ agglomeration benefits, such as their scale and density, make them attractive for businesses to locate in, but they also create a market for amenities, drawing in customers and funnelling demand to entertainment venues, shops and restaurants. Valentine Quinio presented Centre for Cities’ High Streets Recovery Tracker which uses footfall and spend data to track the Covid-19 recovery across the UK’s 63 largest cities and towns. As of October, overall city centre footfall is at 75 per cent of pre-pandemic levels, but only 11 cities have bounced back to pre-Covid footfall levels.
Analysis of the recovery by days of the week shows that weekend activity has bounced back in 46 cities compared to only seven cities for weekday activity; some cities have even experienced higher weekend footfall than before the pandemic. Cities are therefore recovering quicker as places of leisure rather than work, and still play a clear role as a prime destination for shopping and amenities.
The pattern of night-time footfall is similar to that of weekend footfall, with people specifically coming into the centre for night-time activity; night-time recovery is at close to 85 per cent of pre-Covid levels, compared to under 70 per cent for the weekday recovery. These findings were echoed by Coventry BID who noted the strength of their night-time and weekend economy, driven by the city’s leisure and cultural provisions linked to the City of Culture programme.
Overall, big city centres, such as London and Manchester, which were doing well before the pandemic are yet to recover because of their continued absence of workers and tourists, whilst smaller city centres, such as Barnsley and Southend, have bounced back quicker. For big city centres to fully recover, this will require knowledge-based workers to come back to the office in greater numbers than seen so far.
According to LGIM, the pandemic has led to the end of “cookie cutter and homogenous high streets” and has seen big brands become more localised and responsive to shifts in customer demand. An example of this change in action is LGIM’s new high street in Kingland Crescent, Poole dedicated to independent, local businesses. Ten shops have been provided to creatives to be used as their storefronts for free; in the last six months, this has attracted footfall, dwell time and spend, offering a case study of what a future high street might look like.
Going forward, LGIM highlighted the additional “key ingredients” of successful future town centres will be: experiential shopping, spaces curated by landlords who will work with occupiers, digital trumping functional shopping and a change in the leasing of commercial space.
The changing role of the high street has also expedited a shift in the function of assets. A notable change has been in how retail floor space is allocated and used, with LGIM noting that retail has become the “true third space” as people look to consume and entertain more outside their homes. This is also driven by living space constraints; LGIM notes that by 2033, single person occupiers will make up 40 per cent of UK households.
The panel highlighted the broader need to think about town centres in the way that owners think of how to maximise the value of shopping centres. An example of this is through offering retail space at a below market price to attract investment to high streets. Coventry BID discussed how a three-floor retail store in the local West Orchards shopping centre was sold at a reduced price to a conglomerate of owners who are repurposing the space as a mixed-use amenity.
There was also a focus on moving shopping centres away from a 100 per cent retail offer to civic, more democratic places. Coventry’s IKEA store was permanently closed ahead of the first lockdown in March 2020, and there are ongoing discussions about converting it into an art collection space. LGIM noted this is becoming more common with a particular focus on health and wellbeing, where places with a retail offer now also provide nurseries, health surgeries, co-working spaces and educational spaces.
It is worth bearing in mind that customers’ desires need to be considered alongside what will drive a sustainable income for occupiers and investors, and this will mean curating a mixed space which ensures that the experience of the customer is relevant and agile. LGIM noted that, for example, a flexible partnership model with turnover deals for retail and leisure can deliver optionality and pioneer new owner and occupier partnerships.
Overall, both LGIM’s new Poole high street and the examples from Coventry BID signify a shift away from profit maximisation of individual retail spaces or sites in town centres over a shorter-term period, and instead towards maximising value by adopting a mixed use approach. This approach is a move away from the norm and has already being adopted by the likes of Argent at Kings Cross, who are taking a medium-term view by identifying the combination of uses (from university facilities to restaurants to co-working spaces) which are likely to deliver successful outcomes for occupiers and customers alike.
Cities are reclaiming their roles as prime destinations for leisure and culture, particularly where there is no online alternative. However, thriving high streets with plenty of amenities are symptoms, rather than causes, of a successful local economy. The focus should be on addressing the underlying issues such as ensuring city centres are attractive places for knowledge-based businesses which drive innovation and economic growth, and improving residents’ skills.
All the panellists agreed that the future of high streets is not the sole responsibility of policymakers. Occupiers and investors should engage with local authorities to come up with regeneration strategies.
The event was held in partnership with L&G.
As a result of Covid-19, urban life has dramatically changed. What does the future hold for cities and the people living and working in them?
A summary of observations from our second Future Of Cities event, which probed whether Covid-19 has changed demand for city living
Reflections from the first of our 'Future of Cities' events, in partnership with L&G
Explore the changing levels of activity within the high streets of Britain's cities and large towns from February 2020 to May 2022.
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