THE RECENT purchase of much of the retail property along London’s Queensway by Meyer Bergman and a Brunei family was a keynote deal. As all successful retail property investors know: control the mix of shops, and you control the fortunes of the area. Control the Queensway mix and you can restore a down-at-heel shopping offer into something really special. That is exactly what Meyer Bergman will do.
London shopping is highly unusual in this respect. A very large chunk of the West End is owned by landed or commercial estates. It is the mix control exerted by these estates that has propelled London to number one in the global shopping stakes, even ahead of New York. The mix is everything.
There is a fundamental message here for many failing high streets in the UK. A lot of high streets have nothing intrinsically wrong with them. Mix problems are, however, inevitable when there is a plethora of different shop owners. Multi-ownership leads to a letting free-for-all. In the absence of mix control, there is nothing to sustain attraction. Mixes are not self-sustaining: they need continuous work. But that is not the only problem.
High streets have had a hard time for decades. The more modern managed shop space we have added (mostly with free parking), the more shopping centres, retail parks, superstores and outlet centres we have built, the more chain operators have migrated from small shops in small unmanaged high streets to larger, higher productivity, modern spaces serving bigger markets.
This long run migration has left a trail of redundant, small-scale high street shopping in its wake. There is no magic planning wand that can be waved to render unviable shop property productive. Short of subsidy, Canute-like attempts by central or local government to sustain obsolete high streets is as doomed to failure today as it was 40 years ago.
But a lot of the recent high street attrition is not due to obsolescence: it is self-inflicted. On the one hand, mixes have been undermined by multi-ownership; meanwhile, the quality of the shopping experience has been further eroded by lack of investment in the parking and access infrastructure needed to serve high street shopping. Things have been made a lot worse by the widespread abuse of parking controls by local authorities to raise revenue – including predatory fining for petty traffic regulation infractions.
Rationing parking to generate revenue is pernicious from the shopping perspective because it alienates shoppers, undermining high street prosperity. The milking of town centre visitors to generate parking revenue is like a hotel owner charging guests to use the lifts or stairs to get to their rooms. Parking is just part of the access arrangements, not a business goal in its own right (the reason why it is free at most large modern centres).
In short, everything comes back to ownership. Without single ownership there is no hope of mix control. And without mix control, and control over accessibility, it is all but impossible to reverse high street decline.
Mark Teale is head of retail research at CBRE, and a member of the KPMG-Ipsos Retail Think Tank.