If we build it, will they come? – Estates Gazette, Spring 2018

Philip Lunn argues for the future of mega-shopping centres in Estates Gazette, Spring 2018.

 

Retail development is always a risk, but with pressure from online sales and declining high streets, is there still a future for mega-shopping centres? It depends who you ask…

 

Philip Lunn, Managing Director, Lateral Property Group – developer of the 600,000 sq ft shopping centre in Yorkshire

Shopping satisfies one of the most basic human needs: physical and social interaction. It is therefore a fascinating time to be a retail developer with huge ongoing structural changes in the retail market. Many commentators have tried to distill this change into a battle between online and physical. But this ignores how shopping works at an emotional level. It also fails to address two key issues: changes in consumer demand and the polarisation of retail destinations.

We admire California-based developer Caruso Affiliates, which owns and operates a number of the most successful retail destinations in the US. In 2014, chief executive Rick Caruso said: “We are part of a rebirth of bricks and mortar retail. It’s easy to get distracted by the relentless conversation of the internet versus bricks and mortar, but now more than ever what we need to do is focus on what has always been and what will always be essential to our customer – creating an experience that is magical and creating an experience that is memorable”.

Those words resonated with us and we believe they contain the key ingredients of how to remain relevant.

 

For years, the shopping centre model was simple: Inward looking, where the retail stores ruled, dominated by the traditional anchor department store, often with an enormous but now oversized foodstore. Centres were surrounded by parking, with little public realm or greenery and functional energy-inneficient, climate-controlled pedestrian malls with little sense of relationship to the communities around them.

For physical retail to thrive and survive, there has to be an acknowledgement that both shoppers and brands need more than bland boxes. The retail destination of tomorrow won’t just be built around the retail transaction. Instead, they will be mixed-use destinations for all generations that deliver discovery, experimentation, education and entertainment. We must acknowledge that we are no longer in the property business, we are in the hospitality business.

The crown estate launched Rushden Lakes in 2017. This was a major step forward, delivering a “day out” experience by mixing a strong retail and leisure offer with great public realm, and unique all-seasons leisure experiences within lakes and parkland. Retailers tell us it is trading exceptionally well.

We have heard people say we are brave with Axiom-Yorkshire, which is the largest out-of-town retail and leisure development in the UK since Bluewater.

We do not believe it is a question of bravery, we believe it is about having a clear vision of the future of retail.

 

We have the space and flexibility to draw from the best retail and leisure innovation. We also have 6.8m people – more than 10% of the UK’s population – within an hour’s drive. We have one of only six snow domes in the UK directly adjacent, which is Yorkshire’s most visited leisure attraction. More importantly, we are designing an experience that will deliver magical and memorable experiences within our 106-acre estate through four core values: convenience, experience, excitement and delight.

The master of magical and memorable experiences is surely Walt Disney. If Disney developed a shopping destination today what would it be like? I’d like to think his vision would be something like Axiom, delivering memorable and magical moments.