The second of the Power to Change High Streets webinar series on 14th October investigated the issue of landownership as one of the principal levers of control for our town centres.
As Power to Change’s Take Back the High Street report demonstrated in 2019 landownership is an important part of the debate about how communities can be empowered to have more of a say in how their high streets develop.
The webinar’s jumping-off point was the data that was collected to underpin Take Back the High Street, with a presentation from James Child, Head of Retail and Industrial Research at EG. The data showed pre-Covid that real estate companies own 1 in four empty shops in the UK, with overseas investors owning 1 in five vacant units. Vacancy is an important barometer to the health of the industry, and the rise is increasing in the current landscape.
But there are also success stories which show that town centres continue to be important to people, that high streets need to adapt to new patterns of demand, and avoid the shopping monoculture. Cllr Asima Shaikh, high streets portfolio holder at Islington showed how the concerted exercise of influence is important in creating such successes and argues that local authorities have a significant lever in the planning system’s Section 106 contributions. This allows the Council to intervene in the property market and provide affordable space for new businesses.
In Finsbury Park, the affordable workspace programme has been developed to provide free start up space for BAME businesses and help shape the town centre with ground floor retail. This approach restocks town centres with activity from the surrounding community, creating social value through sustainable employment opportunities. High Streets are not just commercial centres, argues Shaikh, they are social centres too. Local Authorities must up the engagement game if town centres are to meet the needs of their communities.
Matt Soffair at Legal and General provided important context on the institutional investment process, with an opening statement focusing on how high street property is financed. Very often retail units are owned ultimately by our pension funds, but L&G remain responsible, whatever the source of funding, for ensuring those investments are long term and secure.
This has to some extend led to the homogenisation of high streets and the ‘clone town’ effect, where retail property is let to chains which have the most secure prospects. Some investment firms are calling for an internal cultural shift from high street caretaker to high street editor, and arguing that taking a more active role in the curation of high streets will help ensure the long-term security of the investments they are responsible for.
This also involves engagement with the community to better connect local supply and demand, with a good mix of workspace and non-retail, and with the explicit intention of achieving social value as well as profit.
Mark Robinson is Chair of the High Streets Task Force, which will support places develop local capacity town centres, including with 150 high streets experts. Ellandi, Robinson’s investment company also controls over £1bn in retail in the UK. He calls for an end to the ‘demonisation’ of landlords, suggesting that investment in high streets will require public and private funding, from national and international bodies to achieve the levelling up agenda that is at the heart of the government’s town centres policy agenda.
Robinson believes that the statement of intent from the Government is clear, with over £3bn in the Towns Fund and Future High Streets Fund, and he now works to ensure that this money is invested in the most impactful way. But the challenge, he argues, is a trillion pound one, akin according to Sir Bob Kerslake, to the reunification of Germany. This challenge requires a pro-investment landscape.
The pandemic has short-circuited the slow death that was being suffered on many of Britain’s high streets and shopping centres. Dramatic change is now more likely given the magnitude of the problem. Structural change in the reform of rates and insolvency law, new leasing structures, and the involvement of organisations like Power to Change in the agenda.
Better collaboration between private owners and the community is essential to move the dial on this debate and the structures that make dialogue possible are usually confined to the planning system, which does not invite broader debate to develop local vision.
Where more general consultation exercises are run, voiceless people who have to use places can be ignored, and those that don’t have to use places are unreachable. For Robinson, a ‘middle class sensibility’ clouds the process, and risks a repetition of the clone town problem, where every place gets a food hall on the assumption of those running the process believing that this is what everyone wants. This is not how communities are ‘levelled up’. A bottom-up, grass roots approach is needed, in which communities drive forward the debate on what high streets should be for.
For Shaikh, this responsibility also extends to the public realm, another lever which the council can use to ensure that people feel welcome in the town centre. As places of social connection, markets, public art, open space and policies around car use can develop places in such a way as to discourage social isolation. In addition, the link between community development and economic development needs to be more firmly established.
Places should be ‘purpose driven’ and should be developed according to a vision. The conversation must start with ‘why’ rather than ‘what’, and communities, businesses, landlords and local authorities should be supported with local governance mechanisms which empower people to lead these conversations. L&G are pioneering this ‘local leadership’ approach, recognising that they cannot design a place that meets the needs of its community from an office in London.
There is a commonality of interests in high streets, where often the greatest driver of footfall is a community use: a school, or a hospital. Landowners are beginning to understand this and it points the way to a future in which a much wider range of activity will occur in town centres. Change is happening more rapidly than it has been due to the pandemic, and those that want a return to the status quo will find this difficult. A practical change which reflects this is the register of beneficial owners, as recommended in the MHCLG Select Committee Report in 2019, and which Power to Change will press in the policy asks which come from this series.