Council signals confidence in High Street with £47.6m shopping centre acquisition
The pressure is on retail but the high street is still seen as vitally important to the economic fortunes of towns and cities across the North West.
That was highlighted by Blackpool Council’s move earlier this month to buy the resort’s Houndshill Shopping Centre.
The local authority decided to step in following the appointment of receivers who took over the running of the centre a few days earlier.
It agreed to purchase the centre for £47.6m – less than half the price originally paid by its previous owner BCC Eiffel.
The council, which said it had been in in discussions for some time regarding the future of Houndshill with BCC and its funders, says its acquisition is aimed at catalysing the regeneration of the town centre.
With more than 60 outlets, including Debenham’s department store, Houndshill is the largest shopping centre on the Fylde coast and sits on a key location in the heart of Blackpool’s town centre.
As part of the purchase, the council will also take ownership of a 770-space multi-storey car park.
As well as securing the future of the centre, Blackpool Council says its move will “potentially facilitate investment” in the further development of Houndshill with restaurants and a cinema.
A council spokesman says: “This is a hugely positive move for the town that will give us direct control over the Fylde Coast’s major retail centre.
“This acquisition will deliver a significant financial return to the council but, more importantly it will allow us to invest in a shopping centre that is fundamentally important to Blackpool’s future.
“Moving the centre into council ownership will provide significant benefits to our town and our residents.
“At the same time, we have the potential to unlock up to £50m of investment in the town through the Future High Streets and Towns Funds, which will undoubtedly give further momentum to the regeneration of the town centre.”
The purchase of the centre was approved in principle by the council’s executive during the summer, together with two adjacent shop units on Victoria Street which form part of the centre, but are under separate ownership.
Funding for the acquisition will be secured through Prudential Borrowing powers. The management company that operated the centre on behalf of the previous owners is expected to remain in place for an interim period until the council has determined more permanent arrangements.
The council spokesman adds: “The centre trades well with high levels of occupancy and the income streams are strong.
“However, the company that owned it was clearly not in a position to make serious investment and that could ultimately have resulted in a decline in the centre which would not be good for Blackpool.
“All of the expert advice we have been given says that this is a great investment for the council.”
Edward Ziff believes the UK’s retail sector is in the midst of a revolution with the shockwaves being felt in high streets across the country.
The chairman and chief executive of property investment and development company Town Centre Securities (TCS) adds: “Britain, a nation of shopkeepers, is suddenly not such a nation of shopkeepers anymore.”
He was speaking on the day that it was announced that Mothercare is to close all of its 79 UK stores as well as its online business. Latest figures reveal that retailers have axed 85,000 jobs in the past year.
Ziff, whose company has properties in Manchester and Blackpool as well as The Merrion Centre in Leeds, describes the current UK retail landscape as “pretty horrid”.
However, he points out that the situation being experienced here is not being replicated in other countries, highlighting Mothercare’s continued trading success overseas.
Looking at the UK’s special set of circumstances, Ziff also talks about an “overdevelopment” of shopping centres in our towns and cities going back to the 1990s.
Looking at the wider picture, Ziff says: “Top end retail seems to be trading very well.” High volume and value retailers are also less affected by retail’s woes though it is “still a very competitive space,” he adds.
Sue Richardson, partner and UK retail director for the North at KPMG, says retailers are working hard to look at different ways they can use their bricks and mortar shop spaces.
That includes introducing ‘click and collect’ services for different retailers, gaining rental from it and also “giving people another reason to come into their shop.”
She adds: “Also, the idea of a shop as a showroom is becoming increasingly prevalent.
“Ten or 15 years ago a shop’s success was pretty much measured by its sales. What we are now seeing is that the shop has a role in a marketing sense, reinforcing that brand in that area.”
Richardson believes a “collaborative approach” is needed to meet the challenges the high street faces.
“Landlords need to put in investment and acknowledge that its part of their role to attract footfall into centres, the retailers have their role to play as do local authorities.
“There’s no point landlords and retailers putting in lots of effort to attract people in, if the local authority is charging astronomical amounts for car parking or you can’t get to the centre by bus.”
Richardson points to predictions that there will be fewer shopping centres moving forward and they will probably be in our bigger conurbations, with smaller towns seeing new mixed uses for their high street properties.