Future of Town Centres
Nick Sewell, Director, NewRiver Retail
Paul Wright, Director, NewRiver Retail
Place North West Reta...
Overview
•
•
•

An Introduction to NewRiver Retail
Death of the High Street?
The Counter Narrative



•
•
•

Re-Defining...
NewRiver in Numbers
UK’s 4th Largest Shopping Centre Owner/Manager

Average purchase
yield c. 9%

£450 million
assets unde...
Death of the High Street?

4
Some High Streets are Underperforming


There are too many shops and obsolete stock



Chronic under-investment



Dece...
The Counter Narrative
•

Retail spend remains resilient

•

Positive annual growth between 2007 to 2012

•

Recovery mode
...
Retail Market

Source: Verdict

7

Primark, Aldi, Poundland – stellar
results
Not bricks vs. clicks – multi-channel

•
Nei...
Retail Market: Offline Spend Growth

33.5
23.8
16.9

17.3

15.1

14.9

13.3

11.9

Spending growth online

9.3

7.7

7.5

...
The Consumer – Not just king but centre of the Universe
Defining consumer behaviour:


Polarisation of retail



Discret...
Re-Defining the High Street – Its not just about retail
Complex Range of Issues
• Convenience
• Clean, attractive, safe
• ...
Community, Partnership, Innovate, Invest
• Collaboration on town strategy
• Economic partnership
• Investing in your town ...
Conclusion
UK Retailing Remains Resilient
• Retail is alive and kicking
• The consumer is more than just King
• Joined up ...
Discover more about NewRiver & the true value of retail
Nick Sewell

Paul Wright

Executive Director
nsewell@nrr.co.uk

Di...
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Nick Sewell, Future of Town Centres

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Director of shopping centre owner NewRiver Retail sets out the story so far for the £450m portfolio and its approach to town centre mall managament

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  • NewRiver plug. Investment thesis base on non-discretionary retail, affordable/sustainable rents, strong covenants, high frequency shopping.
  • Myopic reporting?Everyone has an opinion on retailComet – headline on evening news but not on the high street
  • Retail stock will shrinkInvestment in obsolete stock or change of useLocal authorities have assisted in decentralisation of everything – schools, offices, retail, cinemasThis is not just a retail problem but a town problem.Why invest in a failing town.
  • 30% GDPEmployees x million Future growth predicted for 2013 to be at its highest level since 2007.
  • Amazon picked the low-hanging fruit and now that market is almost saturatedPrimark actively rejecting onlinePoundland, Lidl and Aldi aggressively increasing portfolio size. Exciting interplay between property and online.
  • To understand retail you must understand the consumerYou ignore the consumer at your perilNot Prime vs. SecondaryDiscretionary vs. PrimeFinite time and finite moneyValue, convenience, lifestyle
  • No Silver bullet – nostalgia must not drive policyConvenience – you cant out muscle the Trafford CentreSafe, clean parking is obvious but a rarity – should it be free to compete with supermarkets and retail parks.Open times is interesting. Goes back to convenience and catering to the consumers changing needsTown needs to offer a broad range of services – banking, healthLocalism – promote the town consumers can be loyalMarkets – incubate new businessesLifestyle – food and drinkSocial interaction
  • Master plan – future proof – not reactivePump prime investmentRelieve the burden of property taxation – level playing fieldIncubate new businessLoyalty
  • Retailing is a very large and exciting market and in the UK we have some genuine world class retail companies operating in our market placeThe challenge for the real estate industry is to be more focused on the consumer And if we can do that some very attractive returns are available for those that succeed
  • Nick Sewell, Future of Town Centres

    1. 1. Future of Town Centres Nick Sewell, Director, NewRiver Retail Paul Wright, Director, NewRiver Retail Place North West Retail Conference, City Tower, Piccadilly, Manchester Wednesday 27 November
    2. 2. Overview • • • An Introduction to NewRiver Retail Death of the High Street? The Counter Narrative   • • • Re-Defining the High Street Community, Partnership, Innovate, Invest Case Studies    • Consumer Discretionary vs. Non-discretionary Spend Leamington Spa Locks Heath Wallsend Conclusion 2
    3. 3. NewRiver in Numbers UK’s 4th Largest Shopping Centre Owner/Manager Average purchase yield c. 9% £450 million assets under management 24 UK-wide shopping centres New Look, Primark, Cooperative, Supe rdrug Tesco 950 occupiers 105+ million shoppers pa 96% average occupancy rate 3.8 million sq. ft. 3
    4. 4. Death of the High Street? 4
    5. 5. Some High Streets are Underperforming  There are too many shops and obsolete stock  Chronic under-investment  Decentralisation of towns - out-of-town retail and business parks  Competition  Property taxation  Inadequate parking  Some locations will not recover  High Street decline is symptomatic of poor performing Town Centres  A Thriving town matters hugely; they are our economic and social hearts 5
    6. 6. The Counter Narrative • Retail spend remains resilient • Positive annual growth between 2007 to 2012 • Recovery mode • Population growth • Retail spend remained resilient • Winners & Losers • Food & grocery expenditure is capturing circa 45% of total sales . 6
    7. 7. Retail Market Source: Verdict 7 Primark, Aldi, Poundland – stellar results Not bricks vs. clicks – multi-channel • Neighborhood 16% The cost of unsustainable. • Out of Town Food 23% Non-store retail remains a small channel • Town Centre 42% Town centres capture 58% spend • Catalogue & Bricks & Mortar TV Shopping Online Pure play 4% 4% 2% Out of Town Non-Food 9% • • Retail Spend by Retailing Destination Out of town food remains a significant threat free delivery is
    8. 8. Retail Market: Offline Spend Growth 33.5 23.8 16.9 17.3 15.1 14.9 13.3 11.9 Spending growth online 9.3 7.7 7.5 Spending growth offline 2.4 2007 0.9 2008 -1.5 2009 0.4 -0.4 -0.4 0.5 1.2 1.7 2.0 2.1 2010 2011 2012 2013 2014 2015 2016 2017 Retail growth exc online sales Online sales growth Source: Verdict Change in sector expenditure £m 2007-11 8
    9. 9. The Consumer – Not just king but centre of the Universe Defining consumer behaviour:  Polarisation of retail  Discretionary vs. non-discretionary  More informed.  More competition  Value, convenience, lifestyle 9
    10. 10. Re-Defining the High Street – Its not just about retail Complex Range of Issues • Convenience • Clean, attractive, safe • A broad range of services – community, housing, health • The growing importance of Localism • Markets / pop-up shops • Lifestyle 10
    11. 11. Community, Partnership, Innovate, Invest • Collaboration on town strategy • Economic partnership • Investing in your town centre • Relieve the burden of property taxation • Embrace technology • The heart of the community 11
    12. 12. Conclusion UK Retailing Remains Resilient • Retail is alive and kicking • The consumer is more than just King • Joined up thinking between key stakeholders • Hands on asset management • Investment is key • Strong town centres = strong retail destinations 12
    13. 13. Discover more about NewRiver & the true value of retail Nick Sewell Paul Wright Executive Director nsewell@nrr.co.uk Director pwright@nrr.co.uk Join the Conversation Watch Our NewRiver Feature Video (Search for NewRiver Retail) Explore Our brand new website www.nrr.co.uk Tweet @newriverretail #trueretailvalue Link In NewRiver Retail 13

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