Even before the Covid-19 pandemic, we had become accustomed to images of shuttered local shops and reports of yet another well-known chain going into receivership, along with declarations of “the death of the high street” in the face of convenient online retail.
It may seem that the pandemic was to be the final nail in the coffin, yet some surprising new patterns have emerged that point to a possible local renaissance. While central areas, especially in large cities, suffered a collapse of visitors due to travel bans and a lack of office workers and tourists, many local communities have seen their shops become more valued by home-working residents, with significant numbers unlikely to be returning to a five-day week in the office.
But local high streets also present a challenge—their ownership is patchwork, making a unified strategy for revival difficult. Business rates, bemoaned in many headlines, have also been a challenge. The long revaluation cycle can be punishing for retailers in areas that were doing well during the last valuation, but who are left with the same tax burden even when the local economy declines. In its role of supporting confident markets, RICS is calling on the government to reform the rate system in England and Wales by enabling greater flexibility and responsiveness. This will help both landlords and tenants.
Landlords obviously have an important role. Amid the unprecedented crisis of Covid-19 many have adopted a far more collaborative approach with those tenants who can’t pay the rent. RICS was among the bodies endorsing the government’s “code of practice for the commercial property sector,” first published in June 2020, which has encouraged constructive discussion between parties. After all, evicting a tenant for non-payment, then trying to let out an empty unit in the current climate, is not necessarily the best course of action—especially if the struggling tenant’s business performs well under normal circumstances.
To support the code, RICS has introduced a Commercial Rental Independent Evaluation Service, which uses expert evaluators to support both parties in finding a workable solution. One new idea is the creation of “turnover rents,” where landlords receive an agreed portion of their tenants’ income, rather than a monthly or quarterly rent—until things return to normal. This would be a far better outcome for both parties than the closure of a business and empty premises. The collaborative approach is likely to continue even after the pandemic’s effects begin to fade—short tenancies having already become more normalised. Turnover rents represent another helpful mechanism for innovative landlords to take a chance on new tenants.
It would appear there is simply an oversupply of retail on Britain’s high streets, with supermarkets and the internet having taken the place of many separate local shops. In view of this and the other British crisis—our ongoing housing shortage—it is not surprising that many have called for conversion of shop space into homes, and the government has obliged, allowing change of use for shops as well as offices without requiring time-consuming planning permission. On the face of it, this makes sense, but concern has been raised by RICS about the quality of these adapted buildings as homes. More homes are certainly required, but this must only be done with an eye to creating safe, high-quality places to live and while maintaining a vibrant community.
Successful high streets create a certain balance. Offices are required not just as somewhere to work, but also to provide custom for local businesses. Community services such as libraries, health centres and council services should be in places where they can easily be accessed by a wide range of people. This image of the high street is associated with an increasing focus on “placemaking”—the idea that public spaces have a big impact on the people who use and pass through them.
Developers will be increasingly focused on creating spaces that can be used and appreciated by the local community, and that also have environmental, social or cultural benefits. These could include more greenery, better lighting and open spaces that discourage crime. They could also incorporate public art or performance areas.
All of this plays into the concept of the “20-minute city,” where locals can find everything they need nearby with less need for car journeys. RICS encourages this model-—and is pushing for greater central funding to improve local authority planning capacity and to enable these more sustainable town centres.
So perhaps it is better to talk about the “rebirth of the high street” as a local hub: a place where landlords are flexible and try out new solutions; where chains, independent retailers and service providers can thrive; and where community services and workspaces are included as part of the mix.
