Is this the future of Shopping Centres ?

The High Street maybe dying, Shopping Centres struggling but there others who think differently. And thinking differently being the operative phrase.

Emaar Properties and Dubai Holdings have announced plans for an 8 million square foot of leasable Retail space in none other than Dubai. It will be the largest retail complex in the world . Much of it will be ‘Dubai’ like with water parks, ski slopes and artificial moon landings (joke) , theatres, and numerous entertainment centres. It is, however, the technological retail dimension that I believe could have a bigger impact on shopping centres worldwide.

The plan is to develop the retail environment using very cutting edge technology, including radio frequency identification (for checkouts), specifically designed apps, latest bar code scanning techniques, ability to purchase through desktop pc’s , mobiles and run of the mill checkouts.

Do I think this will be emulated in the U.K.? Do I think the Metro centre and Meadowhall in Sheffield are going to reinvent themselves and suddenly deter tourists from flocking to the Middle East ? No, ‘cos Sheffield and Gateshead ain’t figured out the sun and sand bit yet. However, much like the High Street but for slightly different reasons Shopping Centres will have to reinvent themselves.

There are signs that this has started to happen, as many have cinemas, numerous restaurants and in some cases casinos and hotels. Yet, I don’t think this is enough and the developers will have to be a lot more inventive to curb the current decline. As Department Stores are closing down at a rapid rate , the Centres are loosing their corner stones. For many years the attraction for many retailers looking to lease in a shopping centre is who are the anchors eg John Lewis, Debenhams,House of Fraser etc. much of the problem with shoppping centres is they have often been a reflection of a Department store trying to be many things to many people and in the end not really offering anything that anyone wants.

Shopping centres face further challenges to that of the High Street. The issue of high rents is, as I understand, underpinned by the Landlord and its investors. The financing of the Centre is based on the rent returns based on historic high values. Until this changes there is going to be no reapraisal of rentals anytime soon. Consequently they are going to have look at what they offer . For the foreseeable future there are not going to be more Retail stores, or certainly not in their current format. Hence they will need to attract new revenue streams from the entertainment and leisure markets.

There is, currently, one example in the U.K. which maybe gives a hint of what is to come . I am not sure they have got the mix right plus it is a bit of bolt on job to existing facilities but at the NEC near Birmingham, you,now, have an exhibition centre, entertainment centre , retail shopping centre, casino and this year Merlin entertainments have added the Bear Grylls adventure park. Because of its bolt on , ad hoc development nature of the NEC, it is all a bit higgledy piggedly. But nevertheless, it is an interesting direction of travel.

Another issue they face is that there is a fundamental structural problem, which is, perhaps a far bigger wall to climb, and that is their Structure. They are huge great monolithic beasts. It is like turning an oil tanker on a ‘sixpence’ (look it up if you don’t know what that is- and shame on you). In their present format there is little that could be done to adapt them for the next thirty years apart from knocking them down. In a way they are much like their historic cornerstones, the Department Store. They tried to be all things to all people and for a long time and whilst there was no alternative it worked. The alternatives are here and they are beginning to not work (Shopping Centres that is). Or certainly not as much the owners would like.

It maybe that some will be completely redeveloped. It is more likely that they will have to be more like the Dubai model. They will have to be cutting edge in terms of the experiences they offer and far more in tune with tomorrow’s retailers. Currently they can do neither. Redevelopment alone will be not enough for most . If the Meadowhall’s and Metro Centres of the future are to be successful and last another thirty plus years they will have to be completely rethought

If zip lining from the car park to Primark, having your purchases delivered to your home on your return, dining at a vast variety of international cuisine, losing fifty quid at the black jack tables , followed by a virtual concert of Elvis Presley, Aretha Franklin and David Bowie and returned via a completely dry water Shute to your electric auto thing, does not float your boat. Then you’ll probably have to stick with shopping at your local Amazon store.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s