Everyone knows that the global retail landscape is changing, and changing fast. Online shopping is transforming the way retailers use physical stores, as they convert more space to fulfilling click and collect orders and process online returns.
Retailers around the world are being disrupted and are having to adapt to suit changing consumer behavior. The role of the old, boring and under invested department store is largely redundant and landlords are having to adapt to the fact that they may not always have the retail occupiers to fill empty or surplus spaces. However, what is encouraging, is the way many owners and developers are already looking creatively at repurposing and repositioning specific retail assets to meet the ever-changing demands of the communities in which they’re based. Often, multiple new uses are being incorporated into part or all of a redundant space, attracting new innovative occupiers, giving sites a totally new lease of life and – in many cases – creating exciting new places and destinations.
In Oslo, for example, three low standard office buildings were developed into multipurpose assets by combining high standard office space and “foodtech” concepts. The assets (Youngstorget) are located at a popular city-square for cultural experiences in Oslo, filled up with bars and restaurants, hence competition is high. The assets were fully refurbished and upgraded. Moreover, an eight-story office building was erected in the courtyard. A collective F&B concept was introduced in the refurbished buildings, which houses several bars and restaurants. Their business plan revolves around being a platform for new and innovative restaurants, bars and cafés.
The rationale is that instead of housing competing concepts, the tenants cooperate with each other in marketing and by referring customers to their neighbours, thus creating synergy. The concepts located in the foodtech incubator has become highly popular, and the business has managed to attract much attention. This is an example of how one can utilise retail space in ways that stand out and attracts attention.
It’s therefore often not just a case of simply repurposing retail with a single uniform alternative use, such as residential homes, but of finding a solution that works in that individual location and for the local community, and is as future proof as possible. This may include incorporating multiple uses, from the more traditional such as offices, hotels and gyms, to the more radical such as education facilities, film studios, retirement apartments and art galleries. The key is to consider what mix is most suitable to the location and strike the appropriate balance.
This blog is inspired by a theme in Impacts, Savills global thought leadership publication and research programme. This year is the ‘disruption issue’, looking at how widespread economic, political, demographic and technological upheaval is changing the world of real estate.