The situation prior to the recession, where the success of a particular town centre was based principally on securing a shopping centre development, may be nearing an end.
The exceptional amount of retail property development seen prior to the recession may never return. Certainly, the recession has halted the unsustainable expenditure growth seen over the past decade and much-weaker expenditure growth is likely for the foreseeable future. This, combined with other consumer and retailer trends, in particular the impact of the internet, will have implications for future commercial property requirements.
GVA’s research regarding the retail development pipeline in Scotland shows a reduction in activity since last year. The total amount of floorspace in the pipeline has reduced by around 65,000sq m to 1,386,214sq m (gross). Overall there are 258 current retail proposals, which compares with 286 in 2010 and 208 in 2009. Of the total floorspace in the pipeline, 44.7 per cent is at application or proposals stage; 50.7 per cent has been granted consent and 4.6 per cent is under construction.
While the retail development pipeline data continues to show significant levels of proposed activity throughout Scotland at this difficult economic time, the levels of development under construction continue to remain very low, particularly in terms of town centre space.
Certainly, there is a perception traditional town centres have been less capable of withstanding the effects of the recent economic decline, when compared to out-of-centre retail locations where it is far easier to deliver the modern formats that retailer’s desire.
This is backed up by our research, which shows many town centre vitality and viability indicators weakening over the past 12 months. In the future, town centres may need to evolve and their role might not necessarily be retail led, with a greater concentration on the other town centre uses such as leisure, entertainment, residential, business, cultural and community uses.
The focus should perhaps be on promoting the individuality of town centres in order to provide a unique selling point capable of competing with the often bland nature of many out-of-centre locations.
The importance of forming strong public and private partnerships with the aim of promoting innovative funding mechanisms will have an important role to play if physical development and regeneration is to take place in many town centres. Indeed, in various larger centres, there are a number of stalled schemes that would benefit from such assistance.
The challenge will be to build on the good work that has taken place in terms of promoting town centre developments, strategies, masterplans and other supplementary planning guidance type activities, with a focus on progressing these through to delivery.
The Scottish Government appears to be committed to town centres. The Town Centre Regeneration Fund has been seen as a success that should be repeated and the deputy first minister now holds the “cities minister” portfolio.
Planning policy also remains firmly committed to town centre development, alongside the recent tax-increment financing (TIF) pilot initiative, which is aimed at supporting the continued development of retail and leisure floorspace in Glasgow city centre’s “Buchanan quarter”. It will be important to continue to build on these initiatives and cross-sector partnerships to ultimately secure the long term future of Scotland’s town centres.
This could involve promoting Scotland’s prime locations on a global basis given the high level of prime retail floorspace that is in the ownership of funds and developers from outside Scotland.
• Paul Rounce is a planning, development and regeneration associate at property firm GVA.