Overnight repurposing of the high street
During the covid crisis, there was yet another avalanche of retail casualties on the high street. Instead of single or multiple retail units becoming distressed, it was the turn of the department store. These much larger spaces started to become void – something which we had never seen before. So, what do you do with 100,000 sq ft of space?
The answer is of course leisure and F&B, however, it’s not quite as simple as you might hope. For example, if a landlord were to inherit a fitted restaurant, the risk profile to a new letting is far more measured and quantifiable. The quantum of rent and size is much more bitesize, and if the restaurant were to fail, the need for extraction would be limited as the expensive equipment within the unit would likely be used for the next tenant. However, in the case of a department store, it’s a whole different ballgame – you really are starting from scratch.
It’s the landlord’s responsibility to enable a shell unit, and from there, investment to convert to a leisure type use - these are big numbers with big risks involved. Some concepts are already off the ground, which is a massive testament to the likes of Gravity with their family friendly venues, along with Swingers, Bounce and Flight Club, with their competitive socialising concepts. Nevertheless, it’s not all rosy. There have already been casualties in the burgeoning food hall space, and more than one operator has been challenged with large investment coupled with the continuous footfall and spend required. It’s fair to say that not all competitive socialising efforts will be successful over the course of time, and these concepts alone will not be enough to fill the voids. New thinking is required.
The main touch points include community, dining, events, live performances and streaming, micro-breweries, gin and vodka distilleries, community retailing, meeting rooms; the list goes on. Is it possible for all of this to happen under one roof? It’s already happening. Take one of my favourites, Sarona Market in Tel Aviv. It boasts one of the most incredible food markets and retail destinations. Notably, the market includes bar dining but also incorporates wine tasting rooms and whisky bars, whilst also leaving room for a McDonalds. On top of that, there are ongoing events that utilise the space, such as Fashion Week, Opera, Octoberfest, Flamenco – essentially, something for everyone.
If we look closer to home, KOKO in Camden is subject to a £70m refurbishment. Traditionally known as a music venue, it’s being completely transformed into something far more multidimensional. The ground floor will welcome you with a pizzeria and tap bar leading you to a shop with a DJ space, piano room, main theatre, jazz club, recording studio, roof terrace, restaurant, and a dome cocktail bar. When it comes to the next generation of food halls, we will begin to see a lot more diversity. Taking inspiration from places like Sarona Market, the need to capture and keep guests coming requires different experiences than just the typical food and drink. This will mean greater space is required, and likewise, greater investment.
The good news is that progress is afoot; however, the change is challenging landlords, and the funds that sit behind them in committing to such a substantial investment comes with its risks. Operators are constantly evolving, but now need more investment than ever. I’m excited to see the ‘firsts’ within the market and those who will get the accolades and profile, which will no doubt aid the meaningful transformation of the high street.
Ted Schama, Joint Managing Partner at Shelley Sandzer