Big is Back

Over the last few years, big space lettings to traditional occupiers of LSU’s, outside of the top 10 UK retail locations have been limited. Retailer demand has been low, or where present, terms have been more attractive from alternative users in the life sciences, education, and living sectors.

While diversity of uses, coupled with other reasons to bring people to the place is welcome in certain places, in many cases this reach for something new has a dilutive and destructive impact on the fabric and purpose of a location, said Simon Morris, joint managing partner, GCW.

He said: “Where quality comparison retailing demand can be stimulated it supports the existing offer and creates a focal point and purpose to a place.”

Department stores have been consigned as dead by many, said Morris, but “in the right place and well run they have a purpose.”

For example, Morleys, a GCW client, have exchanged contracts in March on the 75,000 sq ft former House of Fraser in Bath. Morleys operating model is to support the offer to the local customer and as part of this is reestablishing the 185-year-old Jolly’s brand.

Another example is the former Debenhams in Salisbury being occupied by Bradbeers. “Big space demand is driven by occupiers who want to get closer to their customer,” said Morris.

He added the hub and spoke, showrooming, brand consolidation and concept stores from the likes of Go Outdoors, JD, Mountain Warehouse, M&S and Inditex, “are focused on upsizing to showcase the brands and the depth of product range in the right locations.”

The irony for many retailers, said Morris, is this is also about downsizing concepts: “Large space occupiers such as TK Maxx, Primark and Dunelm are curating their offer are into a smaller envelope so they can secure space in locations where their traditional requirement of 20,000 sq ft and can’t be accommodated.

“Compromises to achieve net sales of 8,000 sq ft plus include multilevel trading.”

But big space is at a premium, and securing it while building a pipeline, involves a creative approach if certainty is required. Retailers like Frasers, and Dunelm have the flexibility to buy in freeholds either as standalone stores or to create the desired space through consolidation and redevelopment.

Expansion into adjacent space as being undertaken in Chiswick by M&S, with GCW advising the landlords, shows lateral thinking. This project secures the optimum trading space, said Morris: “The multiple lease and ownership structure has not been a barrier when the focus of the business is put front and centre.”

Simply put, big is bold and, said Morris: “We believe this sector of our market provides some of the most exciting opportunities for both occupiers and owners.”