The retail landscape is changing. Recognised brands are disappearing, giving rise to a trend for pop-up shops. This month, James Parden takes a look at the impact this is having on high street landlords…
It started with Woolworths in 2008. Big name retailers have been disappearing from our city centres for almost 10 years, as the sector reshapes and regroups in the face of online competition.
Sheffield unwittingly accelerated the process, serving compulsory purchase orders on buildings making way for the new Retail Quarter before plans were put on ice. This left a whole swath of shops unoccupied and the council with a problem.
A vibrant centre is essential for any major UK city and it is exciting to see development works commencing after years of waiting. During this period, empty units have given independent and start-up retailers an opportunity to test the water in a prime location without the burden of expensive rent or a long lease. The most recent example can be found on Fargate, as the trend for pop-up shops gathers pace.
The thought of earning peppercorn rent with no lengthy commitment from a tenant might not appeal to landlords, but when weighed up against the prospect of paying business rates during void periods, offloading the burden, even if only for a little while, can be attractive.
Of course, there are risks to short term lets – unpaid rent and dilapidations – but we can draw up a tenancy that provides protection. It is possible to stipulate what can be done to your shop and what will require consent, whilst there is also the potential for court action if your premises are left in a mess.
A recent article in Retail Gazette put the current value of the UK’s pop-up market at £2.3 billion. Established names are also getting in on the act, taking temporary space on the high street to raise brand awareness and engage with customers, rather than selling to them.
The impending business rates revaluation may see more shop closures, particularly among independents, which will inevitably impact on landlords and make way for more pop-ups.
During such a turbulent time on the high street, it pays to be open to new ideas. If you have empty retail premises, don’t dismiss this bandwagon – it could be a short-term solution with long-term benefits.