Latest Trends In Retail Asset Management - Ben Cox and Alistair Winning14th November 2022
There is no doubt that sustainability is now one of the most important topics not only in this sector but across the entire economy. Investors, occupiers and shoppers all understand the importance of creating shopping destinations which are as environmentally-friendly as they can be.
We recently had COP27, highlighting the measures we need to take to limit the global rise in temperatures to 1.5 degrees centigrade, but we are also in the middle of an energy price hike. However, as Senior Asset Manager Ben Cox explains, a significant amount of work is now being done to mitigate the former and provide a solution for the latter.
“Structurally and architecturally, some shopping centres have a large amount of roof space, making them ideal for solar panels. Metrocentre has 3,500 panels fitted both on the roof and also over EV charging ports in the Green Mile car park. Together, this £2.8 million project will provide around 1.6m KW hours of electricity and help the drive to make this retail asset one of the most sustainable in the country.”
Ben goes on to discuss other initiatives at Metrocentre including encouraging green transportation, green waste disposal as well as the installation of both business and energy management systems.
At Merry Hill in Dudley, Sovereign Centros has also been working to make the shopping centre more sustainable. Asset Manager Alistair Winning says: “As part of the sustainability strategy, 2,250 solar panels are being have been installed, along with 32 twinport EV charging panels, making it one of the largest electric vehicle charging initiatives in the West Midlands.”
Alistair adds: “Sovereign Centros has been very much in the vanguard when it comes to sustainability at its retail assets and this will have been factored into the business plans for our shopping centres. Now, with rapidly rising energy prices, it makes sound economic sense to reduce our carbon footprint and ensure maximum profitability for investors.”
As we move well clear of the effects of Covid 19 on the retail market, another key issue within asset management is the increasing use of an experiential approach to increase footfall. The team at Sovereign Centros is witnessing a healthy recovery in the footfall at most of its shopping centres. Indeed, on a number of occasions this year, the Firm has seen shopping numbers exceed pre-Pandemic levels.
As professional retail asset managers, we recognise that in order to tempt people back into town centres, there needs to be considerably more than a retail or food & beverage offering for shoppers. Hence, we are bringing a range of experiential initiatives which will not only attract an older generation of consumers but also younger age groups who are used to a more digital experience and may otherwise not want to venture into a shopping centre.
Says Alistair: “A prime example of this will be has been the opening of Hollywood Bowl at Merry Hill. This 36,000 sq ft offering will make a huge difference to footfall and initial reports suggest that this will is positively impacting on the average transactional value at the centre.”
Ben continues: “Today’s shopping centres need to be so much more than venues containing retail, restaurants and bars. In a multimedia, multi-sensory age, they have to offer a range of experiences. This could include leisure, workspace, art galleries, gyms, & playgroups. The need to create a thriving & varied community is critical to each location.
“Clearly, the more range of experiences on offer to as wide a range of shoppers as possible, the greater the chances of increasing footfall as well as ATV.”
This is particularly important for today’s digital first, connected customers. Millennials and Generation Z (those aged under 35) now live increasingly digital lives so retailers are recognising that the customer experience – as well as the customer journey – may need to a blended online/offline proposition.
Ben Cox says: “We see brands like Nike doing this very successfully because they understand today’s consumer and how they like to shop. They appreciate that younger consumers very much like to engage and be engaged with using social media but still like to socialise and shop in person. Therefore, they are very much taking the ‘direct to consumer’ approach using sophisticated online marketing campaigns combined with a strong bricks and mortar presence.
“As a result, we are seeing major retailers such as Zara, Next and Primark upsizing in order to offer a wider range of products in bigger stores. This move to ‘flagship’ stores is an attempt to mirror the large stock inventory that the online retailers possess as well as the customer journey that shoppers would normally experience online.”