High Street clouds ‘have a silver lining’

Every cloud has a silver lining, even in the embattled High Street, according to retail sector specialist Chris Gaskell.

A steady drip-drip of announcements of well-known brands closing stores across the UK has given the impression that some retail centres are on an irreversible downward spiral.

The appearance of the High Street has changed but reports of its death may be exaggerated, says the head of agency at Birmingham-based chartered surveyors Johnson Fellows.

“There is no doubt that it is tough in the High Street,” said Chris. “Clearly it is, but certain retailers are still acquisitive and it is because it is tough on the High Street that they are so active.

“It may sound harsh but it in this case it is true that every cloud has a silver lining. I accept that there are certain agents out there that are struggling because their clients are putting everything on hold.

“However, we are fortunate because we have a solid base of clients who are very active. Clients like Games Workshop are keeping us busy with relocations. They are only keeping us busy because there are good opportunities out there. If you look hard enough you can find the deal you are looking for and a lot of landlords are being far more realistic.”

Clients are being advised on acquisitions, disposals and relocations as they adapt to the changing retail landscape.

For example, Johnson Fellows’ client Heron Foods is looking to expand with the acquisition of 30 new stores across the Midlands region.

The retail specialists, who act for some of the UK’s most successful retailers including Asda, Tesco, Claire’s, Phones4U and Lloyds Pharmacy – have been set the task by the leading food retailer of finding stores to support its ambitious expansion programme.

Johnson Fellows has been retained as agents on behalf of the family-owned food retailer which currently operates from around 170 stores in the North of England and the Midlands and employs around 1,800 people.

They have been asked to target suburbs where Heron Foods currently has no presence. Sites of 3,000 sq ft to 5,000 sq ft, in prime, secondary or estate locations, which are close to transport links and other retailers are being sought.

Chris said: “Heron Foods is an ambitious company that is keen to grow and is therefore considering expanding. They have plans to launch around 30 new stores and we are delighted to be able to provide the support they need in terms of locating the right properties at the right locations.

“Discount food stores is a growing market in a recession. They are the kind of companies that are doing well. We also act on behalf of Jessops who are using the opportunity to relocate under-performing stores into better trading positions while there are good opportunities on the High Street. The incentives are there to justify the relocation costs.

“Incentives available include rent-free periods and capital contributions. Landlords are being more realistic because of the conditions and, rather than paying empty property rates, they are willing to do a deal. Just three to four years ago far fewer incentives were available.

“Acquisitions are easier than they were three years ago. It is clearly a retailers market at the moment and so long as you don’t try to abuse the situation you will get a good deal.”

Games Workshop is considering relocations across the UK, both to reduce rents and also to gain unrestricted trade because stores at shopping centres can only trade certain hours. By moving out to the High Street they can extend their hours and reduce their outgoings generally. This is good news for the High Street.

As for the future, Chris sees more of the same: “I don’t see that the market conditions will change dramatically for the next two to three years. We will see the same sort of retailers performing well, such as the likes of Poundland and other discount retailers. It is that sector of the market that will continue to perform. Your typical fashion retailer, however, is going to struggle and will inevitably close stores. It is that sector of the market that is finding the situation really challenging.”

It could also be a case of rags to riches for charity shops. “The charity sector is another that is performing well. We act on behalf of the Blue Cross charity which is very acquisitive at the moment and we have helped them to acquire 12 sites in the past year alone. They are looking for a similar number in the next 12 months and are considering stores in key, affluent market towns.

“A few years ago we would have been struggling because landlords didn’t want to work with charity shops.”

Much of the blame for the state of the High Street and the number of vacant shops has to put at the feet of the planners, said Chris. “They have consistently supported the development of competing sites such as the Bull Ring in Birmingham and the new John Lewis store in Tamworth. There is a real struggle to let units at Anchorside in the town and it may never recover. The growth in the Tamworth retail parks is also having an impact on Sutton Coldfield, which doesn’t offer free parking and is struggling to compete.”

Despite what the commercial property sector doom and gloom merchants may say about the retail market, the future looks good for both Johnson Fellows and many of its clients.

“These are exciting times at Johnson Fellows. We are building excellent teams of property professionals across our departments and we are very fortunate that our key clients are all busy. There’s no doubt the market is tough, but last year was the best for four years for our agency team. I am quite excited at the prospects for the immediate future. There are deals out there if you are acting for the right people and we are fortunate enough to have the right clients at the moment.

“Acquisitions are an area we want to build on and we have got a good opportunity to do that. The immediate focus is to build the agency department and the business is out there to enable us to do that. In the last year we have had a lot of new work come in to the team in a so-called recession, so that is very positive.”