Shoppin Centre Magazine - January 2017

The business of retail destinations

www.shopping-centre.co.uk

January 2017 • £8.00

Stars of the screen Digital screens enhance creativity

09 Technology Snapchat geofilters enhance experience

14 Commercialisation Digital screens allow creative advertising

24 Sustainability Centres tackle increased food wastage

3 CONTENTS

Editor Graham Parker 07956 231078 gparker@55north.com

Editor’s letter

Editorial Assistant Iain Hoey 0141 222 5385 ihoey@55north.com Sales manager Trudy Whiston 01293 416090 twhiston@55north.com Events sales manager Graham Harvey 01474 247032 gharvey@55north.com Senior designer Richard Chaudhry 0141 222 5300 rchaudhry@55north.com Designer Lisa Deakin 0141 222 5388 ldeakin@55north.com Managing director Antony Begley 0141 222 5380 abegley@55north.com Editorial board Leigh Burnett, Waypoint Asset Management; Carl Foreman, Moorgarth; Byron Lewis, Mall Solutions Europe; Andrew McCall, The ROI Team; Howard Morgan, RealService; John Prestwich, CBRE; James Taylor, Workman; David Tudor-Morgan, British Land No part of this publication may be reproduced without the written permission of the publishers. JLD Media is operated by 55 North Ltd under licence from Stephens & George Magazines Ltd. The Publishers accept no responsibility for any statements made in signed contributions or in those reproduced from other sources, nor for claims made in any advertisements.

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The subdued shopping centre market that characterised 2016 looks likely to continue into 2017.

Political uncertainty, coupled with the fact that other property sectors are offering more attractive returns, is deterring

NEWS & ANALYSIS 05 06 07

NewRiver in for planning in Cowley Showcase extends into Bluewater event space Revo gold for Newport, Bolton and Ipswich

FEATURES

Page 16

09

Technology – Snapchat’s geofilter technology is opening up new opportunities for shopping centres to personalise the user experience

14

Commercialisation – digital screens allow creatives to move beyond the static poster

24

Sustainability – Tackling food waste is a growing problem thanks to increases in F&B offerings Page 15

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in a refurbishment or extension.

Another worrying scenario, highlighted by Knight Frank, is the threat by the government to abolish the Public Works Loan Board which has financed many of the recent purchases of shopping centres by local authorities. Whether or not property investment is a suitable use of the funds is a moot point, but councils have become the dominant players in the market and without them the shopping centre investment market would be looking very sorry indeed.

CONTENTS

ISSN 0964-1793 | Printed by Stephens & George Ltd Shopping Centre, 55 North Ltd, 19 Waterloo Street, Glasgow, G2 6AY

investors from buying malls which require major commitments of capital and management resources.

Why does this matter to the folk who run shopping centres day-in-day-out? Well, it’s nice to be wanted but more importantly an active investment market keeps management teams on their toes. The process of preparing malls for sale is often a spur to ensure management systems are all up-to-date. And the arrival of a new owner is often accompanied by new investment

30 35

Data – Retail facts & figures People – Back to the shop floor for Ellandi and Workman

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5 NEWS

NewRiver goes for planning in Cowley NewRiver REIT has submitted a planning application to completely transform the Templars Square shopping centre and its immediate surroundings. The £60m mixeduse proposal will preserve the existing Templars Square shops, while bringing forward a range of significant improvements to create a more vibrant and thriving community in Cowley.

The proposed plans include the addition of a hotel; new restaurant units for leading national operators; a dramatically improved streetscape and pedestrian routes; upgraded, modernised car parking and stylish new feature entrances.

Importantly, the proposed development will have over 200

one-, two- and three-bedroom apartments, including affordable provision, a significant contribution from a brownfield site in tackling the recognised shortage of homes in Oxford.

Allan Lockhart, property director of NewRiver, said: “This milestone marks a real step-change for Cowley and is long-overdue. The case for regeneration is absolutely clear and this is an excellent opportunity to reinvigorate the heart of the town centre with high quality and modern, yet sensitively designed, development that will be a source of real pride locally – not just for our large number of loyal shoppers but for the wider local community.”

£70m Birmingham New high for shopping centre buy Land Securities in Leeds Europa Fund V, managed by Europa Capital, and Sovereign Centros have bought One Stop shopping centre and retail park, Perry Barr, from Standard Life Investments UK Shopping Centre Trust. The acquisition price of £70m reflects an initial yield of 7 per cent.

The 380,000-sq ft complex, just over three miles from the centre of Birmingham, sits on a site of 28 acres and consists of a shopping centre anchored by Asda and a retail park. Key retailers include Marks & Spencer, Nike, Argos, Wilko, Boots, New Look, Sports Direct, Arcadia, Home Bargains and Poundland. Rents in the shopping centre range from £30 to £60 per sq ft zone A and from £15 to £22 per sq ft on the retail park.

Chris Geaves of Sovereign Centros said: “The asset sits in an interesting area within Birmingham which is planned for significant change. We look forward to taking our plans for the asset forward.”

Europa Capital and Sovereign Centros were represented by Savills and Standard Life Investments by Strutt & Parker. www.shopping-centre.co.uk

Land Securities’ White Rose shopping centre in Leeds ended the year on a high with the Topping Out of the 65,000-sq ft leisure extension.

A formal ceremony was held, commemorating the final beam laid at the peak of the new IMAX screen.

The extension will introduce six new restaurants, including units which have already been prelet to Wagamama, TGI Friday’s, Chiquito and Pizza Hut, alongside an 11-screen, state-of-the-art IMAX Cineworld cinema, an event space, and a uniquely designed children’s

play area.

Rob Jewell, portfolio director at Land Securities, said: “The Topping Out ceremony marks the team’s achievement since breaking ground in April and is an important step towards practical completion in just over three months’ time.

We look forward to opening new restaurants and the cinema next summer, creating a space that fits the needs of those who work and shop at the centre, and bringing future prospects to those that live and shop in the area.”

JANUARY 2017 SHOPPING CENTRE

6 NEWS

Showcase extends into Bluewater event space

Part of the unsuccessful Glow events space at Bluewater is to be converted into a four-screen extension for the existing Showcase Cinema de Lux, adding to the existing 13 auditoriums. Due to open in late 2017, the new screens will be connected to the existing cinema via a link bridge.

The 50,000-sq ft Glow opened in 2013 and hosted events from comedy nights and boxing to jobs and wedding fairs, but it failed

to secure regular bookings and was often unused and Land Securities has been looking for alternative uses.

As part of the expansion, a large format XPlus auditorium will be added. Every new seat will be a fully customizable electric recliner, giving guests the opportunity to lie back and relax while watching the latest blockbusters.

Mark Barlow, general manager Showcase

C&R plugs BHS gaps Capital & Regional has exchanged two long term leases for its former BHS units at The Mall Blackburn and The Mall Walthamstow, bringing new occupiers Wilko and the Gym Group into the schemes and delivering significant increases in passing rent.

At The Mall Blackburn, Wilko has signed a 10-year lease to take the entire 25,000-sq ft ground floor space that was previously occupied by BHS. This builds on recent letting momentum with Burger King, Game, Costa Coffee and Krispy Kreme all opening in the scheme by year end. The new Wilko store is expected to open in the first half of 2017 following a refurbishment of the unit.

SHOPPING CENTRE JANUARY 2017

At The Mall Walthamstow, the Gym Group has taken a 20-year lease on the 15,000-sq ft first floor space in the former BHS unit. The opening of the new 24-hour gym, which is scheduled for mid-year 2017, forms part of the strategy to introduce a broader mix of tenants and uses at Walthamstow, where C&R is advancing plans for an 86,000-sq ft retail and leisure extension.

Capital & Regional is also in advanced legals with a major food retailer to take 18,000 sq ft of the remaining 25,000 sq ft ground floor space at the unit, with strong interest from a number of occupiers for the final 7,000 sq ft.

Cinemas UK, said: “Showcase Cinema de Lux in Bluewater is hugely popular with our guests. The expansion will offer even more people the opportunity to enjoy the best cinema experience in unrivalled comfort. The introduction of an IMAX to Bluewater in 2013 and refurbishment in 2014 proved very popular, and we look forward to the additional screens opening next year.”

Morleys to anchor Broadway NewRiver and the London Borough of Bexley have secured Morleys as the new department store anchor at the Broadway shopping centre, Bexleyheath.

Morleys will take a 50,000-sq ft two-storey store for its ninth branch, swiftly occupying the former BHS, which closed in August 2016.

Alongside its headquarters in Brixton, Morleys has department stores in Wimbledon, Ilford, Holloway, Tooting, Upminster, Newbury and Enfield.

The Broadway shopping centre is anchored by M&S, H&M, New Look, TK Maxx, Boots and Sainsbury’s. NewRiver REIT, the long leaseholder of the shopping centre and retail park, worked

closely with the London Borough of Bexley, the freeholder, to secure this new retail offer for the town.

The new Morleys store is expected to open in April 2017 following fitout.

NewRiver director Nick Sewell said: “We acquired Broadway shopping centre and Broadway Square in April 2016 and have worked closely with the council to secure a desirable new anchor store to replace the former BHS store.

"We are delighted to be introducing Morleys department store who will bring an excellent, aspirational and high-quality retail offer for the centre and town centre, further enhancing the retail mix for our shoppers..” www.shopping-centre.co.uk

7 NEWS

Revo gold for Newport, Bolton and Ipswich Queensberry's Friars Walk shopping centre in Newport, south Wales won the new build category at Revo’s annual Gold Awards dinner at London’s Grosvenor House. Queensberry worked with Newport Council to develop the site.

Inception Holdings & Moorgarth's Market Place Bolton won the best

refurb/extension over £5m while LaSalle Investment Management’s Sailmakers shopping centre in Ipswich won the best refurb/extension under £5m. And Aviva's Queen Street Dining development at the Guildhall shopping centre in Exeter won Catering & Leisure Destination of the year.

Bradford City Council won the Public Sector Award for the City Centre Growth Fund;

Smiggle was named Occupier of the Year and Nando's F&B Occupier of the Year with plans to open 20 restaurants in the financial year.

At the end of the awards dinner Giulua Bunting, planning director of GL Hearn, took over from Mark Bourgeois as Revo president for 2017, while Mark Robinson of Ellandi became junior vice president and will assume the presidency in 2019.

Southampton's new Taunton transformation continues leisure venue opens Hammerson’s Westquay Watermark, its dedicated leisureled development has celebrated the opening of its first restaurants. At 96 per cent pre-let, the £85m scheme which is adjacent to Hammerson’s jointly owned Westquay shopping centre, is set to completely transform Southampton’s leisure and dining offer, having attracted an all-new line-up of over 20 restaurants to the city, and the most digitally advanced cinema in Europe. Operators include Franco Manca, Cau, Byron and Red Dog Saloon, which makes its first move outside of London.

The restaurants and Hollywood Bowl opened in December, and the highly anticipated Showcase Cinema de Lux will open in February 2017.

Now the UK’s largest restaurant and leisure complex, the development is a key project for the continued growth of Southampton, making Westquay the region’s leading retail, dining and leisure destination on the south coast. Regenerating a previously underutilised area of the city, the scheme’s exceptional new city plaza, the Esplanade, will host over 100 events and activities throughout the year. www.shopping-centre.co.uk

Rockspring Property Investment Managers has signed a new lease with Smiggle at Orchard shopping centre, Taunton, bringing to seven the number of lettings at the centre in 2016. At the same time Rockspring has secured planning consent for a change of use for 9,000 sq ft across ten existing retail units. The units will be combined to create three new restaurant units with outside seating within the open Pig Market courtyard, increasing the leisure mix and adding to Taunton’s thriving restaurant scene.

Smiggle has taken a 1,535-sq ft unit on a 10-year lease at a rent reflecting £100 per sq ft zone A , a new cyclical high for the town.

Since acquiring the 160,000-sq ft centre in December 2014, Rockspring has let a 5,351-sq ft first floor unit to HMV and a 1,998-sq ft unit to Trespass.

Miles Morgan Travel, Vision Express and Greggs have all upsized on longer lease terms, while Quiz has also renewed its lease and invested in a new fit-out.

Rockspring was advised by KLM and Savills.

JANUARY 2017 SHOPPING CENTRE

8 DIGITAL MARKETING

AUGMENTING THE FUTURE Turning shopping malls into a mobile-interactive space is the future for consumer experience.

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ugmented reality has felt the strain of being an expensive technology to commercialise – the likes of Google Glass barely tested the waters of the consumer market in 2014, when it boasted a hefty thousand-pound price tag. Over the past twelve months, however, virtual and augmented reality technology has been finding its feet, thanks to new innovations such as the 360-degree camera and location based games such as the 2016 phenomenon that was Pokémon Go. For many, these have bordered on being gimmicky, short-lived entertainment vehicles. In spite of this, the buzzword for 2017 in the commercial marketing world seems to be virtual reality.

Rowena Revill, director of Dorset Creative, says, “You only need to look at the digital transformation trends of 2016 to see why the fast adoption and adaptability of digital technology needs to be a core component of many businesses objectives, no matter what their sector is. A few years ago, cloud computing and mobile apps were used by a just few firms experimenting with the idea, now they’re vital parts of operations for many companies. Those that recognise change is going to happen and embrace it rather than stick to their old ways, are the businesses that will thrive in an increasingly digital and competitive world.”

Getting ahead in the game is British Land, which launched one of the UK’s largest ever augmented reality games in retail property. Freezy’s Christmas Adventure was rolled out at 21 local and www.shopping-centre.co.uk

regional centres across the company’s multi-let retail portfolio. The app-based children’s game could be downloaded onto mobile devices and encouraged families to follow a fivestep virtual present hunt, helping snowman Freezy overcome obstacles and gather gifts for Santa.

The campaign, which ran until 24 December, aimed to help to drive footfall, dwell time and brand loyalty as well as increase sales for occupiers.

Ben Dimson, head of business development for British Land, says offering a unique experience is important: “Consumers want places where they can shop, eat and be entertained. We put our customers at the heart of our offer and Freezy’s Christmas Adventure will give families visiting our centres a fun and memorable experience.

Our scale enables us to invest in innovation and industrialise successful technologies across the business.

“We have a loyal customer base who often shop with their children (18.3 per cent) so we think a family game that can be safely uploaded and played again and again is perfect for our customers and their children.”

The game is the first of a fourcampaign partnership between British Land and augmented virtual reality specialist Harmony Studios. The initiative follows app and gamification trials at

three centres throughout 2016 as part of British Land’s commitment to embrace technology to enhance the in-centre experience.

Mel Taylor, CEO of Omnico Group, says the company’s recent research into conumer interest in virtual reality indicates that those that rest on their laurels will be left behind in the face of rapidly-increasing visitor expectations around the use of technology. “Investing in customer service and experience is as important as putting money into new attractions,” he says. “While tastes and requirements vary in different parts of the world, visitors are united in wanting operators to integrate technology so they can have an enjoyable and memorable experience. This does not require major investment in completely new solutions, but intelligent integration.”

JANUARY 2017 SHOPPING CENTRE

9 ANALYSIS

East Kilbride reboots The Hub East Kilbride shopping centre and its newly redeveloped leisure facilities have received destination venue treatment from tourism web design and digital marketing expert, Senshi Digital.

“One of the analogies that I often use is that your website is the best employee you’ll ever have,” says Chris Torres, director at Glasgowbased brand and marketing specialist, Senshi Digital. “It’s selling for you 24/7, it never throws a sickie, it’s working for you, on your behalf, worldwide. You’ve really got to invest in it and take care of it and if it’s done right, planned right and implemented right then it should pay dividends in the long run.”

Torres’ company was recently chosen by East Kilbride shopping centre to revamp the online image of the scheme, following the opening of its newly redeveloped Hub leisure facilities. The new website, which is currently in phase one of development, looks to be more consumer-based and connect with customers on a one-to-one basis.

“It won’t just be a brochure website,” Torres asserts. “Most shopping centre websites when you look at it, you’re looking for the opening times and what shops it has and you never go back again, whereas we are trying to build a bit of a community into it. It’s about getting across the customer aspect – we’re very much in the realms of experiential marketing and trying to get across what you can do there.”

The website is slick, with smooth sliding panels and an easily navigable, image-led homepage. The update serves tenants as much as shoppers, allowing its headline stores – which include Debenhams, H&M, Zara, Next, and M&S – to access their pages and tailor information about events and promotions.

“Retailers can actually log into the website with their own area and update their times, their text descriptions, they can post pictures of offers, which takes a bit of the legwork away from East Kilbride,” Torres explains.

“Then, East Kilbride will get a message saying ‘a shop has edited some content’ and they can go in and approve it and make sure it’s suitable, and then publish it on the site.”

In an app-happy world, it’s noteworthy to see a company steer away from sending www.shopping-centre.co.uk

push notifications and tracking shoppers, but Torres believes it is a saturated market.

“There’s a bit of kudos to having an app. I think that apps are good for certain things but, for shopping centres, I don’t think that they work at all. The majority of people aren’t going to download an app – it’s not worth the money or the effort. Every time you make a change to an app you have to run it past the app store and get it approved, which can take a while.

Senshi is more in favour of mobile responsive websites: it’s quicker, it’s easier, once you

update the website it updates it across all platforms, you don’t have to maintain two different systems. Mobile responsive websites are the way forward.”

Torres concludes: “It’s hard for East Kilbride in regards to the shopping offer in Glasgow in trying to entice [shoppers] across, but I think the Hub will help with that. It’s really got a lot going for it, we’re just hoping that the website will really emphasise that it’s a genuine destination centre and bring much more footfall to it, that’s the ultimate aim to it all.”

JANUARY 2017 SHOPPING CENTRE

10 DIGITAL MARKETING

Keeping customers snappy Geofilter technology can help Snapchat to turn a destination into a photo message snapsterpiece.

Snapchat, which has 100 million active daily users worldwide, has started offering businesses the option to give their location a bespoke Geofilter, to allow consumers in a specified area to add the filter to their Snapchat pictures and videos.

The a messaging app allows users to take a photo or video which they can then edit and send to friends, who can view the image for up to ten seconds, or post on their ‘story’ which can be viewed by a person’s contacts for 24 hours. In editing, users can overlay filters such as black-and-white or add stickers, or a geofilter.

Geofilters are special overlays for Snaps that can only be accessed in certain locations. This year, Snapchat opened up advertising to everyone with On-Demand Geofilters for businesses and events. Now, any brand or business can pay to play with customized geofilters. By selecting a particular location, along with a specific date and time, anyone who is in that area using Snapchat can see or use your custom filter. So, if you’re in the vicinity of a certain location — like the intu Trafford Centre or the London Eye — while you’re using Snapchat, certain geofilters become available for you to use.

When creating and uploading a design, you are asked draw your fence on a map. A fence encloses the area in which the geofilter will be available. The bigger the fence the bigger the cost. After your custom filter stops running, you’ll be able to see the Uses and Views in the ‘Metrics’ tab of your account. Uses is how many times it was used, while Views represent how many Snapchatters saw the filter in action.

“Too many brands are doing a bad job speaking to this audience,” comments Alex Bennett, senior manager of digital marketing at Nationwide. The banking group recently ran a snapchat campaign to target the next generation of customers, which included a tailored geofilter. “They are either not launching bespoke campaigns on social channels or stepping into having a dialogue with the next generation without thinking through what they actually want to say and it can come across as out-of-touch.” According to Bennett, the Money Stuff Snapchat campaign created a 15 per cent increase in brand awareness and a positive sentiment score of 99 per cent among its target audience.

SHOPPING CENTRE JANUARY 2017

“You could put out a beautiful piece of filmic content that is 90 seconds long and talks about the journey from student through to adulthood and even retirement,” says Bennett. “But this audience would prefer bite-size content so if you get the creative right, you can potentially do as much with a Snapchat filter as a 90 second film.”

Snapchat has a largely untapped marketing power that appeals to the potentially lucrative younger millennials. It is native advertising targeted to an audience based on time and location. Allowing brands and shopping centres to create and pay for custom Geofilters opens up every Snapchat user as a potential source of revenue for the company. It adds that subtle touch of customer engagement that, if the branded filter is designed well, shoppers are likely to add it to their snaps. At the same time, it also creates an entirely new source of content and creativity for its users.

www.shopping-centre.co.uk

E : V I S ED U L ND 017 C E 2 N I T an L J X AL ER E line: 30 F Dead F O New

14 COMMERCIALISATION

PITFALL PREVENTION TAKES PLANNING

Commercialisation of shopping malls has grown exponentially in recent years. Emily Wright, looks at the legal issues centre owners need to consider before attempting to cash in on mall space.

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hen it comes to commercialisation, the first decision is in relation to management: will it be the responsibility of the in-house team or outsourced?

If dealt with by the centre management team, they will need to ensure any occupiers are subject to controls to protect the centre and the shoppers’ experience. Owners should ensure they have final approval over the design of the kiosk or stand, and impose height limits to avoid impacting protected sight lines of other tenants. Controls over behaviour such as limiting noise or smell, or restricting activities such as food sampling to within a certain radius should be considered. It can also be worth agreeing wording to prevent aggressive selling or bad language.

A suite of precedent letting documents and licences can be prepared by lawyers to enable the in-house team to reduce delay, but flexibility in such documents is key. Incorporating a rolling break clause for the landlord is vital, as is ensuring any arrangement over six months is validly excluded from the security of tenure provisions of the Landlord & Tenant Act 1954.

What to charge the tenant should also be carefully considered. A rent inclusive of utilities, service charge and insurance will often be simplest, but ensuring any business rates are the responsibility of the tenant is becoming increasingly important.

If the commercialisation is to be outsourced, other matters SHOPPING CENTRE JANUARY 2017

come into play. Will this be for all types of commercialisation, or just one aspect? How much control will the centre have over the type of business brought in?

Centre owners may want to retain a veto over anyone they consider unsuitable or that might impact on exclusivity deals agreed with existing tenants. They should also be cautious over allowing an external company to conclude contracts on their behalf, with controls over the terms, or limits on how far the deal can progress before the owner becomes involved.

The key issue in outsourcing will be remuneration. Options include a retainer arrangement, profit share, or a combination of the two. With the latter, is this payable on anticipated income or actual profit? Whether commission is payable after termination of the agreement is important, and may differ where the contract ends by breach or expiry.

In all types of contract, provisions will need to deal with a situation where the extent of the centre is reduced or increased, or if the centre is sold, particularly if the arrangement covers more than one centre in the owner’s portfolio. Other matters including data protection and the impact of anti-bribery and competition law will also need to be considered.

Through careful management, commercialisation can be a boon for centre owners, increasing footfall and shopper dwell time as well as generating revenue.

Emma Wright Lawyer and retail property expert at law firm Cripps. www.shopping-centre.co.uk

15 COMMERCIALISATION

BRIDGING THE GAP Retail Merchandising Units give new businesses the platform to test the water

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or a small business, committing to a long term storefront lease can be a big gamble. Fortunately, thanks to the likes of pop-up and rotational retail, the risk is significantly reduced. Retail Merchanding Units – or RMUs – have long served as a cost-effective way for burgeoning retailers in getting out in to the public domain within shopping centres and town centres.

“An RMU typically offers traders a low-cost, flexible option, enabling new business to test their product in a retail environment and gain real feedback from their target audience,” says Paul Clifford, managing director of Space to Trade.

“This is usually the first step for a firsttime retailer in establishing their business before committing to a longer-term licence on a shop unit.”

Space to trade began working with Lamoure Jewellery in September 2014, when the company first set up on an RMU at Fareham shopping centre. Very soon, with some help from Space to trade, the brand evolved to a bespoke kiosk in the centre. Within two weeks of moving to the new kiosk turnover www.shopping-centre.co.uk

doubled, with more customers viewing the business as a permanent offer within the shopping centre. After just over a year, Lamoure Jewellery moved in to a shop unit and again sales increased, building on its established reputation at the centre.

Another entrepreneurial trader that has benefitted from launching with an RMU is Safia Khalid from Gravesend, Kent. Safia started her beauty business back in 2011, with a mall-based threading bar at the Ashford designer outlet.

Safia has since gone on to expand her beauty business with Space to trade, launching mall-based threading bars at Vancouver Quarter in Kings Lynn, the Westgate centre in Stevenage and the Dockside shopping outlet in Chatham.

She has also opened a bespoke mallbased, award-winning barbers at Fareham shopping centre; as well as bespoke barber units at the Pentagon shopping

centre in Chatham and the Orchards shopping centre in Dartford.

“Businesses like these do not become successful by luck alone,” says Clifford.

“Both the landlord and business owner need to be clear on how their goals align in terms of the offer and the centre strategy, from here a collaborative partnership can begin. Both these businesses benefited from having someone to help guide them on site with their business aspirations from unit design to product layout. Get the offer right and the revenue will flow as a byproduct and will be sustainable. As they say, success is a journey not a destination and our job is to support our business throughout their adventure.”

At the end of 2015, Space to trade teamed up with landlord Ellandi, Medway Council and Chatham Centre Forum to give one lucky entrepreneur the chance to win six months’ rent free trading at the Pentagon – a prize worth over £10,000.

The winner, Phil’s Retro Stuff, officially opened at The Pentagon shopping centre in February 2016, and after the six months free rental expired, Phil chose to continue to trade at the Pentagon.

Pentagon centre director Martyn Stone says: “The stall really complements the retail mix at the Pentagon.”

JANUARY 2017 SHOPPING CENTRE

16 COMMERCIALISATION

A DAY AT THE

BEACH Hammerson Engage puts sand in shoppers’ shoes at Brent Cross

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or the second year in a row, the Hammerson Engage commercialisation team has spared no expense in bringing a summery experience to their shoppers with the return of The Beach at Brent Cross.

Running throughout summer 2016, 350 tonnes of sand, 200 palm trees and events and attractions galore came to the popular London shopping centre.

The idea for the event is to offer the seaside experience without the pains of trains, planes and overpriced accommodation. “Travel is now expensive and the roads crowded and so recognising the difficulty in taking families to the coast, we have decided to bring the coast to you,” a Hammerson representative explains.

“What better place to enjoy everything the coast can provide apart from the sea and the odd ship sailing past than at London's first-ever major shopping centre?”

The event is masterminded by Hammerson Engage, a new online platform by the property company which aims to make it easier for brands by offering a range of opportunities within its 12 prime retail locations across the UK. Whatever the goal – launch a new product or concept, take advantage of peak SHOPPING CENTRE JANUARY 2017

shopping seasons with a pop-up store, hand out samples, gain more exposure locally or simply expand an existing business – Hammerson Engage aims to make the process as smooth as possible.

“Our commercialisation team have been focussed on centre activity that not only generates income, but also provides that extra, often unexpected experience for shoppers,” says Fay Rajaratnam, corporate communications executive at Hammerson. “In order to reach more brands that are both online and physical, established and start-ups, [Hammerson] has recently launched its new website, hammersonengage.com, making it easier for the team to work with all kinds of retailers and restaurateurs.”

Hammerson Engage believes that with businesses and brands increasing their focus on strategic customer acquisition, shopper engagement is an important means of achieving this key objective.

The company claims that face-to-face shopper engagement can provide a bigger impact than some other tactics and allows businesses and brands to be more strategic with their objectives.

“Brand awareness remains a prevalent choice tactic for consumers

inexperienced in buying a product or service,” says a Hammerson spokesperson.

"Building brand awareness can increase market share in a number of ways. At Hammerson Engage, we can help bring your brand or business to the forefront of consumers’ minds when it’s time to make a decision to purchase.”

Rajaratnam says The Beach at Brent Cross is a key example of this. “To create The Beach at Brent Cross, the commercialisation team transformed the esplanade in front of the centre with a sandy beach, featuring palm trees, traditional seaside entertainments, tiki huts and oversized deckchairs,” she explains. “The aim was to create an event where the whole family could enjoy a summer beach experience without having to leave the city.”

The event was a “resounding success” according to Rajaratnam. “The beach succeeded in attracting a huge amount of shoppers to sunbathe and enjoy the sun in North London, providing the public with a fun and accessible summer day out on their doorstep. Opening hours had to be extended to accommodate the event’s popularity.” www.shopping-centre.co.uk

20 COMMERCIALISATION

GO ING MOBILE Gift cards are adopting new sales channels to drive increased sales

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hopping centre gift cards are growing in popularity, helping to create brand awareness for centres, drive incremental spend for retailers and attract footfall in shopping centres. Flex-e-card realises the need to develop and adapt sales channel strategies to continue maximising gift card sales.

In Christmas 2014, Flex-e-card launched the first mobile till device that allows gift cards to be securely sold anywhere in the centre. This pioneering solution streamlines the sales process by scanning the gift card QR code, adding the value the customer wishes to purchase, processing payment using a fully integrated and secure credit and debit card device and completing the sale with an optional receipt printed via a Bluetooth printer.

The mPOS application was deemed a great success throughout the peak Christmas season. The mobile technology was an effective tool for queue busting during the busy gifting season therefore decreasing customer pain points and improving the shopping experience. Based on user feedback, Flex-e-card further developed the application to include features that enable the sale of sundry items and contactless payment. The application also has an enhanced facility offering bespoke designs tailored to the shopping centre client.

Working in partnership with the owners of the world’s largest shopping centre, SHOPPING CENTRE JANUARY 2017

Emaar, the mPOS gift card application was introduced to The Dubai Mall. To accommodate the demand of the gift card product within the region, the application was redeveloped to facilitate sales across Emaar-owned hospitality and leisure locations throughout Dubai.

The mobility of the solution allows the customer service team to roam the mall and capture sales away from designated service points.

Flex-e-card’s general manager, Neil Wake, says: “This cutting edge technology supports gift card sales and provides an enhanced customer experience within centres. As an organisation we invest heavily in new technology to support our fast-moving clients and customers, ensuring we continue to offer a first class service in all aspects of our gift card programme.”

The application is easy and straightforward to use, offering an innovative alternative to traditional sales channels for centres. The mPOS till

system has rolled out across all intu and Westfield centres in the UK. Flex-e-card offers a range of bespoke gift card sales solutions to shopping centres. Along with the mPOS application, clients can benefit from fully integrated ePOS till systems, self-service kiosks and full e-commerce services.

The focus on technology provides new incentives to adapt and grow. Flex-ecard is continuously striving to enhance and add to its product suite of sales channels.

Flex-e-card is a market leading shopping centre gift card provider, working with over 120 shopping centres across the UK, Europe and United Arab Emirates. Over the past five years the organisation has grown rapidly with international expansion into Poland, Italy, Finland, Republic of Ireland and Dubai.

A key focus of the business is to bring innovation and technology both in centre and across digital platforms to maximise omni-channel sales. www.shopping-centre.co.uk

22 COMMERCIALISATION

ADVERTISING ADVANCES Advertising income is a growing part of the commercialisation mix, and technology is opening up new opportunities for owners and advertisers alike

T

he out-of-home (OOH) advertising sector has grown 250 per cent in the past 10 years to reach annual sales of £2.5bn, according to Land Securities’ commercialisation director Richard Isom, and digital sites are the fastest-growing part of that sector, now generating £360m.

However Richard Malton, group marketing director at Ocean Outdoor, points out that the majority of digital sites are still being used to deliver a standard poster rather than taking advantage of the technology’s full range of possibilities. He says the challenge has been to “engage with the creative community to get them to use digital’s capabilities to the full.”

Slowly, though, there are signs of change.

“The creatives are catching up with the technology,” he says, “and they’re starting to push us in terms of screens, connectivity and so on.” For example, he points to a campaign at Westfield which recognises the type of car waiting at the lights outside the centre and delivers an ad targeted to that particular car. And last year Ocean broadcast fashion shows from London Fashion Week live into malls, driving traffic increases in the sponsors’ stores.

Matthew Leggett, director of retail at JC Decaux, believes the adoption of bigger and higher-quality screens will increase take-up of these creative applications.

“The 80-inch HD screen is now standard in malls, and we’re moving towards UHD and 4K screens,” he says. “Already, 95 per cent of JC Decaux’ mall sites are digital.”

The company’s large-format M-Vision network is growing, with Centre:mk and Cabot Circus the latest installations.

As important as the screens are, SHOPPING CENTRE JANUARY 2017

Leggett believes it’s the technology sitting behind them that is going to drive the effectiveness of digital advertising.

“We’re already using insights from CACI to tailor ads for malls that under- or overperform in a specific sector,” he says.

The system, called SmartBRICS, allows advertisers to ‘turn up’ or ‘turn

down’ the frequency their ads appear to focus on the times when their target customers are in the mall, rather than just showing ads on a standard loop. “It’s using personalisation to drive relevance,” Leggett says.

On Tesco’s sites JC Decaux is able to use Dunnhumby’s analysis of Clubcard data to deliver specific ads to Tesco stores on the basis of what is, and what

isn’t, selling there.

Obviously shopping centres don’t have access to the depth of data on customer behaviour that Tesco enjoys, but Leggett says JC Decaux is working on a solution, using Telefonica’s customer profile data, that will be rolled out in 2018. “If you use data to drive displays outside key retailers you will drive sales, he asserts.

Landlords are increasingly aware of the potential of mall advertising both as a revenue stream and as a means of driving customer engagement. David O’Neil, head of commercialisation at Hammerson, says: “As shopping centres become lifestyle destinations, OOH advertising increasingly makes a vital contribution to the consumer experience.”

With this in mind Hammerson has extended its outdoor advertising contract with mall media specialist Limited Space for the next five years. The contract covers eight malls including premier locations such as Bullring in Birmingham and Cabot Circus in Bristol and the sites available within Hammerson’s portfolio will provide advertisers with access to more than 140 million shoppers every year.

Under the terms of the deal Limited Space will have the rights to manage a network of advertising formats including Adlift, lift door advertising sites placed in prominent mall locations, Panoramic sites, advertising on the back of mall lift shafts and hanging central mall banners.

Limited Space CEO Matt Gordon says: “Having worked with the company for more than ten years now, we understand what is required to seamlessly integrate these unique advertising formats into the customer experience and enhance it.” www.shopping-centre.co.uk

23

PICCADILLY LIGHTS It’s a rare property investment where the commercialisation income matches the property rents, but Land Securities’ Monico site on London’s Piccadilly Circus comes close because its facade houses one of the UK’s most iconic landmarks and a globally-recognised advertising space.

However the famous screens are to go dark for six months from January 2017 to undergo a redevelopment that will give new brands a rare chance to secure a sought-after spot. Land Securities has worked with Ocean Outdoor to secure permission from Westminster City Council for the upgrade, which will see the existing screens replaced with Europe’s largest single digital screen.

The new screen will retain its renowned curved shape, surface area and its ability to have a patchwork appearance. Advertisers will be able to take advantage of the screen’s ability to rotate between six full-motion sections, which will be shared, while also having the chance to harness brief single-brand takeovers of the complete screen.

Tim Bleakley, CEO of Ocean Outdoor, says: “Piccadilly Lights is one of the world’s most sought-after advertising sites, and this transformation takes it to the next level. We understand the need to protect its heritage while keeping ahead of trends, and this next phase will ensure it is a testament to London’s global reputation for defining invention and innovation.”

The new Piccadilly Lights is due to be unveiled in autumn 2017. In the meantime, a static advertising banner featuring the signed brands will be in place.

24 SUSTAINABILTY

KEEPING

TRACK Using half hour metering to track when you are spending the most on energy is key to cutting costs.

L

ast month, Shopping Centre featured Powerstar’s Virtue energy storage solution, and the benefits it can bring to shopping centres by increasing revenue. Having a largecapacity energy storage solution is only one piece of the puzzle when it comes to keeping costs low, with one of the biggest factors being able to monitor up-to-the-minute information on how much energy is being used, which is where metering comes in.

Half hourly metering is mandatory for all businesses with a supply greater than 100kW. It gives accurate information about how much energy is being used through an electricity meter that is automatically read every 30 minutes of the day.

This information is automatically retrieved from the meter and passed directly to the contracted energy supplier, ensuring that energy bills are accurate and that users are only billed for the consumption that is used.

The meters are linked to a communications device that allows the data to be accessed remotely. By using this data in conjunction with monitoring and targeting software, it is possible identify ways of making significant energy savings and carbon reductions.

For larger energy users, the cost of electricity changes over a day largely as a result of network charges. Lowest costs are during the night, peak costs are during an early evening in winter. The Distribution Use of System (DUoS) charges give non-domestic users an incentive to reduce energy demand at SHOPPING CENTRE JANUARY 2017

peak times. These costs vary regionally and are most expensive where our networks are most constrained, such as in parts of Scotland and the south west of England. Compared to an average annual total unit price of 9-10p/kWh, DUoS charges can increase prices by more than half to as much as 16p/kWh at peak times for small industrial users.

This is where energy storage comes in. Energy storage provides an opportunity for end users to benefit by charging batteries during times of low demand/cost and using the energy during more expensive times.

“Today there’s a wide range of technologies available from batteries to pumped hydro, and from hydrogen to flywheels and compressed air,” says WSP Parsons Brinckerhoff, one of the world’s largest engineering professional services consulting firms. “The next decade will see rapid deployment of lithium ion battery technology across homes, factories, offices and vehicles. Financial incentives and improved technology efficiency will complement the larger work on storage already being delivered by network operators.”

WSP adds: “In the future, consumers will begin to see energy costs being directly related to the site’s level of consumption during peak times. Introduced regulations mean that a greater number of consumers will be using half hourly meters with costs more directly linked to the time of consumption rather than a deemed profile of usage.” www.shopping-centre.co.uk

25 SUSTAINABILTY

KEEPING IT GREEN With more than 20 UK shopping centres winning accolades at this year’s Green Apple Environmental awards, what does it take to be a winner?

T

he annual Green Apple Environmental Awards, which recognise, reward and promote environmental best practice around the world, recognised a host of local and national initiatives by shopping centres.

JLL-managed centres won 13 of the awards for the work they have undertaken on carbon reduction, boosting energy and lighting efficiency and improving waste efficiency and Andries van der Walt, head of sustainability for property and asset management at JLL, says: "Securing 13 Green Apple Awards across such a wide spectrum of projects and initiatives is testament to the depth of JLL's commitment to sustainability, the quality of our staff and the innovation that we bring through our approach to property management."

Fremlin Walk shopping centre in Kent was crowned Property Management National Green Champion at the Green Apple awards for a three-part initiative which looked at improving practice in www.shopping-centre.co.uk

energy efficiency, green travel and waste disposal.

The project aimed to promote a culture of sustainable awareness amongst the shopping centre’s employees, retailers and customers by providing information and training where applicable, to all users of the centre, initially as a three-month trial before conversion into a long-term strategy. A Green Team was formed by a combination of centre staff and retailers, who explored the various ways in which it was felt that the centre could make the biggest impact.

The team at Touchwood shopping centre in Solihull is also celebrating after winning for its Environmental Treasure Hunt, which saw all members of the team, along with retailer representatives, tasked with exploring the centre to find new areas in which sustainability could be further improved.

General Manager Andy Cole says: “Our Environmental Treasure Hunt proved a great success in helping to identify additional

ways in which we can further improve our sustainability and some of these have already been implemented. We look forward to going on the next hunt to see what other energy savings we can find.”

Manor Walks in Cramlington was selected for its bio-diversity initiatives which include planting flowers and shrubs to encourage wildlife and bees to take up residence at the centre.

A beehive and bug hotel has been housed at Manor Walks to populate the centre with bees and insects to pollinate the plants, and bring wildlife to the shopping park. More water butts have also been introduced to the centre to recycle rainwater for reuse.

The Green Apple awards, which take place every year, are organised by The Green Organisation, an international, independent, non-political, non-profit environment group dedicated to recognising, rewarding and promoting environmental best practice around the world.

JANUARY 2017 SHOPPING CENTRE

26 SUSTAINABILTY

F

or decades, food waste has been a cause for concern across the United Kingdom. The hospitality and food service industries are alone producing close to 3.5m tons of food waste a year, of which almost 2m tons ends up in landfill, so it is easy to see why it has become an issue that has drawn substantial attention, including that of the government.

And it’s an issue that affects everyone. When food waste is disposed of in a landfill, it releases damaging greenhouse gases and leachate, a toxin capable of considerable groundwater pollution.

Climate change is a serious subject and in order for the UK to meet international targets on climate change, by lowering greenhouse gas and diesel emissions, and meeting obligations under the European Landfill Directive to reduce biodegradable waste going to landfill, the industry needs accurate information on waste and food waste in particular. This data is vital in helping government and environmental agencies implement the efficiencies required to drive significant change.

One solution for segregating food waste at its source, diverting it from landfill, reducing diesel emissions and providing, to the kilogram, accurate data on the food waste being generated, is emerging through a technology recently introduced into the UK market.

In October 2015, BioHiTech Global announced the creation of BioHiTech Europe, a UK-registered subsidiary, to introduce

Eco-Safe Digester technology to the UK and wider European markets. The clean-tech product offers a new data-driven solution for food waste disposal that effectively, economically and responsibly disposes of food waste.

Alex Giacchetti, president of BioHiTech Europe, explains that in the early days the company focused on research & development and getting the technology optimised. “In the last five or six years we’ve developed a commercial product that works. That was quite a stepping stone for us. Then in October last year, we set up BioHiTech Europe. We thought we’d use the UK as the first market to start.”

The company’s Eco-Safe Digester is an on-site aerobic digester that uses natural microorganisms to digest food waste and convert it into nutrient-neutral water, which is disposed of through a standard sewer line.

The Eco-Safe Digester is equipped with built-in load sensors that automatically weigh the food waste each time it is added, determining where, when, and how much food waste is being disposed. The BioHiTech Cloud simultaneously monitors key metrics delivering accurate volume and environmental reports to help businesses understand what is being wasted and how to reduce and eliminate their waste.

The BioHiTech solution combines on-site disposal technology with big data to divert the waste and provide the tools to optimise the food waste disposal process.

EASY to

DIGEST

Waste management specialist BioHiTech Global increases shopping centre sustainability

SHOPPING CENTRE JANUARY 2017

www.shopping-centre.co.uk

27 SUSTAINABILTY

Reducing waste and minimising greenhouse gas emissions are undoubtedly important goals, but the digester can achieve more than that, says Giacchetti. The Eco-Safe Digester is saving UK businesses money, increasing revenues, and providing them with a competitive advantage while improving their operating efficiency.

And its not just operational cost savings – sustainability generates top line value too. Research indicates that when customers are presented with the choice of similar shopping, dining or hotel options, they tend to pick the one they perceive as more sustainable.

White Rose shopping centre in Leeds installed an Eco-Safe food waste digester in November 2015 to increase the sustainability profile of the centre and secure significant cost savings.

The model Eco-Safe 12 unit, designed to digest between 300 and 1,090kg of food waste during a 24-hour period, was installed in the centre’s waste room adjacent to the main food destination.

It converts food waste into water, which is conveniently and safely discharged to a standard drain. The digester is connected to a settlement tank to recover any fat, grease or oils.

The centre’s facility managers report that their wet waste disposal costs have reduced by two thirds from their pre-EcoSafe Digester days when costs were over £4,000 per month.

Almost all food waste generated on site is now diverted to the Eco-Safe Digester system.

www.shopping-centre.co.uk

Key to all food waste onsite being diverted through the digester, is that waste that had been compacted as general waste, including food waste, has now been eliminated.

Cardboard and DMR (Dry Mixed Recycling) waste is easily being segregated and is now clean from food contamination, allowing the centre to generate income from the clean cardboard, and the DMR waste is now collected at half the price compared to what was previously paid for general waste to be collected. The general waste proportion has been reduced from 56 per cent to 8 per cent.

In addition to reducing its waste food removal costs, the White Rose centre reported considerable additional benefits including: improved recycling and reduced general waste, improved cleanliness, reduced spillages and spilt bags, no slippery floors, no smells, no flies or vermin, reduced manual handling, improvements to health & safety and cleaner corridors.

On top of the environmental and economic advantages of onsite food waste digestion, users are also provided with detailed live data to help support their efforts to improve efficiencies. The reporting by restaurant feature from the BioHiTech Cloud enables the centre to measure and monitor individual tenants’ food waste and raise awareness in order to work with retailers to reduce food waste and improve recycling.

Since installation, the digester at White Rose has been viewed and followed by a number of shopping centres across the country with the roll-out process now underway to other shopping centres and retail parks as part of their strong sustainability initiatives.

“These guys have taken their first machines over the last 12 months and we’re getting to the point now where the conversations we’re having with them are developing quite nicely because they’ve now been able to see the results of the technology,” says Giacchetti.

Since White Rose shopping centre has been able to prove the effectiveness of digester technology in improving waste separation and recycling rates, Market Place Bolton, Victoria Gate in Leeds and Westfield Stratford City in London have all adopted the technology, with a strong pipeline of other shopping centres and retail parks about to come on board with this disruptive technology.

The proof is in the numbers. In the past 12 months White Rose, Market Place, Victoria Gate and Westfield Stratford have diverted a combined 190 tonnes of food waste, translating into an equivalent saving of: 29.7 waste trucks off the road, 159 cubic metres of landfill space, 148 metric tonnes of Carbon Dioxide equivalent, and 62,773 litres of fuel, which is the equivalent of travelling 624,519 miles or 1,500 trips between Edinburgh and London.

JANUARY 2017 SHOPPING CENTRE

28 SUSTAINABILITY

+ WELLBEING HEALTH

Feeling good often equates to doing more. This is not just true to home and work environments, but is something that can also be applied commercially to shopping centres, say Chris Church and Alan Somerville.

A

ll too often we are left frustrated by shopping – loaded down with bags in a stuffy environment, eagerly awaiting the moment when we get to step back out into the fresh air. Perhaps it is then unsurprising to find that there is a body of compelling evidence that suggests there is a link between green building, enhanced health and wellbeing, productivity and retail sales.

Interest among retailers for health and wellbeing has been growing in recent years, with two publications from the World Green Building Council (WGBC) paving the way - ‘The Business Case for Green Building’, and the more relevant ‘Health, Wellbeing and Productivity in Retail’ published this year.

Biophilic design is key to this emerging trend. This type of design is psychologically soothing – as humans we have evolved in the larger context of the natural environment, and we have developed to respond to natural surroundings. Access to daylight helps to regulate the body’s circadian – or in

layman’s terms our natural – rhythms.

This in turn benefits our immune system and neurological functions – reducing stress and boosting productivity.

While research specific to shopping centres is lacking, evidence suggesting consumers are likely to spend more in stores or shopping centres with strategically situated biophilic design elements is there. For example, a study

by Walmart found that sales per sq ft were significantly higher for departments located in the daylight-lit sections of their stores. A similar study by Wolf (2005) found that consumers react positively to retail areas with large trees and welltended streets, with evidence showing that shoppers would dwell for longer and visit more regularly. Similarly, research findings by the International Council of Shopping Centers points to open-air lifestyle centres and malls performing better than traditional covered shopping centres.

The growing body of evidence provides an opportunity for the shopping centre industry to look more closely at the

shopping environments they curate, deploying ‘Retail Metrics Framework’ tools to analyse the environmental, experiential and economic impacts.

Quantitative data can be collected via sensors, which are becoming increasingly inexpensive and reliable, while qualitative data can be collected via perception surveys and site walks.

What advice do we then have for shopping centres? For new schemes it should be considered in the early concept and design stage. For existing schemes, data collection should be undertaken to help guide decision making, to better understand the current situation of staff and customer perception.

In the fast-paced modern retail arena, where the shopping environment is critical to support and drive sales, the shopping centre industry must embrace health and wellbeing, in order to stay ahead of the curve. Then, shopping centres will not only see increased sales, but also enhanced reputation, improved customer satisfaction and boosted staff productivity.

Chris Church is an associate in retail asset services and Alan Somerville is director and head of energy in infrastructure & sustainability EMEA at Cushman & Wakefield.

SHOPPING CENTRE JANUARY 2017

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30 DATA

Investment volumes collapse Shopping centre investments are at their lowest for seven years, according to Knight Frank research. In what Stephen Springham, partner and head of retail research at Knight Frank, describes as an “annus horribilis for the shopping centre investment market” sales volumes have fallen by 28 per cent yearon-year, to their lowest level since 2009.

Springham pointed out: “These bare stats become worse when one considers that of the £3.05bn transacted, just four deals comprised over half of the total, these being: Merry Hill, Grand Central Birmingham, Liverpool One and Edinburgh St James.”

The final quarter of 2016 saw four notable deals with Intu Bromley fetching £236m reflecting a 6.00 per cent yield;

The Mall, Camberley selling for £86m off 5.90 per cent and Observatory and Queensmere, Slough, achieving £130m reflecting 5.00 per cent. Delancey’s 50 per cent stake in Southside, Wandsworth is currently under offer to Invesco for

£147.5m showing a 4.50 per cent initial yield.

Springham said a major factor in the low transactional volumes has been the Brexit vote, with concerns over the outcome contributing to low volumes during the first half of the year and most investors taking a cautious ‘wait and see’ approach in the second half of the year.

Knight Frank says prospects are little better for 2017 with a similar political backdrop likely in the early part of the year and economic uncertainty suffocating investment volumes.

The government could deal a further blow to the market with plans to abolish the Public Works Loan Board which would stymie local authorities’ ability to acquire property, limiting one of the main sources of shopping centre investment in recent months.

Irish retail rental growth slowing Irish retail property rents are entering a phase of slower growth according to a new report from Savills Ireland. Nonetheless increases of between 7 and 10 per cent are predicted over the next two years.

Dr John McCartney, director of research at Savills Ireland, said: “Rents in some prime shopping locations have already risen by more than a third over the last three years. As the retail economy transitions from its early recovery phase to a sustainable growth phase, base effects are inevitably going to dampen the annual percentage increase in rents.”

According to MSCI data rental growth on Dublin’s prime Grafton Street eased SHOPPING CENTRE JANUARY 2017

from 21.8 per cent pa in Q1 of 2016 to 19.2 per cent in Q2 before slowing more sharply to 14.1 per cent in Q3.

Savills believes this derives from base effects and, perhaps, the temporary impact of political uncertainty on consumer

confidence. However, Savills research shows that employment is by far the strongest leading indicator of retail rents in the long run. With jobs growth of 2.9 per cent in the last year retail rents are therefore expected to continue rising – albeit at a slower pace. Savills econometric model forecasts rental growth of just under 10 per cent in Grafton St. by Q2 2018 while, in less prime markets, rents should rise by around 7 per cent.

Demand from international retailers remains strong, evidenced by the forthcoming openings of & Other Stories and Victoria’s Secret on Grafton Street, in addition to the new Top Shop flagship store in the Jervis shopping centre. www.shopping-centre.co.uk

31 DATA

Rates threaten business survival Over half of property directors believe that the current rates revaluation will force companies out of business, according to a survey organised by Avison Young at the recent Property Directors Forum.

Attendees at the event were asked to provide their thoughts on a number of topics affecting the property industry. The majority of respondents considered that the rating revaluation would result in some big changes to the sector with expectations of business closures, relocations, growth of online and death knell for town centres.

More than half of those surveyed thought that the business rates revaluation would mean that companies would be forced out of business, 48 per cent considered it likely that companies would be forced to relocate to areas with lower rating assessments and 44 per cent said that they expected that more businesses would move online and that, as a result, town centres would experience further decline.

In addition, almost a quarter of the respondents (22 per cent) said that they would be changing their own property plans as a result of the rates revaluation and that their plans would include consolidation and agile working. Over half of the property direc-

tors surveyed said that they had not yet registered a business rates appeal.

The survey also revealed that almost half of the property directors considered landlords to have become more aggressive and assertive over the last six months with a quarter of them having seen a drive to increase rent and, perhaps as a result, around 75 per cent of property directors are being proactive over rent reviews.

Avison Young’s Jason Sibthorpe said: “What is made crystal clear by this survey is that the business rates revaluation is a major issue with occupiers, to the extent that it is having a material effect on prospects for companies up and down the country.

“The survey of property directors also revealed that the chancellor’s Autumn Statement is expected to have very little impact and that businesses are waiting for the impact of Brexit negotiations. 82% of the respondents predicted a tough year ahead – with 27% of them saying that it would be ‘significantly so’.

“Almost three times as many property directors thought that Brexit will cause a decrease in demand for commercial property in the UK than those that expect an increase.”

Out-of-town demand holds up According to Savills’ latest bulletin, retailer demand, particularly from the bulky good sector remains strong in established centres across the UK, with some retailers in this segment of the market reporting double-digit like-for-like sales over the course of 2016.

While such strength might seem counter-intuitive in the face of rising import costs and wages, Savills says it is clear that the best brands at all price points are trading well and profitably, and they expect this to continue into 2017.

Following on the heels of Tapi's launch in 2015, this sector has seen the return of another industry legend in the form of www.shopping-centre.co.uk

DFS founder Lord Kirkham and his new brand Fabb Sofas. The first store is now open in Southampton, with a further five stores already acquired and several more under offer. Typical store sizes for this national roll-out are 20-35,000 sq ft. The other recent new entrant to the bulky goods sector is Natuzzi, which has opened 5,000 sq ft stores in Thurrock and Brent Cross.

Perhaps the most exciting new requirement is IKEA, which has opened new format stores in Norwich and Aberdeen.

These stores range in size from 2030,000 sq ft and are designed to complement the existing larger format stores.

The story is less positive in clothing,

where tenant demand for new stores remains weak. Next's fashion-only fascia continues to selectively seek new units in catchments where it is not represented. Other active clothing retailers in the retail warehouse market include Primark, which is continuing to open 25-32,000sq ft stores, and Fat Face, which now has four 5,000-sq ft stores on retail parks across the country.

“We remain convinced that retail warehousing is a strong offer both to retailers and shoppers in a multichannel world, and the further growth of click and collect, returns and showrooming will continue to support retailer demand in this sector,” Savills concludes.

JANUARY 2017 SHOPPING CENTRE

Find out more about these suppliers Visit: shopping-centre.co.uk/directory Tel: 01293 416090 Email: trudy.whiston@jldmedia.com

32 PRODUCTS & SERVICES ACCESS

PARKING

ARCHITECTURE & DESIGN

CLEANING & MAINTENANCE

Portland Design

Seasonal Transformations

0207 017 8780

01483 799 944

www.portland-design.com CAR PARK GUIDANCE AND MANAGEMENT

www.seasonaltransformations.com COMMERCIALISATION

Swarco

Vileda

0174 882 4624

0845 769 7356

www.swarco.com

www.vileda-professional.com/en-GB/

Christmas Creations

Clearhill

0203 411 1991

02840 622028

www.christmas-creations.com

www.clearhill.com

Decx

Destination Space

01773 835552

0161 743 4644

www.decx.co.uk

www.destination-space.com

Fizzco Projects

Forum CentreSpace

01427 666029

0191 226 8844

www.ďŹ zzcoprojects.co.uk

www.forumcentrespace.co.uk

Gala Lights

Shoppertainment Management Ltd

01622 882424

0161 817 5294

www.galalights.com

www.shoppertainmentmanagement.co.uk

JB Display

Space & People

01274 563506

0845 051 8645

www.jbdisplay.co.uk

www.spaceandpeople.co.uk

Millennium Quest

Space to Trade

01622 675422

028 406 60138

CHRISTMAS SERVICES

www.millenniumquest.co.uk

www.spacetotrade.co.uk CUSTOMER COUNTING

MK Illumination

Intelligent Counting

01254 778 670

0118 932 4660

www.mk-illumination.co.uk

www.intelligentcounting.com CREATIVE DESIGN

SHOPPING CENTRE JANUARY 2017

RED i Design & Display

Fran Raybould

01821 670544

01743 242485

www.red-i.co.uk

www.fracreative.com

www.shopping-centre.co.uk

Find out more about these suppliers Visit: shopping-centre.co.uk/directory Tel: 01293 416090 Email: trudy.whiston@jldmedia.com

33 PRODUCTS & SERVICES ENTERTAINMENT

Coinfactory

Vehicle Control Services

0161 633 2298

0114 261 7111

www.coinfactory.co.uk

alunc@excelparking.co.uk PAY-ON-FOOT PARKING SYSTEMS

FACILITIES MANAGEMENT

Corpor@te Facilities Services Ltd

DESIGNA

02380 465 625

01932 784040

www.corporatefacilitiesservices.co.uk HEALTH & SAFETY

www.designa.co.uk PHOTO BOOTHS

Shorguard

Photo-Me International

01959 571 788

01372 453399

www.shorguard.co.uk

www.photo-me.co.uk

MANAGEMENT SERVICES RADIO COMMUNICATIONS

Shopping Centre Mangement

DCRS

01372 386983

0800 043 2688

www.shoppingcentremgt.co.uk

www.dcrs.co.uk – www.mototrbo.co.uk RESEARCH

MARKETING

Shoppertainment Management Ltd

Latimer Appleby

0161 817 5294

01273 648 335

www.shoppertainmentmanagement.co.uk

www.latimerappleby.com

JFR Promotions

Spring-Board Research

0161 440 7035

0845 359 2835

www.jfr.net PARKING

www.spring-board.info SECURITY

ANPR International

VSG

0114 261 7111

01604 744000

alunc@excelparking.co.uk

www.vsg.co.uk SHOPPING MALL WIFI

Excel Parking

Inkspot Wifi

0114 261 7111

0131 556 4034

alunc@excelparking.co.uk

www.inkspotwifi.co.uk SIGNAGE

G24

Sign Options

0870 0427215

01254 695550

www.g24.co.uk

www.signoptions.co.uk TENANT LIAISON

Parkeon Lmited

Toolbox Group

01202 339494

01359 250 208

www.parkeon.co.uk

www.toolboxgroup.global WASTE MANAGEMENT

Q-Park UK

Compact & Bale

0870 442 0104

01732 852 244

www.q-park.co.uk

www.compact-and-bale.com

Scheidt & Bachmann UK Ltd

Orwak Environmental Services

01372 230 400

0800 169 3534

www.scheidt-bachmann.com

www.orwak.co.uk

UKPC 0333 220 1030 www.ukparkingcontrol.com

www.shopping-centre.co.uk

JANUARY 2017 SHOPPING CENTRE

Features Schedule 2017 January Commercialisation Maximising non–rental income Sustainability Efficient energy and waste management

May

September

Marketing Powerful tools to extend reach F&B/Leisure Adding diversity to the tenant mix

Parking Quarterly review Customer Analysis Tracking shopper behaviour Ireland All Ireland retail property survey

February

June

October

Christmas Planning ahead for a successful festive season F&B/Leisure Adding diversity to the tenant mix

Parking Quarterly review Sustainability Responsible shopping centre investment

Commercialisation Maximising non–rental income Sustainability Efficient energy and waste management

March

July

November

Parking Parkex preview Security Securing the shopper experience Ireland All Ireland retail property survey

Commercialisation Maximising non–rental income Cleaning Minimising hazards and improving appearance

Marketing Powerful tools to extend reach F&B/Leisure Adding diversity to the tenant mix

April

August

December

Commercialisation Maximising non–rental income Customer Service Putting the shopper first

F&B/Leisure Adding diversity to the tenant mix Security Securing the shopper experience

Parking Quarterly review 2017 Preview Looking ahead

GRAHAM PARKER Editor 07956 231078 gparker@55north.com

IAIN HOEY Editorial Assistant 0141 222 5385 ihoey@55north.com

TRUDY WHISTON Sales Manager 01293 416090 twhiston@55north.com

35 PEOPLE / MOVES

Ellandi and Workman go back to the shop floor Community shopping centre investor Ellandi and property manager Workman went back to the shop floor to help their independent retailers through the busy Christmas period.

Mark Robinson, property director at Ellandi, said: “2016 has been all about independents retailers at Ellandi and we wanted to build on our #Indi2016 campaign where we have promoted a new independent trader every day.

Back to the floor allows us to work alongside and listen to our occupiers; it was doubly appropriate being the day before Small Business Saturday.”

The day saw 30 property professionals work in 30 independent shops, providing an extra pair of hands and gaining an insight into how independent retailers trade during the festive period.

Ellandi’s managing director, Morgan Garfield added: “I was placed in Precious Thoughts at the Mercury Mall in Romford. Alongside pricing up cards and working behind the counter, I also had a good chat with the owner and as an outcome, we will be working closely with the retailer to provide additional support.”

The campaign has been fully supported by Revo, with chief executive Ed Cooke commenting: “Ellandi’s campaign supporting independent retailers is wonderful and we’re delighted to help. This campaign really shows how the retail property sector supports local entrepreneurs, the risk-takers who fuel new ideas. Also, crucially, these new businesses are the lifeblood of retail and lead to vibrant places to live, work and shop.”

Capitol comes top for Welsh hospitality Cardiff’s Capitol shopping centre has been named Shopping Complex of the Year for its hospitality at the first Welsh Hospitality awards. The mall, owned by NewRiver and managed by Workman Retail, was shortlisted by the public over the past few months and the winners

were announced at a presentation ceremony at the Mercure Cardiff Holland House Hotel.

Centre manager Charles Barratt said everyone connected with the centre was proud and delighted and felt the award recognised its work with a large number

of charities, groups and organisations who used the mall’s facilities throughout the year.

He said it was also a tribute to the increased number of free events held in the mall and greater involvement by the retailers.

This month’s moves . . . management, taking the reins from IAN JONES, who JLL has appointed NICK HART as an international director in its UK after 10 years in the role, will now be concentrating on retail capital markets team. He joins from Savills where his position as chief operating officer. he established and led the retail Investment team. He has 22 years’ experience in the shopping centre investment CUSHMAN & WAKEFIELD has appointed SUE BOOR as head of market, transacting over 133 shopping centres worth marketing for the £240m Lexicon Bracknell retail and £7.5bn. leisure project. She joins from M&G Real Estate, where she was head of marketing for Manchester Arndale and REDEFINE INTERNATIONAL has recruited MATTHEW BADDELEY as prior to that she launched the Mall at Cribbs Causeway. senior retail asset manager. He joins from the Crown estate, where he was retail asset manager for the £2.5bn SHELLEY SANDZER has appointed WILL BISHOP to regional portfolio. Prior to this, he spent over seven years its professional services team as a graduate surveyor, with Savills specialising in out of town retail investments. working on rent reviews and lease renewals.

LEE BARON has promoted MARK FITZGERALD to head of property

www.shopping-centre.co.uk

JANUARY 2017 SHOPPING CENTRE