Adaptation of the Retail Investment Market in the UK: Asset management strategies and tactics deployed by owners in response

The retailing industry in the UK is undergoing an unprecedented level of structural change. The impact on retailers, seen through administrations, CVA’s and redundancies has often dominated headlines, along with directly linked impacts on local economies. Less attention has, however, reflected on the implications for property investors and how they are dealing with these challenges. Understanding how and where owners are responding, what strategies they are pursing - are they innovative or tweaks on previous practice, and do they reflect ‘sticking plaster’ approaches or something more robust and durable? - is critical to understanding where the retail market goes from here. This paper, based on a wider study covering various aspects of the transformation of the retail property market, used a qualitative research approach generating primary data through semi-structured interviews across a range of real estate professionals. The findings span the period prior to and during the first year of the Covid-19 in 2020. It examines the practical response made by retail property owners/managers in adapting to the fundamental transformation in the retail sector. These range from mitigating short-term risk through greater use of temporary tenants/licensees, preparing standard, generic ‘white box’ offers to better capture the tenant demand that remains, greater exploitation of tenant mix to provide ‘the retail experience’ right through to changes of use for parts of buildings and withdrawal from the sector altogether. Some of these approaches can be considered innovative and many were occurring before the pandemic took hold. This paper identifies and evaluates the approaches taken by practitioners in response to the fundamental changes referred to, the success, or otherwise, of which, will only be judged, fully, in time.