I’m wondering if high street retailers and those heavily involved in commercial property are mouthing the words made famous by Private Fraser in Dad’s Army: “We’re doomed!”?
You could understand if that were the case. Consider the Covid-influenced facts:
- High Street stalwarts such as Debenhams and Arcadia (Burton, Dorothy Perkins, Evans, Miss Selfridge, Topman, Topshop and Wallis) have either gone into liquidation or administration. I won’t pretend that I fully comprehend the difference, but I do know that both spell bad news. These problems, when combined, puts 25,000 UK jobs at risk.
- The John Lewis Partnership (JLP) has announced that it is to become a residential landlord, planning to build rental homes above or beside Waitrose supermarkets around the UK as part of a strategy to restore the battered fortunes of the employee-owned retailer.
- The prevalence of home working has put a big question mark over the future of purely commercial office premises.
The Debenhams news means that its stores in Ashford, Canterbury, Chatham and Folkestone will cease trading in the very near future, leaving big holes to fill. Soon the only Debenhams in the county will be at Gravesend and Broadstairs.
What’s even more worrying is the thought that these closures might just be the tip of the iceberg. For example, for the past year a cloud has been hanging over House of Fraser stores in the UK after Sports Direct took them over. How would it be if their Fremlins Walk, Maidstone, and Bluewater stores were to close? I want to stress this is pure speculation based on other stores closing. It’s more than possible that the two stores I mention are among the strongest in the portfolio.
Traditional high streets in many parts of the country have been in decline for a very long time now. Now all we seem to have is coffee shops. I like coffee, but not enough to keep half a dozen shops going. Has the pandemic just hastened the end of the high street as we used to know it? I fear the answer might be ‘yes’. Online shopping has become the norm for young people because they have grown up with it. Now, even old foggies like me are coming round to thinking this may be the (only?) way forward. Two days ago, I ordered a jacket over the net. No going to a store to view the choices, no trying it on, no seeing how it will look on me. I must say that it all seems alien. A year ago, I would not have considered such a move. Covid has changed my thinking – and the thinking of many thousands, maybe millions, of others.
So, what will happen to the high street and commercial premises in general? I live in an apartment created in what used to be an old Job Centre (Labour Exchange as was). It seems to be all the rage, converting former offices. I recently took a passing interest in a flat in Brenchley House, Week Street, Maidstone, just around the corner from Maidstone East station. The seven-storey building used to be offices before being converted to close to 200 flats. I found the Wetherspoon’s on the ground floor a mixed blessing – great when you have a thirst, but not so sure about the noise at kicking out time.
Yes, such changes of use will go some way towards addressing the country’s housing shortage. But, by helping to solve one problem are we creating another? By converting commercial premises in big numbers to residential are we creating an office space problem further down the line? More on this shortly.
And what of these plans for Waitrose stores? Some 20 of them spread around the country are due to have flats built on the top of them or to the side. I have attempted to discover if one in Kent is involved, but JLP is remaining tight-lipped at present.
Do you fancy living above a Waitrose? Not far to go for your shopping and parking should not be a problem. If they would reduce some of their product prices, I would give it serious consideration. At least the people at JLP are thinking outside the box and not just letting the rot set in.
Back to the future of offices. Are the days of large corporations wanting big headquarters buildings numbered? Many businesses have grown to accept that working from home can actually work! To be fair, many have had to accept it. But most of the fears about staff malingering have been largely dispelled.
Yes, employers have an uneasy feeling about so many of their computer assets sitting on their employees’ dining room tables. Though I have already written about how I expect the homes of the future to include more studies to free up those dining room tables.
But this company computers in home environments consideration can be addressed fairly easily. Instead of giving season ticket loans, how would it be for companies to make job offers conditional on prospective employees buying their own company-recommended computer (with the help of a company loan). Knowing what I know now, I would be up for it. In my line of work (editing), all I need is a decent (Mac) computer and a good broadband connection to allow me to work relatively unhindered. I don’t ever expect to be asked to return to the office full time (though I could be horribly wrong).
If I had a lot of assets tied up in commercial property I would be worried right now. Indeed, I recently asked my pension advisor how much of my pension ‘pot’ was invested in commercial property. Thankfully, the answer was very little. Commercial property used to be attractive to those handling large pension funds. I’m not sure this is the case any longer.
Covid has a lot to answer for…