Charles Goodall:
Retail therapy

Over the past decade, the residential property sector has driven the astonishing regeneration of urban areas in the North West. Yet with many expecting house prices to fall rather than rise this year, what does this mean for the many projects still to regenerate satellite districts such as Wigan, Runcorn or Preston?

There is an argument that regeneration in these districts has been over-dependent on apartment-style residential property meaning these areas lack new family housing schemes. A knock-on effect is that resources and general amenities funded through regeneration projects are at high risk in the event of a downturn.

Retail is involved in some way in the majority of regeneration schemes. Not only can retailers provide the finance required to make schemes viable, but their inclusion in projects also leads to greater occupation, encourages footfall, stimulates the economy and provides much-needed services to the community.

With the right groundwork in place, schemes with retail input can also be well placed to ride out downturns in High Street spending. After all, even in a recession people still need to buy groceries, collect prescriptions and get their hair cut.

The main challenge for the regeneration sector, however, lies in engaging more closely with retailers, both to get them on board and also to provide them with the increased infrastructure they will need to operate effectively.

A further difficulty emerged following the Government's introduction of the Planning & Compensation Act in 2004, which enshrined the need for planners and regeneration bodies to carry out masterplanning and engage in 'stakeholder' consultation.

Retailers have a critical part to play in this consultation process, but are often excluded or reluctant to get involved, associating planning rules with restrictions on trade and rising development costs.

What is indisputable, however, is that allowing retail to fall between the cracks of regeneration projects can have dangerous long-term effects. Retailers pulling out of an area can be the first sign of a decline. For example, without retailer dialogue the outer fringes of Liverpool city centre could fall into decline as High Street names relocate to the new Liverpool One scheme.

In satellite districts especially, where the residential markets may be more susceptible to the effects of the 'credit crunch' we will find that retail will play a crucial role in tipping the balance between the commercial viability and non-viability of regeneration schemes. On a wider scale, retail development can effectively subsidise more ambitious developments, which add much-needed public services such as libraries, leisure facilities and amenity space to the mix. By doing so, the regeneration sector can even answer the charge made by many that projects build homes but not communities.

• Charles Goodall is a regeneration specialist at CB Richard Ellis, sponsors of this year's British Urban Regeneration Association conference in Liverpool.