The mood was subdued but determined at the black-tie dinner for this year's British Council of Shopping Centres Shopping Centre Management conference, held in the splendour of Liverpool Cathedral (the Anglican one) last night.
The terribly swirling acoustics reflected the ambiguous messages coming from delegates as they struggle to find a clear path through these austere times. There are many shopping centres trading well, with strong anchors in discount ranges such as Primark, TK Maxx and Poundland or the evergreen supermarkets. Much of the talk at the conference, which finishes today, has been about stopping the vicious cycle of voids – shoppers put off by closed stores stop visiting and so more shops fail – in seemingly any way possible. From novel interim solutions like balloon-modelling clowns or market stalls to radio station road shows entertaining shoppers, anything seems worth a try.
The more flexible centre owners will offer longer rent-free periods running into years for the most attractive tenants, with cash for fit-out worth another couple of years' rent, leaving you wondering if they will get more than half of a ten-year lease paid for. The proactive approach to maintaining footfall and keeping the lights on is fair enough, but the retail asset managers are twitchy that investment value will be eroded for a decade or longer.
Grosvenor's Liverpool One may be among the more flexible centres ready to bend with the wind of recession but the consensus among fund managers is that it has been a popular victory, financial disaster. The Duke of Westminster's clan may wait generations for a return. Its like may never be seen again, BDP director Tessa O'Neill told delegates in her revealing presentation on the changing landscape. Liverpool One's scale and complexity, let alone cost over-runs, will mark it out as the final hoorah of the retail regeneration boom. Half a dozen centres over 1.5m sq ft opened in the UK in the past two years. In the future, schemes will be lucky to breach 500,000 sq ft with 350,000 sq ft a more likely ceiling.
One suspects from the shoe-gazing mutterings from many retail property owners and developers this week when put on the spot that there are more bankruptcies, rights issues and redundancies to come. The winners will be those that can maintain value in their assets whilst helping retailers weather an unprecedented storm. Listening for the answers as to how they do that was not clear amid the echoes over dinner last night.