Since 2010 local authorities have taken a more active stance towards using property assets as a source of revenue, some in response to the likely requirement to be self-financing by 2021, and others in response to inactive owners who fail to reinvest, which in turn causes detrimental impact to the wider town and environment, writes Paul Wright of NewRiver REIT.
Many councils understand that a quality environment in the town centre and community, one that offers a variety of retail, leisure and services at a price the shopper can afford, is essential for the wider long-term economic and social health of the town.
Successful town centres will be locations that provide the right type of retail, medical services, civic services and of course are ideally suited for additional and much needed residential. At NewRiver REIT, our 150m customers tell us that they want to access local authority services and be able to go the doctor or dentist at the same time they do their daily shopping.
Ultimately it is about creating a place where people want to live, work, shop, eat and invest. This has led to an increasing number of councils purchasing their local shopping centres in a bid to help steer direction and enhance change.
The Localism Act encourages authorities to be more enterprising and forward thinking, but a guidance document by the Local Government Association, called “Enterprising Councils” published in mid 2017 states that expert advice should be sought and councils “should be clear around the long-term risk and benefit modelling, governance and what specialist capabilities may be required to support activity”.
The retail landscape moves fast and so decision-making and the ability to leverage off the changing dynamics to create opportunities, requires continual commitment and sector expertise. The High Street is currently the subject of a lot of bad press with a host of high-profile failures and the risk profile has therefore further increased.
The oversupply of retail in most towns and cities further heightens the need to pull stakeholders together to speed up rationalisation and repositioning. NewRiver remains fully committed to town centres and we see investing alongside councils or Local Authority Pension Funds, as a great opportunity to create potentially powerful partnerships to help accelerate change and regeneration. These partnerships could also be of regional significance.
A FTSE 250 publicly-quoted company with requisite corporate governance, we are a long-term investor with control of our own equity and investment, so our strategies are generally aligned with council objectives. In our retail portfolio, we already work with over 50 different councils and local authorities. Shopping centres are an important community hub, are incredibly diverse and complicated assets to manage – now more than ever they require specialist management.
NewRiver has one of the strongest balance sheets in the retail sector and have an initial £100m of capital to invest.
With the ability to put skin in the game we believe we offer a unique proposition to share the risk with local authorities whilst also sharing the revenues and helping to create a plan for wider regeneration and growth through a circular economy.
Want to find out more about the North West retail sector? Tickets are on sale now for Future of Retail on 13 September