NW 2015: Swap shops
Throughout December Place North West will be sharing the predictions for next year from a range of guest contributors, starting today with Guy Butler, projects director at Grosvenor.
After spending 12 years on the Liverpool ONE project and based in the city, and for the last 18 month working out of the London office in Mayfair, it is interesting to compare the two and to try and see what the next year will bring.
Retail
Change will continue to happen with occupiers going up a size, such as Zara, and others downsizing, see Argos, with large format food demand being replaced by the budget end, who appear to be winning the day.
Click and collect, after its premature arrival, will start to find its feet – but probably not demonstrably in the next 12 months. With the recent announcement of the 27,000 sq ft The Toy Store at Bond Street station, this may be followed up with their arrival in Manchester, to replace the gone but not forgotten Daisy & Tom on Deansgate – there appears to be this demand.
Residential
A complex and misunderstood sector; over the next 12 months the funding market will drive the change in supply not the consumer – which is the wrong way around, if you ask me. As investor demand starts to be satisfied then consumer input will start to polarise the market, which might have shifted out of kilter with what the consumer wanted.
In 2002 when Grosvenor arrived in Liverpool not a single person lived on the 42-acre site. Now about 1,850 people sleep in the apartments and hotels within the original red line. This transformation will happen again with continual densification of the city centre, which in turn will drive retail and food and beverage take-up. Some people will wake up to management of blocks which from what I can see, is a massive underserved hole in the market at the moment.
Offices
With lease events arriving and a renewed pipeline, the market in Manchester will work well. Liverpool has more challenge and without innovative thinking the supply of large Grade A space will dry up and lease events will leave the biggest occupiers with the excuse to leave the city. Clever thinkers will provide the innovation to plug the gap, or there is likely to be a systematic decline.
Funding
The majority is borne out of London and I hate to say it, but the NW needs to be in London as much as ever. The Liverpool 'embassy' in London plugs a gap, but is only the first step of a very long journey. HS2 provides another reason to talk the region up.
Predictions
Some large mixed-use comprehensive schemes will be born in 2015; think Liverpool ONE scale, but with less of a retail focus. These will be 10-year projects and transformational, probably delivered with compulsory purchase order intervention. If they don't arrive this year, they won't arrive at all.
Empty upper floor space will be filled with residential, and the equivalent to Beetham Tower of the current cycle will be identified.
Food and drink demand will be sustained but the retail market will consolidate with units swapping around, but few large-scale additions. The number of smaller units will decrease.
Car park demand will slowly tail off as city centre populations increase and fewer people own cars, these sites will form the hub for large scale redevelopment.
In a year's time the world won't look very different but the foundations for growth and change will be in place for the next cycle.
