The demand for housing is massively outstripping supply in the UK and there is no quick fix to this imbalance. The general consensus is that no solution can address the historic housing shortage and that a mix of different strategies will be required.
Meanwhile, physical retailers are fighting for their survival under the combined pressure of high operating costs from rents and commercial rates, competition from online retailers and unprecedented lockdowns from Covid.
Many well-known names have gone into liquidation, most recently Brooks Brothers and Paperchase, while others, like John Lewis, are looking to reduce their physical footprint.
The inevitable result is the vacancy of outlets in downtown malls and outlying shopping parks, which in turn puts the owners of these commercial assets at risk – the biggest casualty to date being intu Properties. , which was placed under administration in June 2020.
Reallocation of excess space in shopping malls and commercial parks for residential purposes must be a credible option to increase the housing stock. Traditional mixed-use projects have brought retail to residential with a supermarket or cafe on the ground floor of a residential tower. Perhaps we should now bring residential to retail by partially transforming malls and commercial parks into residential use or by building additional residential floors above existing retail shelves.
While there is nothing new in retail-led mixed-use developments such as the Princesshay Center in Exeter, which has over 120 residential units, nor in conversions from retail to housing such as the former Danum House department store in Doncaster in 78 residential units, now is the time to capitalize on this unique opportunity to build much needed homes while stopping the demise of shopping malls and shopping parks across the UK .
Clare Breeze is a partner and co-head of the Macfarlanes real estate practice