Developer plans reinforce a mixed-use future

Shopping centre operator Intu last week announced it is planning to build a new residential development on the doorstep of its Lakeside mall in Essex.

Veering away from its typical retail focus, Intu said the new development will bring over 1,000 modern homes to rent, catering for individuals, couples and families alike.

Instead of talking up the mix of shops and eateries at a new centre, Intu touted the benefits of “community living in the heart of Essex” around 30 minutes from London’s Fenchurch Street.

Plans were on display at an initial public consultation within Lakeside shopping centre on Friday 12 July, and a full public consultation will follow as development ideas evolve.

Martin Breeden, development director at Intu, called it “a vision to build a place for people to live, play, shop and work”. And that mixed-use mantra is becoming increasingly common in retail property parlance.

Jonathan De Mello, director of retail consultancy at Harper Dennis Hobbs, says demand for retail space in the UK is “at a low ebb” so the extension of Intu’s reach makes sense.

“The addition of residential space to Lakeside mirrors developments happening elsewhere across the UK, where once pure retail schemes are seeking to add more mixed use – such as offices and residential,” he explains.

“London’s King’s Cross is a great example, and planned developments in Islington by Cain International, and Sheffield by Queensberry follow a similar path. If done right then these schemes can provide multiplicative value for all property elements as the residential and offices feed the retail, and vice versa.”

Angus Thirlwell, CEO of Hotel Chocolat, which has a store at Lakeside as part of a 103-strong UK portfolio, says “it makes total sense” to build a community around shopping centres.

“Just a physical shopping destination is not enough – it’s got to be a sense of community and a cross fertilisation of different activities happening,” he states.

“More creative solutions need to be found to make use of these strong but old models.”

Homes are coming to Intu Lakeside
Homes are coming to Intu Lakeside

Mixing business with leisure

By its very phraseology, the term ‘mixed use’ does not have a set template.

Whereas some real estate firms are starting developments with office, leisure, retail and hospitality in mind, others are using it as a defensive tactic as vacancy rates rise – partly brought on by the recent raft of company voluntary arrangements in UK retail.

Andrew McVicker, director for retail property at Pragma Consulting, argues a successful blueprint for mixed use development is “locations created with a purpose in mind”.

“That should be creating places for people to live, work and play, and it needs to be an equal relationship between all of those things,” he argues.

“It’s not a case of just developing flats on top of shops, or struggling owners letting out space to a flexible working space company. It’s got to be a creation of something that meets people’s fundamental requirements.”

McVicker adds: “You’ve got to be clear what is trying to be created and who it is for. Often people talk about leisure when they just mean bolting on a bowling alley, cinema, or a restaurant.”

Intu appears to be going much further than that at Lakeside, and there are several other notable examples of mixed-use sites emerging across the UK, with an emphasis on creating local communities.

Elephant Park from Lendlease
Elephant Park from Lendlease

Property group Lendlease is seeking independent businesses to take units in the second phase of its Elephant Park development, a regeneration project in south-east London in conjunction with Southwark Council.

Meanwhile, the first phase of Wembley Park Market launched this month, with a focus on local and independent brands, and on eco-friendly retail. It is part of Quintain’s 85 acre, £3bn development in North London.

Elsewhere, cultural infrastructure developer Really Local Group has announced that Catford Mews will launch later this summer, offering cinema, food market, café, bar, and a live entertainment venue, all tailored to the local Lewisham community.

For such creativity to continue will require UK councils to be more flexible and open minded with planning policy, and De Mello says Sheffield, Nottingham and Dudley councils are among those being most proactive in this regard.

Early designs for the proposed Lakeside residential development include public and private open spaces, lifestyle facilities, and what Intu describes as attractive landscaping and design features integrated with the existing centre.

Breeden notes: “Our long-term vision is to create a vibrant new community right on the doorstep of one of the UK’s best retail and leisure destinations.”

Wembley Park Market
Wembley Park Market

Two birds, one stone

Research conducted last summer by Heriot-Watt University for the National Housing Federation suggested England’s total housing need backlog has reached four million homes. Meanwhile, British Retail Consortium-Springboard data shows shopping centre footfall declined by 2.4% year on year in June, following June 2018’s decline of 3.4%.

Against this backdrop, creating more homes to create additional shopping centre visitors seems logical.

De Mello does not believe renting property to the public will give Intu any notable fresh insight into consumer behaviour from a retail perspective, but if take-up for homes is strong, he sees a chance to build a convenience offering around a “captive audience”.

“This may also give Intu Lakeside ‘town centre status’ which would enable it to extend the retail element of the scheme further, bypassing traditional shopping centre planning restrictions,” he adds.

For Thirlwell, it is a positive sign the UK’s retail property industry has changed direction since the early days of his company in the early 2000s. Landlords at that time were often “arrogant”, he says, but he recognises there is now more “open-mindedness”.

“The days of arrogant property owners are fortunately gone and they are having to face up to the reality of adapting their model, the same as everyone else,” he notes.

“It’s welcome and, fortunately, the most progressive ones are thinking outside the box, considering how they can support brands by making their spaces pacy and exciting to lure traffic in, which is what it’s all about.”