By Elliot Newby
The high street is dead, is something you hear regularly in the national media, but I would argue that the high street is simply evolving.
The prime retail market does remain challenging, national retailers taking 25-year leases on “prime” shopping streets is a thing of the past, and York is no exception. It is clear for everyone to see that major online retailers have dominated in recent years, to the detriment of the traditional high street, however what has sprung up in its place is a growing community of local retailers and leisure businesses offering high quality, experience-based offerings – something that simply cannot be replicated online.
York has always benefitted from a strong collective of local high street operators but with the exit of many national retailers, more opportunities are presenting themselves with circa 67% of facias being local in nature, up from 63% 3 years ago. This trend has been further substantiated in the exceptional demand we have seen in small-medium sized retail units. It is not uncommon to have a raft of applicants for each available property, with a proportion of those applicants seeking to open food and beverage-based businesses.
Recent changes in the Use Classes Order have only encouraged the shift towards more leisure-based uses, effectively removing the requirement for restaurants and cafes to apply for a change of use from retail, subject to certain caveats. Many of these businesses are new start-ups or businesses still in their infancy and generally operated and run by local individuals, willing to take a chance on a location they are familiar with and have utmost confidence in to continue to thrive.
The beauty and historic nature of the city will undoubtedly continue to appeal to visitors and drive daytime and evening footfall, putting York at an advantage over many of its regional and national counterparts, however what the quirkiness of the city doesn’t provide much of, is large open plan trading footprints, this in itself results in a high proportion of small, therefore more affordable retail units, when compared with other cities.
One street that has been able to provide units more in line with national retailers’ requirements is Coney Street, hence this area of the city has seen the biggest increase in void rates. As matters stand, rent and rates put many of these units out of reach of local and regional occupiers and will require structural change in the physical make up of the buildings, or a reversal of the current national retail trend. It is apparent the former of those two scenarios is more likely with the proposal to redevelop Coney Street and its riverside frontage, incorporating a new walkway and bridge across the river Ouse, being driven by York-based private developers Helmsley Group.
The Coney Street redevelopment scheme, along with the proposed Roman Quarter and Castlegate Gateway, shows a continuing desire from developers to invest into the city and hope of a fresh new look to some of the areas that need it most.
The office market provides another interest facet to the changing city centre. Whilst flexible and hybrid working policies had become commonplace in many organisations prior to COVID-19, the coronavirus pandemic has significantly accelerated that trend.
Following the removal of the working from home guidance recently, we are seeing many businesses encouraging staff back into the workplace, however it is expected that hybrid working will form a large part of employer’s plans moving forward but to what extent is somewhat unclear at this point.
Whatever the extent of the hybrid/flexible working model, it is clear that organisations will either require equal or less office space than previously. However, we are unlikely to see a cliff edge event whereby swathes of offices become available, due to fact occupiers will only be able to make changes at their next lease event (typically every 3-5 years). We may well see a trickle of larger, poorer quality offices become vacant, and if the last 7-8 years are anything to go by, developers and investors will seize the opportunity to convert these to alternative uses, most typically residential, due to their capital values largely outstripping that of commercial property. Will this result in a higher degree of student accommodation, letting accommodation or residents living in the city? Whatever mix is settled upon will undoubtedly change the dynamics and demographic of the city centre.
Elliot Newby BSc (Hons) MRICS
Head of Commercial Agency & Commercial Surveyor
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