Shopping more experience orientated betters public realm
Categories: Future of Retail
Tags: Portland Design Associates Ltd
"The revenue model at the moment is based on a 70/30 net to gross, let’s take a shopping centre, 70% tenanted space, 30% public realm. To raise the finances of the investment to build a shopping centre you need generally 60% pre-let, a couple of department stores, some line stores. Those stores will be reducing in size as front of house because of the collect experience thing because they’re going to have less stuff. So the amount of pre-let, 60% of the space will be questionable, okay. The demand from these other new players for different types of place, for different types of space, not these concrete boxes, more programmable space in public realm will mean that the public realm will increase. So the 70/30, I think will be 50/50. I think maybe 60/40 in favour of public realm. So suddenly we have in a shopping centre public realm that’s much, much higher proportion and that public realm will need to from a revenue perspective, but from the demand of retailers will need to be programmed, will need to be commercialised. But that commercialisation is not about leases, it’s about a calendar year of programmed space. So it’s much more akin to exhibition space than retail leasing. So that’s going to change the culture of shopping centres and the kind of environment."