RIBA Future Fair May 2008_ Cushman Wakefield_Retail and Leisure

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TOMORROWS RETAIL FUTURE URBAN ENVIRONMENTS.

ALISTAIR PARKER

Good afternoon.

I have to confess I have given this paper before. Every few years or so

and usually at the ICSC European conferences.And its quite interesting to look back to see what one might have gotright.

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SHOPPING CENTRES

are truly marvels of dullness and regimentation, sealed againstbuoyancy or vitality of the city life

JANE JACOBS Death and Life of Great American Cities (1961)

Not a lot is the honest answer.

Firstly my perspective. Educated as a planner, I was one of the founding

partners of our shopping centre development department about 20years ago.

And, in common with everyone else involved in shopping centres, Ipersonally never used them. Rather like Jane Jacobs, I thought theywere unitary monolithic citadel boxes with synthetic interiors; and thosewere the better ones.

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HILLTOP TOWNS

In urban design, my heart remained with the Italian hillside villages ofTodi, Ovieto, Assisi, Gubio no Zara, no cinema and no Waitrose butthen this urban design format seems remarkably durable. We need toremember that half our commercial building stock was built before1940; and thats about 2/3rd of our shops!

I would like to set out some simplistic thoughts on what might governtomorrows urban design in the terms of development timescale market economics - rising affluence.

Obviously future views are usually driven by current concerns. Todaythat is environmental sustainability which I dont propose to cover.

By adopting the Confucius line -"Study the past if you would divine thefuture." I would like to cover what we did recently think would happen

and suggest what is already behind us.

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SPECIALITY RETAIL

BEVERLY HILLS Rodeo Drive WASHINGTON Post Office

In the mid 1970s the American department store industry providing thevital anchor engines of the malls began to consolidate, closed storesand malls lost a key anchor. The common replacement was a multiplexcinema. And the discussion began about the retail and leisure interface.

In the absence of real town centres, it was thought the American mallmight prosper by providing the communitys social stage with foodcourts, cinemas and play centres.

By the 1980s shopping itself was seen as a leisure activity but devoted tomeeting needs rather than wants people wanted experience andservices rather than products and transactions.

Hence the rise of speciality retail or festival market places; uniqueshops without any anchor tenants. Here the old Post Office (1986)

[Daniel Burnham make no little plans] using a historic environmentand Rodeo Drive (1990) affluence at a massive scale.

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URBAN ENTERTAINMENT CENTRES

SAN DIEGO Horton Plaza

LOS ANGELES City Walk

And then the explicitly crafted integration of leisure anchored by amultiplex cinema - with supporting retail in the form of UrbanEntertainment Centres down town revitalisation with Horton Plaza(1984) reliant on conventions and off centre attraction City Walk (1993):retail linked to a theme park.

And we dont do this stuff any more. It never really worked.

But back in Europe for a Future retail conference in Berlin 13 yearsago I set out what I saw as the commercial justification for whatunderpinned John Gummers PPG6 of 1997.

Namely design led innovation for mixed use multi storey urban grainschemes within our towns and cities rather than enclosed off centremachine malls.

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RETAIL DESIGN

MINNEAPOLIS Southdale (1956)

Victor Gruen

MILAN Galleria Emanuele II (1861)

Giuseppe Mengoni

But the enclosed retail machine malls which saw its finest UKexpression in Bluewater is a remarkably efficient format which iscapable of sweeping away all lesser competition.

Its origin was Victor Gruens. A Jewish refugee who based his thinkingupon Milans Galleria, his ideas like Corbusier have been misapplied.

As Malcolm Gladwell remarked - he invented the shopping mall in orderto make American more like Vienna. He ended up making Vienna morelike America.

But the 1956 Southdale format idea has dictated planned retailenvironments ever since. Few shopping centres have won anyarchitectural awards and the business has been led by a handful ofcommercial architectural practices. They have understood that privately

funded and complex developments of this scale are about functionalefficiency and accountant dynamics.

In no sense can the form be allowed to swallow function like the haplessLottery projects. In the absence of lavish public gratuities, the marketeconomics determine output.

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RETAIL DESIGN

BIRMINGHAM Bullring (1790)

BIRMINGHAM Bullring (1963)

We have learnt I hope to be cautious and careful in our ambition.When we experimented plot by plot we had an urban tapestry. Ourrecent record with large scale transformation is poor; large concretestructures arbitrarily imposed on the urban fabric grown over millennia.

The Bullring was a classic example an opportunistic growth from aninner ring road concrete collar and the classic white elephant.

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BIRMINGHAM Urban Renaissance

THE NEW BULLRING

$800 million

120,000 m2

40 million visitors

11 hectares

3,100 car spaces

And then we could suddenly pull it all down and start again.

Perhaps restoring old vistas and putting back open streets. Most

importantly, by responding to real demand for new modern retail.

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BULLRING A post PPG6 hybrid

The new Bullring was a triumph. Commercial designers but here with theold vista restored and a new open street and central piazza.

But below, the 1956 Southdale rules still govern.

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LIVERPOOL Paradise regained

17 hectares 6 districts 40 buildings 234,000 m - 920 millionPelli Clarke Pelli, Allies & Morrision, Austin Smith Lord, Dixon Jones, John McAslan,

Wilkinson Eyre, Michael Squires etc

The market has moved on. In the summer of 1998, we started on whathas become Liverpool One. The 1st phase will open this month and itwill, I promise you, be a European landmark. A BDP masterplan and anumber of distinguished designers. The edge of the envelope futureurban environment as we saw it 7 years ago.

It took 10 years to deliver. What I have just started on today should,hopefully, open in 2018. As BCSC recent research noted, almost of thenext decades floorspace is already in the pipeline. In a sense, wealready know what the future retail environment will be like.

But today and right now, this Liverpool is not possible to build. Thosemarket economics have drastically changed. Obviously the creditsqueeze but its more about the rising price of materials, the investment

market yield shift and the ever growing regulatory challenge. Just toapply for planning permission for schemes over 50,000 m can cost 10M.

The mixed use idea in our cities and towns outside London has prettymuch collapsed. Every residential unit in this scheme costs 20,000more to build than it is worth. Mixed use is more expensive, lesspredictable, more reliant on 3rd party events [schools] and more difficultto finance.

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NEW URBANISM Greyfield malls

walkable live / work / playneighbourhoods with public

spaces framed by architecture

based on historical precedent

SAN JOSE Santana Row

Part of the viability problem is site values. It is ironic that 40 acres ofcity centre land in desperate need of regeneration can cost more than1.5 million per acre as opposed to greenfields at 1/4 million pa.Hence the massive need to build value from the design that createseconomic value uplift from current site value.

Many of my colleagues would argue the highest residential upliftexamples are Poundsbury vernacular pastiche if you will or a Candy &Candy project in central London using interior designers if you will.

Either way, it is market economics created by local affluence.

Seaside, in the States, is arguably a contemporary of Poundsbury. TheAmerican new urbanists carry considerable political muscle. And wherethey have triumphed is the greyfield malls; failed shopping centres thathave gone dark. Santana Row in San Jose was a big old enclosedmachine mall.

If I talked through some stats on failed malls you wouldnt believe thenumbers. May I therefore commend an excellent web site Deadmalls.com.

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CONSUMER DRIVERS

Average Weekly

Household

Expenditure

So the futures driver is affluence. Change comes from changing thedynamics of the weekly spend. First way to change behaviour or demand transport. Second is recreation and culture. Least important health.

The average long term GDP growth is 2.5% pa. Compound growth inwealth has significant implications. Todays average household earns30,000 pa. Thats an increase of 50% since 1996. The forecasthousehold income in 2020 is 50,000.

In 1983 the average spend on non food goods was 38% of total shoppingspend some 913 per head. Now its over 64% with an average spend of2,762 per head. So, in the last two decades non food spending in theshops has trebled. In the next two decades it is forecast to double.

Leisure is the most rapidly expanding economy sector. Between 1991

and 2005, the spend has increased, in real terms, by some 30%.Household spend on leisure has risen from about 6% in 1974 to 28% in2004. This year, that will represent a 49% market growth since 1999. Inthe States, about 1/3rd of all meals are eaten out. In the UK its about10%.

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CLICKSNBRICKS Multi-channel retail

Internet access Internet sales

Massive internet growth. Back in 2001, many suggested this heralded thedeath of the High St. The industry wired up malls, set up new portalsand formed new co-operative retail networks. All that expenditure is

now written off.

Current forecasts put click sales at 20% in 2010 or 10% in 2010.Forrester Research data (April 2006) notes 26% of online consumers weremerely satisfied: that is 76% were not even merely satisfied.Despite site improvements, wider broadband widths, enhanceduseability conversion rates remain at 2.5% of visitors.

Consumers want more than just convenience and access. Inevitably it isabout bricks n clicks its about multi channel / multi service retail

with brick, flip and click the flip being the printed catalogue. Areported 63% of click sales come from offline info sources includingbrick. LL Bean still sell more from catalogue than from the internet.

In short, its data smog out there : we are drowning in info but starvingfor knowledge. About 8 hours of video are uploaded to You Tube everyminute. Consumers want meaning, utility, emotion engaging, servicerich and user generated content. Pervasive IT that links and connects seamlessly through single learning interfaces. We dont want to knowabout all this stuff.

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LOCATION Value & market size

1,625,790Manchester

1,985,911Glasgow

2,463,190Dublin

3,070,996Prague

5,390,000Amsterdam

8,800,000Milan

9,482,960Madrid

11,050,000Frankfurt

11,855,000Brussels

31,278,698London

45,300,000Paris

Office Stock (m)City

So why is all this just about retail with supporting leisure and now a bitabout culture led regen? Take offices. Outside Paris, London, Brusselsetc, the regional markets dont merit much attention.

Two key points. London a rewards market driven by 336 million squarefeet of offices. And the next British city the Glasgow market at merelysome 21 million.

Secondly financial performance is driven by relative values. AgainLondon at circa 1,000 psf for offices and only six regional cities above300 psf.

Retail by contrast works well with values at over 900 psf atBirminghams Bullring, Canterburys Whitefriars, Norwichs Chapelfields,Southamptons West Quay, Readings Oracle and Basingstokes Festival

Place.Quite critical really because urban renaissance compliant schemes haveviability threshold of circa 600 for retail [ZA125 psf] and about 275for offices. So outside high value markets, we need cheap sites andlarge enough to create new environments of the quality necessary to getthe value step changes.

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LATEST RETAIL

ISTANBUL

Kanyon Mall 2006

Jerde Partnership

So what else are we looking at. One that caused a stir last year when itopened in highly affluent part of Istanbul - was a recent Jerde scheme.

Its about 120,000 m with 50% retail, 25% residential and 25% offices.Retail anchor is Harvey Nics and the 8000m entertainment area is a

multiplex cinema.

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LATEST RETAIL

MEXICO Antara Polanco 2006

Sordo Madaleno

Similar scheme for the affluent part of Mexico is this one.

Again mixed use but retail led and reliant upon upscale retail serving a

highly prosperous community.

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FUTURE URBAN ENVIRONMENTS

I would like to leave you with one other thought.

My office recently took visuals of some of the committed schemes themajor retail led mixed use multi storey etc projects.

I pinned these up on the wall.

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FUTURE URBAN ENVIRONMENTS

And these.

All new open street schemes albeit some with what Benoys call sky

plane roofs. All PPG6 compliant and many scoring well in a CABEreview. All in the best possible taste.

None of us could remember which scheme was which. The designafforded us no clue as to which town or city was involved.

These 50,000 m projects include ones in Leicester, Swindon, Bristol,Liverpool, Newport and so on.

And one of us asked are we building the new Arndales?

Thank you.