Welcome to The Crown Estate
James Cooksey, Head of Regional and St James's Portfolios
5 October 2012
A sustainable approach to business is fast becoming a prerequisite for modern companies in all sectors.
It is a priority for us as a business and more and more we are hearing from our customers (especially the more enlightened ones) that it's a priority for them too.
In retail property there is still some way to go before the sector can claim success here. No-where is this more true than out-of-town, a sector in which we now have fourteen retail parks in prime locations, from Edinburgh to Portsmouth.
In considering improvements to sustainability, it is important to address a commonly held misconception. Rather than being a narrow concept, sustainability should be viewed in its broadest sense, stretching way beyond just environmentalism. It's also about communities, economic sustainability and employment opportunities, even health and safety.
Inevitably for 'big box retailing', it is environmentalism that presents one of the more substantial challenges; units are traditionally poorly insulated, gaping shop doorways are left open, and big car parks tend to be relied upon by consumers, rather than public transport.
Improvements are more than achievable and can yield substantial benefits in the shape of long-term savings. But short-term costs of raising retail parks' environmental sustainability should not be prohibitively expensive for landlord or retailer, particularly in this economic climate.
Success will depend on a collaborative approach and we are trying to address this at our MK1 scheme, currently under construction in Milton Keynes. If all goes to plan it will be the first UK shopping park to achieve a BREEAM 'excellent' rating. Landlords can do a lot, for example by including sustainable operating requirements within leases, and by focusing on sustainability at the design and construction stage. But success will also depend on a cultural shift based on strong collaboration with tenants from fit-out right through to opening.
Lessons can be learned too from those occupying 'in-town'. For example, opportunities should be considered for freight and recycling consolidation schemes (such as we are running in Regent Street). These pool retailer deliveries and encourage recycling, and have a major impact on carbon emissions and local congestion. Here again tenant engagement remains key.
Out-of-town retail has also featured prominently in nationwide debates on community cohesion. We all recognise the challenges faced by many high streets in attracting customers and competing effectively with alternative destinations and retailing channels, including the internet. At the heart of these challenges is consumer demand, which has driven trends in shopping that have led occupiers to consolidate their activities into larger units in dominant locations.
Our portfolio, which includes one of the UK's largest high streets, together with other town centre retail such as in Oxford and Exeter, demonstrates the importance of cohesive management. Indeed our redevelopment of Regent Street, which ten years ago was itself facing major challenges as a destination, demonstrates what can be achieved when management is cohesive and grounded in a clear vision. The Portas review highlighted the need for local councils and planners to encourage strategic town-centre management, as has been done in the West End, for example, through increasing the use of Business Improvement Districts.
We support this wholeheartedly but are also clear that in locations where we operate out-of-town, our retail parks should play a greater role in bringing local communities together. Meeting shoppers' basic needs by providing the right retail mix in the right format is no longer enough. Retail based community events are common place in town centres and we recently trialled one at the Queensgate Centre in Harlow. It proved very popular and we are planning more in the coming year. Such activities should become more-and-more prevalent out-of-town. They are a great opportunity for responsible landlords to galvanise local communities, and at the same time support their tenants by driving stronger footfall, particularly important in these tough times.