Reflecting on the troubles at Patisserie Valerie, it continues to be a year of turmoil for the retail sector, particularly for those with a primary dependence on bricks and mortar and a high street presence. We have seen a host of household names disappear and others are marketing leases in prime shopping destinations to reduce their exposure. This activity is changing the face our high streets for ever, thanks to factors like slowing consumer spending, the increasing influence of internet shopping and high business rates, with little or no support from government to date.
This new era of the high street has also brought new challenges for the property investment management industry. A much more proactive approach to due diligence is required when it comes to analysing the performance of retail holdings in the portfolio. Each asset requires regularly reviewing and monitoring to fully understand what is going on behind the retailer’s trading figures.
We have seen the emergence of a different, deeper relationship with 'customers’ occupying the units to support them through difficult times to protect income and secure sustainable investment returns over the long term.
In a market where there are few opportunistic investors with big ideas for transforming our high streets, tough decisions like a change of use or switching to different retailers with greater consumer appeal and a fully integrated and personalised omnichannel strategy must be made.