Planning for the future
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Planning for the future
Posted Date: 04/11/2011
By Michael Baker
The first international conference on urban planning was held in New York in 1898. The chief topic on the conference agenda was not how to control property development, but rather how to deal with the problem of horse manure.
In the horse-drawn age it was a curse on cities, everywhere piled up at the sides of the streets causing a foul smell and breeding diseases.
The conference reportedly was a failure and broke up early, but the association between urban planning and horse manure has proven a devilishly tough one to sever.
Today, of course, the problematic horse manure is not the kind that stinks up the roadside, but the kind that muddles the thinking of planning policy makers. It is frequently associated with hubris, economic illiteracy and bloated bureacracies.
This horse manure prevents the market in free societies from doing its work, resulting, among other things, in unaffordable housing and uninnovative retail at a time when consumers are screaming for choice and value for money, and both retailers and shopping centre operators alike need to be able to diversify and evolve their formats to keep prospering.
The evidence of planning horse manure is everywhere. Britain is replete with droppings. Even as Westfield Stratford opens in London, medieval “be-kind-to-high-streets” planning policies are still entrenched, sometimes momentarily loosened only when planning czars find they have no option but to let developers like Westfield stump up the cash and know-how to restore their decayed urban cores.
Otherwise, the planners strangle both shopping centre development and consumer choice alike.
As a result of the UK planning regime, shopping centre space as a percentage of total retail space in that country is approximately 50 per cent that of Australia, the US and Canada. No surprise that the UK has among the highest and fastest growth rates of internet penetration in the world, so deprived are consumers of high-quality conventional shopping options.
Pity the poor continental Europeans too. In Belgium for example, the retail development permitting process is so politicised that a centralised government agency – the National Social Economic Committee – gets to approve all retail projects, no matter how small, and the approval is based partly on the proposed tenant mix. If the tenant mix should change during the development process, Big Brother in the planning office must approve that too.
In Switzerland, planning ordinances get really crazy. Dr Herman Kok, an associate director at European commercial development firm, Multi Development, observed how Swiss planners strictly limit the amount of parking allowed for shopping centres to discourage people from driving.
One 50,000sqm regional mall near Zurich had only 850 parking spaces, but if the actual traffic flow exceeded the expected flow it triggered a clause in the regulations allowing the authorities to shut part of the parking lot down. You can imagine the consequences.
In Australia, regulation has often been less authoritarian than in Europe, and with respect to the total quantity of retail space it has gotten things pretty close to right – supply has kept pace with population growth and productivities have been sustainable over time.
Planners have, however, made it difficult for new retailers to get sites, particularly large-format retailers that operate everywhere overseas, even in the UK. They have also imposed nitpicky restrictions on the location and tenant mix of certain kinds of retail formats, giving rise, among other things, to retail hunchbacks like “bulky goods centres.” These kinds of centres are typically low on amenity and have an aesthetic that is just
barely superior to the average army barrack.
Worse though, unlike the US power centre and its UK sibling the “retail park", bulky goods centres don’t have any merchandising flexibility to cope with fluctuations in demand for household goods, should they occur. But as the purchase of these goods shifts steadily online and to freestanding formats, many bulky goods centres will simply fall off the 21st century’s retail map.
In New Zealand, however, common sense prevails. Planners there are concerned about their high streets, sure, but unlike in Australia and the UK, they go in much more for shoppers’ rights.
This has enabled the rise of innovative shopping centres such as The Base in Hamilton, in the north island’s Waikato Valley. The Base is a fully loaded suburban hybrid centre consisting of a traditional enclosed regional mall, open-air power centre, and factory outlet centre all in the same property, amounting to 81,000sqm of retail GLA and counting. It is near 100 per cent leased.
The developer, Tainui Group Holdings, has also obtained consent to add another 20,000sqm of retail, along with 12,000sqm of offices, and a 10,000sqm integrated health centre. Consent will shortly be sought for a hotel.
Although Australian planners get a warm glow from mixed-use concepts that combine residential, commercial and prescribed retail space, they get icy-cold tootsies if anyone suggests blending retail concepts.
Yet never has it been more important for a retailer or shopping centre operator to work to a flexible operating plan from a flexible operating platform than it is today.
In the age of e-commerce, the challenge for commercial property owners and retailers is not going to be seeing the road ahead, but clearing it of the droppings that permitting agencies and other regulators leave in their path.
To adequately serve pockets of population growth, developers and retailers will need sites that are sized and operated according to 21st century consumer needs. Shopping hours, parking ratios, tenant composition, sustainability, accessibility, the whole ball of wax will need to be worked out with the consumer in mind for a change, rather than the theological preferences of government bureaucrats.
Shopping centre operators know that to protect their investments they will not be able to stick too rigidly to the same business models that have served them for the past 60 years.
Indeed, they have only prospered for 60 years because they’ve been able to roll with whatever punches were thrown their way, tinkering with the format, amenities and merchandise mix to adapt to changing times. Tying their hands now will be a disaster for the industry.
Hopefully, that’s not what the planners want.
* Michael Baker is a retail and property analyst and consultant. He can be contacted at Michael@mbaker-retail.com or www.mbaker-retail.com
Keywords: Michael Baker, property, shopping centres
Comments:
Friday, November 04, 2011 by Peter Buckingham
Excellent article.
From Effluent to Affluent (in a different context to the normal description we use in describing Socio Economics).
Interesting if here in Oz we will start gaining more integrated, mixed use type centres
Peter Buckingham
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Printer Friendly Version Email A Friend Add This
Planning for the future
Posted Date: 04/11/2011
By Michael Baker
The first international conference on urban planning was held in New York in 1898. The chief topic on the conference agenda was not how to control property development, but rather how to deal with the problem of horse manure.
In the horse-drawn age it was a curse on cities, everywhere piled up at the sides of the streets causing a foul smell and breeding diseases.
The conference reportedly was a failure and broke up early, but the association between urban planning and horse manure has proven a devilishly tough one to sever.
Today, of course, the problematic horse manure is not the kind that stinks up the roadside, but the kind that muddles the thinking of planning policy makers. It is frequently associated with hubris, economic illiteracy and bloated bureacracies.
This horse manure prevents the market in free societies from doing its work, resulting, among other things, in unaffordable housing and uninnovative retail at a time when consumers are screaming for choice and value for money, and both retailers and shopping centre operators alike need to be able to diversify and evolve their formats to keep prospering.
The evidence of planning horse manure is everywhere. Britain is replete with droppings. Even as Westfield Stratford opens in London, medieval “be-kind-to-high-streets” planning policies are still entrenched, sometimes momentarily loosened only when planning czars find they have no option but to let developers like Westfield stump up the cash and know-how to restore their decayed urban cores.
Otherwise, the planners strangle both shopping centre development and consumer choice alike.
As a result of the UK planning regime, shopping centre space as a percentage of total retail space in that country is approximately 50 per cent that of Australia, the US and Canada. No surprise that the UK has among the highest and fastest growth rates of internet penetration in the world, so deprived are consumers of high-quality conventional shopping options.
Pity the poor continental Europeans too. In Belgium for example, the retail development permitting process is so politicised that a centralised government agency – the National Social Economic Committee – gets to approve all retail projects, no matter how small, and the approval is based partly on the proposed tenant mix. If the tenant mix should change during the development process, Big Brother in the planning office must approve that too.
In Switzerland, planning ordinances get really crazy. Dr Herman Kok, an associate director at European commercial development firm, Multi Development, observed how Swiss planners strictly limit the amount of parking allowed for shopping centres to discourage people from driving.
One 50,000sqm regional mall near Zurich had only 850 parking spaces, but if the actual traffic flow exceeded the expected flow it triggered a clause in the regulations allowing the authorities to shut part of the parking lot down. You can imagine the consequences.
In Australia, regulation has often been less authoritarian than in Europe, and with respect to the total quantity of retail space it has gotten things pretty close to right – supply has kept pace with population growth and productivities have been sustainable over time.
Planners have, however, made it difficult for new retailers to get sites, particularly large-format retailers that operate everywhere overseas, even in the UK. They have also imposed nitpicky restrictions on the location and tenant mix of certain kinds of retail formats, giving rise, among other things, to retail hunchbacks like “bulky goods centres.” These kinds of centres are typically low on amenity and have an aesthetic that is just
barely superior to the average army barrack.
Worse though, unlike the US power centre and its UK sibling the “retail park", bulky goods centres don’t have any merchandising flexibility to cope with fluctuations in demand for household goods, should they occur. But as the purchase of these goods shifts steadily online and to freestanding formats, many bulky goods centres will simply fall off the 21st century’s retail map.
In New Zealand, however, common sense prevails. Planners there are concerned about their high streets, sure, but unlike in Australia and the UK, they go in much more for shoppers’ rights.
This has enabled the rise of innovative shopping centres such as The Base in Hamilton, in the north island’s Waikato Valley. The Base is a fully loaded suburban hybrid centre consisting of a traditional enclosed regional mall, open-air power centre, and factory outlet centre all in the same property, amounting to 81,000sqm of retail GLA and counting. It is near 100 per cent leased.
The developer, Tainui Group Holdings, has also obtained consent to add another 20,000sqm of retail, along with 12,000sqm of offices, and a 10,000sqm integrated health centre. Consent will shortly be sought for a hotel.
Although Australian planners get a warm glow from mixed-use concepts that combine residential, commercial and prescribed retail space, they get icy-cold tootsies if anyone suggests blending retail concepts.
Yet never has it been more important for a retailer or shopping centre operator to work to a flexible operating plan from a flexible operating platform than it is today.
In the age of e-commerce, the challenge for commercial property owners and retailers is not going to be seeing the road ahead, but clearing it of the droppings that permitting agencies and other regulators leave in their path.
To adequately serve pockets of population growth, developers and retailers will need sites that are sized and operated according to 21st century consumer needs. Shopping hours, parking ratios, tenant composition, sustainability, accessibility, the whole ball of wax will need to be worked out with the consumer in mind for a change, rather than the theological preferences of government bureaucrats.
Shopping centre operators know that to protect their investments they will not be able to stick too rigidly to the same business models that have served them for the past 60 years.
Indeed, they have only prospered for 60 years because they’ve been able to roll with whatever punches were thrown their way, tinkering with the format, amenities and merchandise mix to adapt to changing times. Tying their hands now will be a disaster for the industry.
Hopefully, that’s not what the planners want.
* Michael Baker is a retail and property analyst and consultant. He can be contacted at Michael@mbaker-retail.com or www.mbaker-retail.com
Keywords: Michael Baker, property, shopping centres
Comments:
Friday, November 04, 2011 by Peter Buckingham
Excellent article.
From Effluent to Affluent (in a different context to the normal description we use in describing Socio Economics).
Interesting if here in Oz we will start gaining more integrated, mixed use type centres
Peter Buckingham
Leave your comment
Please enter a comment.
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Code:
Please enter the word displayed in the image above. Please enter the word displayed in the image above.
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Please note: all comments are subject to moderation for legal reasons and to prevent spam. We'll approve your comment as quickly as we can. If you don't see it appear you do not need to repost it.
Related news
Sunglass Hut launches floating popupWorld first for global eyewear brand on Sydney Harbour.
Metcash completing Franklins store sales IGA franchisees are snapping up acquired Franklins stores for rebranding.
Southgate reopens after redesignNew tenants feature in $26 million refurbishment.
Zara opens first South African store Spanish giant conquers its 80th country.
Follow us TwitterRSS Feeds
To receive the latest retail news, subscribe to our free daily emails
Sponsored Links
Now Leasing, Raine Square, New Perth CBD 3 level shopping centre
Why do the world’s top retailers choose Epicor? Because we deliver top performance! Learn how.
Grow your profits with Checkpoint, world’s leading provider of retail security, apparel labelling and retail merchandising solutions. Call us today on 1300 369 338.
Australian Retail Chain Directory
LOG IN HERE
BUY HERE
Editors Picks
Checkout-free supermarket unveiled Checkout-free supermarket unveiled
No queues, no fuss - but a shop without cashiers offers much more behind the scenes...
eBay app a form of 'digital shoplifting'eBay app a form of 'digital shoplifting'
An eBay app will let shoppers photograph a product in a retail store and buy it online instantly....
Multichannel 'may not win online war'Multichannel 'may not win online war'
Retail consultant Stuart Bennie questions the focus on 'multichannel' for retailers wanting to wi...
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