The Retailer Summer Edition 2022

THE RE TA I L ER

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NEW PLANS TO DRIVE SOCIAL CHANGE ON OUR HIGH STREETS

Kirsty Black Partner Shoosmiths

R ecommendations in new report point to an excit ing future for our urban centres, with collaboration, communication and commu nity at its core. Across the UK, community-led start-ups are struggling to find available, affordable, long term retail space. At the same time, net zero targets are being diligently pursued by local authorities, and asset owners and multi-site occupiers are doing all they can to implement ESG measures across their operations and property portfolios. Everywhere you look, urban revivalists are striving to identify newways to deliver a more diverse and climate-resilient retail eco-system and add footfall and vibrancy to failing shopping districts. But the future remains unwritten. Over the last year, Shoosmiths has been part of a coalition of retailers, local authorities, land lords and socially-trading organisations, as well as Radix think tank, the British Property Federation, charitable trust Power to Change, local government network New Local and the High Streets Task Force, to explore how to drive positive social change in our urban centres. This group has just published a report, APlatform for Place s, which features a set of proposals designed to help bring businesses – and cus tomers – back into our towns and cities. The report’s recommendations are based on bring ing to scale successful examples from across the country that are already helping to drive footfall in under-utilised areas, rejuvenating stale retail districts and breathing new life into high streets. In so doing, these template projects are delivering value fromwhich all parts of the retail sector can benefit.

ESG commitments.” ‘‘

ESG leases ESG leases have, to date, focused primarily on the sustainability performance of a particular unit or site but, with social value increasing in importance, we can expect to see lease consid erationswhich integrate community benefits to feature more frequently going forward. However, the traditional challenge with ESG leases has always been the issue of cost, and this issue only gets more complicated as we start to consider social impact - where should the cost lie? Ask retail occupiers and theywill say that they are already meeting the costs of their own businesses in achieving their ESG agendas. This could be through employing local people, offering local apprenticeships or offering con cessions to businesses from the local area, for example. The landlord’s business is to pro vide a building for which it will receive a rent. However, if showing their ESG credentials is key to satisfying investors and shareholders, surely the cost should lie with the landlord? Ask landlords and theywill say that theywant to conduct their business with a social conscience, and this requires the buy-in of the occupiers that use the property. So, why shouldn’t those occupiers help them to fund initiatives which benefit everyone, such as allocating sections of their centres to new entrant businesses at low or no rent for a set period, investing in green technology and participating in forums to make the world a better place? Where the landlord needs to complywith legal obligation as regards common facilities, the occupiers seem prepared to meet the costs. However, beyond that, landlords will need to show actual benefit to the occupiers before they can justify passing on the expenditure.

Retailers need to start considering how their lease structures can better support their wider

Proposals Recommendations from the report include the creation of a high street buyout fund to help communities purchase empty high street property, a specific business rates relief for reg ulated socially-trading organisations, growing the Heritage Development Trust and a consul tation process around Community Right to Buy. These proposals aren’t meant to be a silver bullet for all of the high street’s woes but, in seeking to connect everyone from land lords, major occupiers and local authorities to start-ups, community interest companies and entrepreneurs, these proposals can help to build a platform that will turbocharge a more collaborative, solutions-focused approach that supports everyone. A central focus for the project has been on plac ing social value at the heart of future planning, a concept that is now beginning to be seen in more traditional retail occupier leases as part of the wider ESG agenda. As businesses are grappling with sustainability targets, the social impact of their operations is nowcoming to the fore, and retailers need to start considering how their lease structures can better support their wider ESG commitments, which are becoming increasingly important to their customers.

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