Think you know Oxford Street?
Think again.
The Colliers Co-Head of UK & EMEA Retail, Paul Souber, looks at the changes that are afoot on London’s Oxford Street and how reducing retail space might be part of the answer to re-building the thoroughfare’s reputation as the foremost shopping destination of Europe.
Oxford Street has long been the dominant European shopping destination, dwarfing the nearest competition in terms of both footfall and annual spend. However, it is undeniable that the street has rested on its laurels over the last couple of years; gargantuan flagship stores have proven to be unsustainable for many retailers who have been buffeted by the combination of rising business rates and rental growth.
There has also been no comprehensive strategy for addressing the street’s traffic congestion and crowded pavements. In stark contrast, Paris is planning to give the Champs-Élysées a €250 million make-over to transform it into an ‘extraordinary garden’. Plans have been drawn up to reduce the space for vehicles by half and transform the avenue’s roads into green spaces for pedestrians.
Although linear in its design, Oxford Street has not benefitted from a development that has treated the entirety of the thoroughfare fairly. Some areas have undergone a significant transformation whilst others have remained unloved. It has taken the pandemic to bring everyone together and take the first steps towards a co-ordinated regeneration of the area. Westminster’s £150m public realm improvements focused on the street are the starting gun of rapid change, followed in early 2022 with the opening of Crossrail.
At the heart of this approach is the creation of the street as the spine for the West End; the base for which everything in the area feeds in and out. The goal to make Oxford Street once again the envy of all European retail destinations. Central to this plan is the reduction of retail space. I’m not calling for a dramatic ‘knock down and start again’ plan, instead a repurposing of some of the large floorplates in flagship stores that have proven themselves untenable in their current state and a more cohesive mixed-use approach to future development. To become the best retail destination in Europe, Oxford Street needs to focus on more than just retail to flourish!
We are already seeing a shift in terms of occupiers looking at Oxford Street. The first quarter of this year saw a huge drive in appetite from new entertainment concepts. The dual costs of rent and business rates had previously been a barrier to some of these brands, but the pandemic has created a rebalancing on the street, and it is now more accessible than ever. Leisure occupiers can take the large floorplates of flagship stores and are able to breathe new life into some of the redundant space we have seen come to the market. There are plans by the likes of John Lewis to create office space in its flagship. We also expect to see landowners and developers include hotels, cultural spaces, student accommodation, new apartments, public spaces and greening and for the street to increase its spatial volume upwards. This coupled with a drive to sustainability and reducing pollution will encourage people back to enjoy.
As final restrictions lift, we look forward to a sense of normality returning, it will be crucial to create a real energy and buzz, drawing people back though a more diverse range of attractions. The street’s phenomenal footfall was previously seen by brands as providing invaluable visibility and, as such, the property cost was often seen as being practically a part of the marketing budget.
