Never before has the retail sector faced the unprecedented challenges that it does today. Faced with competition from e-commerce and shifting consumer preferences for other retail formats and social experiences, there has been a real and significant shift in the need and requirement for physical retail space on the high street and retail centres. With retailers consolidating their portfolios to reduce store numbers and combined with weakening consumer confidence and increases in business rates, the impact is all too visible on the high street and in retail centres, with vacant properties, declining footfalls and lower retail sales. This leaves owners of retail spaces in a particularly difficult position – how to transform vacant, derelict and declining retail spaces to make them more desirable in order to protect their investments? And, how can this be achieved in the most cost and time efficient way?
The oversupply of space presents opportunities for owners to reimagine the retail space that isn’t currently in use. The repurposing of retail space for alternative uses, such as leisure, fitness, food and drink, office and housing can have a positive impact on the wellbeing of communities and drive forward a change in the local economy.
Delivering a solution
When considering repurposing, developers have the opportunity to reflect on and incorporate new trends and behaviours, such as the need to work flexibly or have a net positive environmental impact. Proposals could include residential, office, social, medical, leisure and entertainment facilities as the product – which would provide amenities which are valuable, needed and useful.
The UK already has the legislative and policy framework in place to deal with delivering repurposing solutions, through the planning system. For most developers, they will be familiar with its own unique issues, but the planning system can also provide useful mechanisms to assist in repurposing retail space. We consider these issues and mechanisms below.
Change of use and permitted development
Planning permission is required for the carrying out on land of any “development” which is defined as the “carrying of building, engineering, mining or other operations in, on, over or under the land or the making of any material change in the use of any buildings or other land”. The basic requirement for planning permission to be obtained if there is a material change of use is however modified by the Town and Country Planning (General Permitted Development) (England) Order 2015 (GDPO) – which provides deemed planning permission for some material changes of use.
In this context, developers could potentially rely on the GDPO to change the use of vacant retail properties to other specified uses, without the need to put in a planning application. For example, under the GDPO a
Class A1 shop can change use to:
- mixed use of class A1 (shops) and up to two flats;
- class A2 (financial and professional services);
- class A3 (restaurants and cafés);
- class C3 (dwelling houses); and
- class B1(a) (offices).
- Some of these changes may be subject to conditions (such as the amount of floorspace that can change use or the building not being listed – see below) or require prior approval of certain matters, before the permitted development right can be relied on.
Also, developers will need to check with the local authority to see whether any permitted development rights have been removed through an Article 4 Direction, or in cases where there is a planning permission for the existing lawful use, a condition on the permission which restricts the use of the property to a particular use. In these circumstances, planning permission may need to be obtained.
However, where the GDPO can be used, this can provide a quick and cost effective way to repurpose an unused retail space for a more desirable use.
It is worth mentioning that the GDPO only permits the respective change of use. If external alterations are required to a property (such as changes to the façade, new windows etc.) in order to facilitate the change of use, these changes may require planning permission to be obtained…