LSH Revo Report 2024

Research - 02/07/2024

LSH & Revo Report 2024: Investment surge forecast for UK towns & high streets

New report highlights renewed optimism for urban renewal

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A renewed sense of optimism is returning to the UK’s urban renewal community as significant investment and development plans are set to transform some of our town centres and high streets.

Download the LSH & Revo report in full here

According to the latest annual report from property consultants Lambert Smith Hampton (LSH) and placemaking industry body, Revo, around 72% of investors and/or local authorities are planning to deliver critical repurposing, regeneration and infrastructure projects in our centres over the next five years.

Public sector commitment is particularly noteworthy; with 90% of respondents indicating plans to invest in town centres, compared to 66% in the private sector. This surge in investment is anticipated to drive a renaissance in local retail and commercial spaces, fostering economic growth and revitalising communities.

The report presents a cautiously optimistic outlook for the next 12 months; with 42% of respondents feeling positive about the future of town centres and high streets, despite 27% expressing pessimism. This optimism is bolstered by a likely change in government, with broadly half (51%) of respondents neutral about any impending change and just over a third (36%) viewing this as a positive development for the sector.

Since the inaugural LSH/Revo research in 2020 the consistent message has been that the UK’s towns, high streets and shopping centres need to transition away from purely retail uses as the traditional town centre “anchor” and provide a more diverse and flexible mix of uses, services and amenities that are needed and relevant to their community.

A more blended mix of uses can help encourage visits, footfall and spend, as well as promoting resilient places whilst supporting a sense of belonging and pride.

Despite retail dropping behind other uses in the hierarchy of optimum town centre uses, displaced by preferred uses including hospitality, new homes, culture/heritage, public realm, healthcare and street markets, it remains a key part of the mix.

Dr Steven Norris, executive director at LSH, said: “There is a long-established consensus that the UK has a surplus of retail space. But we are now finally beginning to gain some clarity over what should replace it. A dynamic and diverse blended mix of uses is key to breathing life back into our town centres.  Although retail is still important to the “lifeblood” of many of our centres, the concept of retail-centric town centres has been consigned to the past. There is a clear appetite from both the public and private sector to get on with the job, which is positive news for this industry sector and the communities it serves”.

After a prolonged period of negativity, this latest report hints at a more positive future, albeit one which requires continued support from central government. While recent initiatives such as the Government’s Capital Funds projects (including the Future High Street Fund, Towns Fund, and Levelling Up Fund) have been warmly welcomed, the report calls for long-term more patient funding that recognises regeneration can take a generation, aligned with further interventions, particularly around the issues of business rates, online sales tax and planning reforms.

Revo operating board member, Vivienne King, said: “Irrespective of which party next comes into power, the message is clear; our town centres and high streets urgently need a collaboration of input from both private and public sectors in order to thrive. Though the financial challenges will likely remain for some time to come, there are plenty of levers that can be pulled to ease the burden. Reforming business rates to be a fair level of tax could provide the oxygen our high streets need, while a more holistic approach to planning would further support the growing appetite for multi-use town centre development”.

The report also underscores the importance of social value, with 62% of respondents delivering social impact initiatives beyond legal requirements. This trend is more pronounced in the public sector, where 75% of respondents are actively engaged in social impact efforts.

Overall, the LSH/Revo Report paints a more promising picture for the future of our centres and urban renewal, albeit this will be dependent on substantial public-private investment, and strong leadership at the national, regional and local level. As the UK navigates the complexities of climate change, economic recovery, planning reform, devolution and social impact, these insights offer a valuable roadmap for all stakeholders committed to fostering vibrant and sustainable urban communities.

Download the LSH & Revo report in full here

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