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Retail property crisis – really?

Chris Turnbull

Retail property crisis – really?

Retail property crisis – you could’ve fooled us!

As another news report (this time from Reuters: ‘UK high street property woes gain as retailers teeter’) about the number of shops closing down, I can’t help but compare the content of this article – and the many other ones like it that have been published recently – to our own situation.

As I wrote in my recent blog ‘The bigger they are, the harder they fall’ we have been trying to secure second premises for our growing kitchen design and installation business, Nicholas Hythe Kitchen Design Studio.  Currently we have a showroom on the High Street in Stony Stratford near Milton Keynes.  Last November, emboldened by our year-on-year growth forecasts (which, thankfully, we will hit despite the current retail climate for big ticket purchases), we started a search for a second showroom – this time in the Huntingdon area.  Given the state of the retail property market back then little did we think that, eight months later, we’d still be looking!

Our search started well. We identified what we felt was the perfect location.  It was in a building sited in the grounds of an extremely popular local home and garden centre.  We approached the owners whose representative was keen.  However, there was one stumbling block to overcome:  the premises had B1 planning permission, which meant it could only be used as office space (as general retailers we need A1).

Given its retail location we were confident that the change of use permission required from Huntingdon District Council (HDC) wouldn’t be difficult to obtain.  Christmas came and went and we continued to chase the landlord, whose job it was to discuss the proposed change with the Planners, to find out what they felt would be the chances of a successful change of use application.  So when it came back in February that we shouldn’t bother applying because it had no chance of being passed (citing they wanted to protect the High Street) we were incredibly disappointed.

Unbowed, we started our search for an alternative.  And, unsurprisingly when you realise the number of empty retail properties available, we soon found premises in a High Street – only to find they had A2 planning permission (designated for financial services companies, banks, building societies, estate agents etc).  However, we didn’t see this as a stumbling block as a change of use requires no local government permission, only the landlord’s consent.  Given, according to the commercial property agent, the property had been vacant for some two years we could see no reason as to why they, the bookmaking giant Gala Coral, wouldn’t welcome an approach so we asked the agents to do so.

When they had no success in reaching a decision maker in Gala Coral’s property department it was time to take direct action! I dropped an email to an ex-colleague who I’d worked with in a previous job and who now works for them asking for a contact name.  He was fantastic and within 24 hours I was speaking to their Group Property Director who promised to look into the issue and respond.  Later that day he ‘phoned me to say that they wouldn’t provide consent because, by doing so, this would change the Council’s quota for A2 premises.  This would, in theory, make it easier for one of their competitors to apply for planning permission to open elsewhere in the town – thereby affecting their primary (bookmaking) business.

Again, whilst disappointed, I could see their rationale.  Until we discovered that the Council had granted permission for a B1 (offices) site to become an A2 just a few doors away (thereby altering their own quota!)  When we approached Gala Coral to advise them of this it left them unswayed leaving us to draw the only conclusion possible – that they were and are – happy for the premises to remain empty and become increasingly dilapidated until they either find tenants requiring A2 premises or have a change of heart.

So, whilst not giving up hope on those premises – which have now been joined by a number of additional empty properties in the town (offering other bookmakers the opportunity to move in if they so wish) – we started our search for a third property.

Our search found large, empty premises that had once been a bathroom and tile showroom (not a million miles away from kitchens!) on a combined retail/industrial park on the outskirts of town.  They weren’t perfect and required a lot of work to bring them up to standard but, given our luck so far, we were prepared to compromise.  We ‘phoned the managing agents only to be advised that whilst the premises did have A1 permission there was a covenant that stated they could only be used for the sale of bathroom and sanitary ware (talk about narrowing down the list of potential tenants!)  The agents said we were welcome to apply to have the covenant removed and, had it been one of our preferred locations, we might well have done.

So that’s our story. We’ve yet to find a fourth property that we’d be happy with (location, location, location!) and we continue to press Gala Coral with regard to their vacant premises.  We’re now using commercial property agent contacts that ‘tweet’ regularly to try to extend our reach and we’re constantly on the lookout for somewhere but, as of the time of writing, have yet to find anything suitable.

So if the High Street is to be revived by new retailers replacing those who’ve gone out of business – as the government and local communities want – we have to remember that not everybody in the process – whether it’s landlords, local government or big commercial property owners – may see the issue in the same way.  We’re not politicians – just a small independent kitchen retailer who’s looking to make our way in the world, provide jobs and support our families.  We feel we’ve been thwarted by process, intransigence and corporate ignorance which has frustrated at each and every turn.  It’s clear (to us anyway) that Government – local and national – need to look deeper at the issue with a view to easing restrictions for small businesses if they, like ours, are going to encourage consumer spending and dig ourselves out of this recession

You wouldn’t have thought it that difficult!