Demise of Intu – An inevitable step along a pre-destined journey?
July 1, 2020
Valerie Conway
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That debt laden Intu finally went into administration last Friday did not come entirely as a shock to many observers of all things retail. While COVID-19 undeniably represents the massive plank that broke the camel’s back, the financial picture for the Shopping Centre giant had not been a happy one for some time.
The steady shift in shopping patterns away from bricks and mortar to online had already started to attack traditional retailer profit margins, and therefore indirectly that of Centre owners. Reducing demand for expensive retail floorspace and increasing pressures from renegotiation of rental packages following high profile occupier Company Voluntary Arrangements, together with the shrinkage of prime retailer representation to only the best locations was already taking a toll.
The lumpy monolithic structure of many shopping centres, so well suited to traditional retail, also seems harder and slower to adapt to the evolution in consumer behaviours. The case for ‘reurbanising’ centres was trailblazed some 25 years ago by DLA at Merry Hill but was resisted and frustrated. Now variety, visitor experience, evening entertainment and an instagrammable environment are increasingly important parts of the ask, High Streets are in many ways more fleet of foot and flexible to adapt to the new drivers for success.
So arguably the financial challenges facing the big shopping centre owners were inevitable, and COVID-19 simply accelerated the process by smashing a hammer through already stressed income profiles.
But what might this mean on the ground? Possibly a further polarization between the massive “category killer” centres like Thurrock Lakeside, Cribbs Causeway and the Trafford Centre which attract footfall from a much wider area and are more of a destination, and those which fulfil a more local or sub-regional role. Whilst in the long term the Goliaths may well adapt and survive, prospects may not be so good for the likes of Derby, Uxbridge and Stoke. The former Broadmarsh Centre in Nottingham, already closed as refurbishment works have been suspended by Covid, may never open as an Intu again, or even as a shopping centre…
It will be interesting to see who is in the market for the lower order centres and whether the growing role of Local Authorities in direct ownership/intervention to support and regenerate their town centres will extend to these locations. There is an exciting opportunity to take part in the movement to replace or adapt them and to craft the space they accommodate back into the grain and future of our towns.
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