CEO of Meadowhall owner says 20% of UK shops could disappear
The chief executive of the company that owns the giant Meadowhall shopping mall, among other sites, has said that up to a fifth of shops could disappear from the UK retail landscape as consumer shopping habits change irreversibly.
British Land CEO Chris Grigg said on the podcast Leading With James Ashton that the shops that have closed so far won't be the end of it as the rise of online shopping is continuing to eat into demand for physical spaces.
“If we do the basic maths, are we going to see 20% less of shops over time? That wouldn’t seem at all surprising to me,” he said.
He added that “there will be fewer shops, on average those shops will be smaller [but] actually they will be better at serving the consumer because the others will die”.
British Land is one of the landlords that has been hurt by the large number of company voluntary arrangements that have been happening in the UK and last year it hit the headlines when it challenged Monsoon Accessorize’s CVA and rent cuts.
Overall last year, more than 16,000 shops closed in Britain and many of those were fashion businesses or retailers that had fashion as part of the mix. As well as those closures, many retailers have been renegotiating rent deals that have put further pressure on the profits of property owners.
This pressure can be seen from the actions taken by some of the UK's property giants and Intu, in particular, has been selling off assets in order to reduce its debt. British Land has fared better but has still been forced to report write-downs in the value of its portfolio.
This has also led to another trend both at the company and in the wider property sector with more and more landlords focusing on other types of property as retail becomes a smaller part of the portfolio.
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