Town centres: how to re-boot investment in retail real estate

 

A government-commissioned report on revitalising retail in small and medium-sized towns has been submitted by the committee led by André Marcon, honorary president of France’s chambers of commerce.

The report confirms the broadly recognised principle of integrating retail activities in a comprehensive urban strategy encompassing the entire urban area. It states that such strategies are also necessary to reassure investors and to motivate them to develop new projects in town centres.

This is all true but having a strategy won’t immediately eliminate the risk of investing in troubled areas, which were abandoned precisely for this reason.

Given the current state of decline, only the public authorities can “prime the pump” to get private investment flowing again.

Priming the pump means taking on a stimulus risk to prove that it can work

And finally, the third type of public investment should focus on experimenting with new forms of retail adapted to the specific context of the market in small and medium-sized towns.

Whether investors put their money into real estate or into a retail business, they need confidence in the future and are open to public support. But, to convince them to come, or come back, local authorities must prove that they will find a viable economic model to run.

We mustn’t believe that all the innovations sprouting in major cities (as claimed by the media) can be transposed to radically different territories with lower flows and purchasing power. Helping shops to “go digital” will probably not be enough to make a real difference.  

We also mustn’t believe that retailers, especially the national and international brands, will jump at the chance to design new concepts to gain a hold in forsaken territories. Large urban areas offer far more stimulating opportunities.

Full-scale experimentation by towns and inventive retailers, with a serious project involving all stakeholders, is the only method capable of priming the pump and reassuring investors.

This deserves a genuine public effort, not only to attract investors, but, above all, to ensure the solid economic grounding of the planned public investments for urban renewal and commercial rent support.