We are now several months on from the introduction of strict social distancing measures intended to slow Covid-19 infection rates. These measures had an immediate and profound impact on how we live and work.
We have all had to adapt, both as individuals and as part of wider organisations, and there are clear signs that the changes we have seen so far in terms of space, the economy, and the way society operates as a whole, will endure. In light of this realisation, many of us are pondering what this often referred to as ‘new normal’ will entail.
Office and Retail
Perhaps the most obvious changes relate to our offices and retail spaces where we are already seeing employers scrambling to ‘make safe’ physical stores and workspaces before customers and employees can be welcomed back through their doors.
In offices, the uptake of group communication and productivity software has been quickly adopted and continues to offer considerable benefits to the workforce in terms of facilitating more agile working. In the short term, this will be the default given the continued risk. Beyond this, there are fundamental questions to be answered around how and why we occupy office space, such as:
- What function does it serve?
- How should it be laid out - safety as well as form/function?
- Whether we want to or need to own space or whether we can we occupy someone else’s?
In retail, non-food continues to suffer – recent ONS statistics show a massive monthly decline also evidenced by the number of high-profile retailers such as Debenhams and Monsoon closing stores permanently, and even entire shopping centre operators considering their futures and could ultimately fail. Length and terms of occupation are increasingly being challenged which is bad news for developers and investors.
Also, the continued increase in online shopping (40% of non-food in March 2020) impacts not only on the number of shops but also their purpose, becoming more “showroom” than “transactional” and a foil for a more efficient online presence. That said, it is not all bad news. Although not enough to stem the tide, there is evidence of a return to more local shopping and greater support for smaller, independent retailers. Whether these smaller businesses can survive and the market flex sufficiently to allow new entrants as we enter a new phase of restrictions will be interesting.
A more welcome impact of the current situation perhaps is the focus on exercise with greater utilisation and enjoyment of outdoor spaces. Unfortunately, this has in many cases highlighted poor town planning and residential scheme design where such spaces have been sacrificed for profit. Likely, the provision or retention of community space and the quality of private external space in developments will receive greater scrutiny in future.
Specialist accommodation, such as student housing and residential care, could also change as more “communal” and shared spaces are shunned in favour of designs which could aid in the prevention of spread should future crises emerge, or at least allow for easier management and mitigation strategies to be put in place. Taking this a step further, the tragic loss of life in care homes may even result in more intergenerational households, giving rise to new dwelling design entirely. We may also see an increase in at-home care and support packages and a further move away from residential or institutional care for a greater number of people. Again, like retail, people have sought support locally through neighbours and a wider community network where this can and does exist. Could this be “designed in” to any extent going forward?
Food, Beverage and Leisure
Although the reopening of non-essential retail has led to greater “innovation” from predominantly local and independent food and beverage outlets, the majority have only been able to return to more familiar trading patterns as recently as 4th July and with strict social distancing requirements in place, albeit at a reduced rate of one metre.
As a result, those with smaller or more challenging spaces are still likely to find such measures to be unworkable leading to continued hardship. This impact will not only be felt by the quirky, artisan coffee shop. Larger leisure operators such as cinemas, theatres, and sporting venues with rows of close seating will also be massively affected. In such cases, the presence of enhanced physical barriers, such as the use of face coverings or screens, could feature but these are not always practical, and many may instead simply opt-out altogether. Public opinion and confidence will also be a factor. Undoubtedly, some will find it easier to return to their previous haunts and regimes, while others will remain cautious and may not fall back into old habits at all.
Will completely new leisure opportunities come to the fore? With home-based activities growing in popularity, is staying in the new going out? We have all missed the physical presence of friends and family previously taken for granted. The relaxation of restrictions has led many of us to seek ways to facilitate actual face time (whilst adhering to current social distance rules) when previously a phone call would have sufficed. Will these smaller social gatherings become the norm and if so what, if any, particular venues will be required to accommodate?
Implementing the Change
Some of these changes will occur naturally as the market and provision evolve in line with occupier trends. However, it is not hard to see that some of the changes will have profound impacts on the suitability of existing assets and/or (for new development in particular) present particular issues in terms of viability and deliverability.
The traditional high street and surrounding towns as we know them are already struggling, sparking a £3.6bn government investment. Retail aside, there are regions and sub-regions where other use classes are already unviable. The current situation will exacerbate and broaden this market failure, preventing the required changes.
So, who will take this forward? No one sector will likely want to or indeed could be successful in isolation. Equally, doing nothing at all is not an option, likely leading to plummeting investor returns and climbing loan default rates. The public-sector cannot claim immunity from the fallout either as it finds itself faced with falling business rates and additional costs of welfare and neighbourhood/place management.
What is clear then is the need for a coordinated approach in which the powers, funding, knowledge, capability and capacity of the different stakeholders are properly applied and for a mutually beneficial deal to be structured. Beyond this, sectors and agencies need to unite and for some of the current bureaucracy to be cast aside – the recent relaxation of planning requirements for the “repurposing” of certain vacant buildings which comes into force soon for example. Hopefully, a collaborative approach which encourages innovation and reduces red tape will be embraced and estate strategy will evolve, shaped by the new world that will emerge on the other side of this unprecedented global crisis.