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Turning Shops into Offices

Brick-and-mortar retail shops, both on the high street and in shopping centres, have been hanging on a precipice for quite some time. The advent of ecommerce, and the online retail giants that grew with it, presented brick-and-mortar shops with continuous challenges, the impact of which is starting to unfold.

News has broken that Westfield London has submitted plans to repurpose up to two thirds of its anchor store space into co-working office space, perhaps signalling the start of a larger shift in the way we use what has historically been considered prime retail space. Will this trend continue, and can we expect to see flexible office spaces mixed with retail units in a town near us soon? It takes a full understanding of the situation to know.

The decline of brick-and-mortar retail

The British Retail Consortium claims 2019 was the worst year on record for brick-and-mortar stores; it was the first year that there was an overall decline in retail sales, 117,000 retail jobs were lost, and 14,500 stores closed. The challenges for brick-and-mortar retail have only been compounded by COVID-19, as the ecommerce sector picked up the shortfall during lockdown to account for a total of 33% of all retail sales in May 2020.

Brick-and-mortar shops take up a lot of space in our towns and cities, so what does the decline in demand for in-person shopping actually mean for the UK landscape? Well, conveniently, alongside the progressive decline in the brick-and-mortar retail sector, there’s been an emergence of a new wave of thought regarding the way we work. Flexible office spaces in particular have revolutionised the office working model and opened up a world of possibilities.

Forward-thinking flexible office space operators will be able to make the most of the empty space left in shopping centres and on the high street, repurposing it as flexible or coworking office space that allows for a new way of working and living.

A new way of working

While centralised offices, usually in town or city centres, have been the de-facto way of working for decades, recent events have indicated a shift towards a decentralised workforce being the future. Even before COVID-19 struck, the number of people working from home in the UK had increased by almost 25% in a decade. The pandemic saw those numbers skyrocket, with up to 60% of the workforce working from home during lockdown.

There are certainly benefits to working from home, but they’re primarily reserved for employees rather than employers. A more favourable solution to adapt to the decline in favour for traditional offices as a workspace, and one that’s gained traction in recent years, is the ‘work near home’ model.

The work near home solution sits somewhere in-between a traditional centralised office model and working from home. It proposes that employees can get all of the upsides of working from home, without losing the positives that come with working in an office space, by making use of nearby coworking or flexible office spaces.

An employee on a work near home system could switch between working from home and using the flexible office spaces near them, with their costs getting subsidised by their employer. This means that they don’t have to make costly commutes anymore, while ensuring that employers have peace of mind that their employees are in a suitably motivating and social environment.

Watch this short video for more information on how consumer choice is shaping the flexible office industry…

The office-isation of shopping centres and the high street

In order for ‘work near home’ solutions to work, however, there has to be easier access to flexible offices and coworking spaces for the workforce. That means that the flexible workspace market has to expand outside of the metropolitan hubs it currently almost exclusively operates in, and into empty spaces closer to the entire workforce.

This is where the ‘office-isation’ of shopping centres and high streets comes in. As the retail sector continues to decrease in relevance (and profitability), a lot of empty units are going to appear in previous retail hubs. But the concept of repurposing high street units into office spaces is hardly new, with The Space opening up in a 17th century bakery in Farnham and a local collective office space opening in an old Poundworld in Chester in the last year alone.

What we’re now seeing is this trend of retail units being repurposed as office space expanding into shopping centres, too. The biggest news is that Westfield London, one of the largest dedicated shopping centres in the capital, has submitted plans to convert up to two thirds of its anchor stores into co-working office space. While no co-working operator has laid claim to the space so far, Westfield is reportedly considering launching its own co-working office space if they don’t find a suitable external partner.

Will we see more shopping centres adopt this approach – diversifying their offering to ensure their survival; hedging their bets, so to speak? It’s already happening. Co-Space, a leading co-working operator, has opened a new shared office facility in Broad Street Mall in the heart of Reading’s town centre. The collapse of Intu Properties has also made the fate of the Trafford Centre uncertain, and we wouldn’t be surprised to see office property pop up there, too.

It certainly helps that the greatest reform to the UK planning permission system since WW2 has just been announced, making it possible for commercial premises to be completely, flexibly repurposed without the need for local authority approval. That means that it’s easier than it’s ever been for shopping centres and high street stores to pivot and capitalise on the growing demand for work near home flexible office space.

2020 has seen two emerging trends converge: the decline in the relevancy of brick-and-mortar retail has met the increase in demand for models of working like work near home. What could result from this convergence is a revolution in the way we work. Imagine, instead of shopping centres and shops lining the streets of your local area, you had a choice of flexible working spaces to use as you work near home, with each operator offering something slightly different.

The rise of the work near home model and the office-isation of the retail sector might just be the spark that brings about a fundamental change in the way we work.