Q&A: Landsec’s portfolio director Clare Dutton: “we’re investing a lot into retail”
Landsec is investing big in retail.
The real estate investment trust recently snapped up the 1.86m sq ft Metrocentre shopping centre in Gateshead, and earlier this year touted major retail as a “more attractive” sector than office or residential development.
In addition, Landsec has welcomed a number of ‘firsts’ to its portfolio: Garage opened its first store in the UK in Bluewater, while at Liverpool ONE, Lefties made its UK debut and Salomon opened its first store outside of London.
As demand for prime shopping centre space creeps up, how does Landsec pick the right brands for the right spaces? Completely Retail News caught up with portfolio director Clare Dutton to discuss the landlord’s approach to selecting new tenants, which retailers are the most acquisitive, and the role of physical retail within shopping centres:
How does Landsec identify the brands it wants to attract to its shopping centres?
“We’re close to the market, so we know of the new brands that are acquisitive. We also have a lot of data, because we reach one in every two consumers in the UK, in respect to things that our customers are looking for.
“So it’s a combination of knowing who’s in the market and understanding what their needs are, because we do speak to all the brands and get to know them, and knowing what the guest is looking for, we can marry up the two and identify where the opportunities are that would fit both.
“We do surveys regularly of what it is our guests are wanting in our centres to make sure that we are delivering, because not every centre is the same, it’s nuanced depending on where you are in the country and what the catchment is.
“At the moment a lot of the Gen Z brands are the most acquisitive, as well as new brands coming from North America. Some of the Korean beauty brands are still looking to do a lot of openings. Also brands we’re already working with, the likes of Inditex – we’re their biggest landlord in the UK – are looking to expand as well.“
Claire Dutton
How does having a good relationship with brand partners, such as Inditex, translate to their further expansion across other destinations?
“Because Inditex, or, every brand effectively that needs a portfolio discussion, has just one point of contact it makes it a lot more streamlined across the portfolio, and we spend a lot of time with the brands. Whether it’s Bershka, Pull&Bear, or Stradivarius, we get to know each of the brands and show them around our assets.
“Having understood what their needs are, what our guest needs are, we can marry up the two and identify opportunities that we think would be successful for them because we understand their business needs. And I think they trust us because they know Landsec are a big operator in the UK, we’re investing a lot into retail at the moment.”
You have previous experience working in tenant representation, how has this helped you when working with retailers at Landsec?
“I think it’s been really beneficial, because I’ve been able to see it from both sides of the fence. Being a tenant rep agent and spending a lot of time with the brands, you get to understand their needs, you get to spend a lot of time with them getting to know their business and who their customer profile is. And then coming across to the landlord side, you can see it from the other side of the fence as well.
“So you’re trying to find the win-win, it’s a partnership, so you’re trying to tick the boxes on both sides so everyone’s happy with the result.”
Lefties’ debut UK store at Liverpool ONE
How important are physical stores to retailers?
“We’re seeing that physical stores are still really important to brands. We’re seeing brands still continuing to take fewer, bigger, better stores. They are becoming increasingly more choosy about where it is they are looking to invest. From what we can see, they would rather not open a store than open a store that’s compromised or not in the exact right location.
“I think as we give the brands more reasons to visit by investing in our portfolio, we think that we will still continue to be attracting the really relevant, interesting brands into our centres, just to create places that people really want to spend time in.
“We are noticing now, in the ‘best’ centres if you like, we’ve got really low void rates and we’ve got a lot of brands wanting to open with us. So we are seeing for the first time in quite a long time, competitive tension again for the best units in the best places, which is helping to drive rental growth and income growth. Our occupancy is the highest level it has been in the last 20 years.”
Landsec’s shopping destinations include Bluewater in Kent, Glasgow’s Buchanan Galleries, Liverpool ONE, London’s Southside Shopping Centre, St Davids Cardiff, Westgate Shopping Centre in Oxford, and Portsmouth’s Gunwharf Quays.