Perspectives predictions: subtle but important shifts in 2024
With the effects of climate change and geopolitical ructions dominating the headlines in 2023, trying to make sense of how our industry will be impacted in the future seems harder than ever. Nevertheless, we believe that some trends are discernible, so we are (bravely or foolishly – you decide!) presenting here our choicest reckonings on how the retail and leisure markets will shape up in 2024, accompanied by our regular caveat that these are predictions and not projections! We’ll be following up on many of these themes in forthcoming Perspectives, so check back here regularly. In the meantime, your feedback on all/any of our predictions is most welcome; do feel free to contact us at hello@p-three.co.uk, call us on 020 7101 3151.
Trying to make sense of how our industry will be impacted in the future seems harder than ever. Nevertheless, we believe that some trends are discernible, so we are (bravely or foolishly – you decide!) presenting here our choicest reckonings on how the retail and leisure markets will shape up in 2024…
Freddie
Leisure sector tunes in to music and cultural beats – music will take centre stage, along with other artistic and cultural forms, as the leisure real estate industry's dynamics shift towards the provision of memorable and immersive consumer experiences. Building on the success of innovative ventures like ABBA Voyage in Stratford, vibrant multi-faceted hubs will integrate with retail spaces, where visitors engage in live and pre-recorded music performances, art installations, and thought-provoking cultural exhibits. These destinations will redefine leisure, providing a unique blend of entertainment and education, as well as fostering a sense of community engagement and artistic appreciation.
Hannah
Beauty market growth reflects teen interest – anyone with a 10 to 17 year old will know how obsessed they are about beauty and skincare. Fuelled by online tutorials tweenagers’ and teenagers’ knowledge of brands and products far outweighs their parents. This age group has grown out of toys and is maturing in a world with an eye on sustainability and buying fewer clothes (mirroring the fact that fewer brands are targeted at this age group). As a result, they are directing “their” (usually their parents’!) cash towards skincare. The retail winners in this category include: Sephora, Space NK, Boots Beauty, Charlotte Tilbury, Pixi Beauty and Glossier.
John
More pep for prime shopping centre assets – the premier regional/super-regional hubs will experience strong growth (by all measures, including footfall, sales and occupancy levels) as they diversify their consumer offer towards being social hubs, providing entertainment, event, meeting and dining spaces. Centres like Lakeside and The Trafford Centre confirm there is no shortage of potential occupants.
Justin
Retailers add sustainable real estate to their own baskets – sustainable property was a big talking point at MAPIC 2023, so be prepared for a subtle shift in 2024 as retail occupiers see sustainable buildings as increasingly important, and in some cases an imperative, in determining store selection. Make no mistake: occupational decisions will still be driven by location, occupational cost, adjacent operators, size and configuration. But for major brands, with ESG objectives front of mind, sustainable property will be firmly on their shopping lists – look out for a dedicated Perspectives covering this topic in more detail later this year.
Kate
Central London F&B action is back – F&B operations in the capital’s core geographic markets were hit hard by COVID, but are finally bouncing back. With the West End already seeing some operators reporting sales 6% ahead of pre-pandemic levels, we see the City of London following suit, with vacancy rates likely to reduce rapidly in the first part of the year, although this is partly dependent on a resolution to the long-running series of rail/tube strikes, macro-economic/geo-political headwinds and of course the general increase in operational costs, all of which area hitting sector operators in the capital hard.
Michaella
Community uses and local independent operators to the fore – local businesses often provide unique products or services that reflect the cultural and artistic identity of the community they serve. Consumers, many of who are spending more time in their local area following the pandemic, are increasingly valuing authenticity and uniqueness and recognise the importance of supporting businesses that are deeply rooted in their communities. This helps to contribute to the local economy and is therefore likely become increasingly important to a range of stakeholders when making commercial property decisions.
Raquel
Shhhhhhh – rental growth on Oxford Street – one of the world’s top shopping streets confounded the critics in 2023, with solid performance anticipated in 2024, as a result of value retailers (for which the street had come under considerable flak) gradually being replaced by longer-term quality brands. As overall supply reduces and more new-to-bricks and mortar, fresh concept stores and international brands swell the number of flagships on the street, rents are (say it quietly) set to push upwards. We are very positive on London’s famous street.
Thomas
We will see an increased number of landlords look to partner with innovative operators or consultants to create their own landlord-owned leisure and F&B concepts which are then tailor-made to their schemes - this has been commonplace in the Middle East for decades but will see a significant growth in Europe as the combination of; a) the need to provide bespoke experiences for their customers and b) operators not being able to / wanting to pay rents which landlords are seeking will mean it could yield better results and financials for ambitious landlords and developers to operate their own concepts.
And finally... 2024 will be a big year for sport, so here are some non property-related predictions:
In the Paris Olympics the USA will collect the most medals
The Paris Paralympics will see more records broken than in any Paralympics before (eclipsing the incredible achievements at London 2012)
It’s too close to call who will claim the yellow jersey in the Tour de France – we are split between Jonas Vingegaard and Tedej Pogacar
Again, the trophy winner of the Euros 2024 is a tight shout, but we are putting money down on England and France as favourites
With the Lunar Year, which starts in February, ushering in the Year of the Dragon, we reckon there will be a resurgence of interest in dragon boat racing. Serpentine rowers: you have been warned!
Photo credits: Unsplash
