X-rays by the food court: The CEO bringing changes to shopping centres

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Retail landlord Capital & Regional is considering introducing less-traditional types of tenants into its property, writes Joanna Bourke.

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The typical to-do list doesn’t include “get an X-ray” when going to a shopping center. But that may change soon.

A new deal means shoppers in one part of north London can watch doctors and nurses as they shop for pigs in blankets, slippers and saucepans next Christmas.

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The plan to place fitness centers next to shoe stores is just one way retail landlord Capital & Regional wants to reshape its shopping centers to keep pace with changing consumer habits.

The areas on and around the firm’s 540,000-square-foot Wood Green property may eventually become home to dark kitchens, flats, and an outdoor food market.

Standing in a rooftop car park, Capital and Regional boss Lawrence Hutchings calls the site a “community hub.”

The appeal of shopping centers has waned in recent years. Trafford Centre’s landlord Intu was busted last year and small sellers have made big bets against rival Hammerson, who owns part of the Brent Cross shopping centre.

Capital & Regional’s share price is down nearly 90% over the past five years. This year alone it has dropped by 20%.

Hutchings, 55, says he is “fully aware” of the challenges. He has been “growing” the business “for many years” by “repurposing and reselling our centers”.

“The key to success at our centers is to ensure that they are not solely dependent on fashion, but are able to meet the wider needs and requirements of the local population, whether it is a haircut, a medical appointment, a daily shop or a drink grabbing. Or a meal with a friend,” he says. “Covid has really accelerated those trends and made us more focused on how the space we have available can benefit the community.”

The Wood Green Center will be the first of 40 “community diagnostics centres” planned across England, which will welcome patients in the summer of 2022. X-ray, ultrasound, ophthalmology and phlebotomy services will be provided.

These types of scans and tests traditionally take place in the hospital. Investments by the NHS in shopping center clinics are aimed at reducing waiting times and accelerating access to treatment. Whittington Health NHS Trust, behind the latest planned 5500 square foot opening, and several new clinics are scheduled for city centres.

Capital & Regional is led by Lawrence Hutchings.

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Capital & Regional is led by Lawrence Hutchings.

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For property companies like Capital & Regional, these hubs are a new way to attract customers and fill space at a time when brick-and-mortar retailers who typically rent units are struggling.

Capital & Regional, which owns seven centers, including one in Walthamstow, recently lost Debenhams as a tenant and several other stores have struggled to make up the rent.

Hutchings, who has led the company since 2017, says, “I’ve been in this industry for almost 30 years.” challenging. Asset value was trending across the industry [during Covid],

The value of the group’s asset portfolio has declined by 7.5% in just six months. Thankfully, valuations are now stabilizing.

Hutchings grew up in Sydney and dropped out of school at the age of 16 to work at a sportswear retailer. He got into the real estate sector when he started as a trainee with a property agent. His CV includes JLL, Hammerson and Blackstone.

A father of one who lives in Hackney believes Capital & Regional is well set up for growth as consumer confidence begins to bounce back.

Hutchings says centers outside central London have attracted many visitors as more people work from home and shop locally. Lates in the first nine months of 2021 were higher than in the whole of 2019.

Capital and Regional have entered into two partnerships this year to make the most of their unused buildings and land parcels.

In March, it began working with REEF Technology, which took over the management of car parks at the firm’s Wood Green and Luton sites. REEF takes a percentage of the revenue from car parking and is looking to introduce alternative uses for some of the spaces.

The second deal is an agreement with a Chinese property developer. The pair will explore whether there is potential to build a house on top of an existing site, for example a loading bay or part of a car park, although planning consent will be required for new projects.

While he’s exploring new and exciting uses for the space, Hutchings is still enthusiastic about traditional stores.

“Despite the changes, we fundamentally believe that physical retail will continue to play an important role in people’s daily lives,” he says.

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