A recent change to the Use Classes Order system in England is already having a substantial impact on our town centres: both the composition of future high streets, and more specifically, the various roles that healthcare will play in high streets of the future.
The new Class E use class category, which has been created for commercial, business and services, is wide-ranging in its effects and will create greater flexibility for changes in use between what were previously separate use classes. This includes shops, office buildings, research and development facilities, clinics, health centres, creches, day nurseries, day centres, gyms and most indoor recreation uses. For instance, a surgery may now convert to a soft play centre, a research facility to a retail unit or a dentist to a day nursery without the need for planning permission.
This change has come about to help protect the future of our high streets and town centres. And the policy shift indicates a belief that alternative occupants – particularly those, such as healthcare, which are less dependent on economic cycles – are an important component of the solution.
Carter Jonas recently examined the potential impact of these changes by analysing data on the retail stock in 30 of the largest city centre retail markets in England, not including London. The 30 centres were found to have a total retail stock of 55 million sq ft and office space equating to 145 million sq ft. This equates to almost 200 million sq ft of retail and office space across these 30 town centres that has the potential to transfer to other uses contained within Class E.
Prior to the pandemic, the potential for a GP surgery to relocate to a former retail or commercial unit was not only complicated by planning issues but was unlikely to be financially viable. However, with a significant number of shops now redundant, landlords have taken a more flexible approach to accommodating those tenants that are unlikely to be impacted by future recessions or lockdowns.
And that is exactly what is happening. Exacerbated by the pandemic, entire rows of shops are now closed, and large department stores, which once provided the ‘anchor’ to major shopping centres, along with convenience, footfall and employment, are closing at an alarming rate. In many instances, it is healthcare occupants which are taking up these properties.
In Oxford, where I am based, the large four storey Debenhams department store, which had served the city since the 1800’s as a retail premises, closed in 2020. But the building will not stand empty for long. Now that the building is known to be vacant, Carter Jonas has been contacted by various life sciences operators enquiring after its potential suitability for their use. Increasingly, these types of businesses are looking for lab space in cities where they can work closely alongside universities and attract young professionals. That such central and iconic buildings might be occupied by a life sciences company represents a significant step forward for the industry which traditionally, tend to be located in out-of-town science parks.
A change of similar proportions is being seen at the Clarendon Centre. This 1980s covered shopping centre in central Oxford is currently allocated purely for retail use. However, the planning application that we have submitted recently has a much smaller retail component the scheme and includes provision for life sciences, research and development facilities, along with other mixed uses including student accommodation. The future Clarendon Centre will no longer be primarily a shopping centre; it will be a mixed-use building with healthcare at its heart. Again, this will benefit local healthcare and medical research organisations. It also adds to the viability of the scheme and brings vitality back into the City Centre.
It was reported recently by Planning magazine that amid the coronavirus-instigated economic crisis that is currently battering most high streets, few landlords, occupiers or developers have so far made use of the new freedoms brought about by the use class relaxation. But our experience in healthcare is quite the opposite.
On a national scale, the NHS’s estate rationalisation programme aims to release surplus land for much-needed housing, nursing homes and a host of other facilities to recycle capital into the Health Service. It now has much greater freedom with which to do this. As we look forward to the Government fulfilling its election promise of creating 40 new hospitals, the potential for diversification, new locations, and integration with other facilities, including transport networks, is much improved.
Healthcare may be the answer to many more of the nation’s problems than we first thought.
For further information, please contact a member of our team:
Huw Mellor
Partner
07739 519195
Huw.Mellor@carterjonas.co.uk