Whatever challenges await Gerald Jennings as he takes control of one of Yorkshire’s most influential business groups, they surely won’t match those he faced during the recession. In the depths of the downturn, he had to explain to an entire region why his paymasters had ripped a giant hole into the heart of Leeds and left it there for 15 months.
Land Securities, having begun its ambitious Trinity Leeds shopping centre project in 2008, took the decision the following year to stop working on the project until the dire economic conditions improved. “There was such an expectation because we were building a new heart of the city centre, but the recession was really hitting home,” says Jennings who, until the project got going again in 2010, bore the responsibility of justifying the decision to down tools.
“The challenge was communicating to key stakeholders why we had to stop and that we had every intention of going back on site once we had worked our way through the economic difficulties. We had to give retailers enough confidence to commit to joining us and investing in the city centre.”
Although not keen to dwell on personal upheaval now, the incoming president of Leeds Chamber of Commerce was also dealing with a testing family crisis at the same time. His son’s three-year fight with leukaemia put his professional pressures truly into perspective, no matter how demanding they might have seemed. “The team at Land Securities were fantastic in supporting me,“ he says. Fortunately that battle had a happy ending and his now healthy son is a graduate thriving in the Yorkshire property industry.
And Trinity Leeds turned out pretty well also, opening last year to great acclaim and now at 99% occupancy thanks to its latest tenant, a new £1.5m Brazilian barbecue restaurant. “My office overlooks the centre and to see 135,000 people on the opening day was a proud moment for everybody involved.”
As Land Securities’ portfolio director, Jennings’ remit covers Trinity Leeds, the White Rose centre in the south of the city, and St David’s shopping centre in Cardiff. White Rose, which is actually the project he is most proud of in his circa 15 years at Land Securities, is earmarked for an ambitious expansion with plans for a 13-screen cinema and shopping arcade with restaurants.
“White Rose has consistently over the last 17 years been in the top two or three of our best performing assets,” he says. In the wider Land Securities group, it’s perhaps unsurprising that Leeds has received more investment than anywhere outside London in recent years, given the £378m Trinity Leeds bill. The company’s apparent faith in the Yorkshire market is in contrast to cities like Bristol and Sunderland where sites have been offloaded in favour of opportunities in Glasgow and the South East. A stake in the Bluewater centre in Kent, and a thriving office portfolio focused only on London, are also contributing to the group’s current strong performance.
The firm sold £186m worth of assets in its half-year to September, and at the time of writing, a further £469m since then. Half-year, pre-tax profits jumped from £397.9m to £1bn, it reported recently.
With Leeds remaining part of what the company calls a ‘reshaped’ retail portfolio, Jennings is now focused on adapting quickly to shifting trends among shoppers to ensure healthy numbers are maintained.
“We’ve been very careful to analyse how consumers are thinking about their retail experience and how the Internet is affecting consumer behaviour,” he says. “It’s about understanding what the retail market’s going to look like in 12 months or five years’ time and planning ahead. But in doing so you have to retain a degree of flexibility because the retail market is dynamic and consumer habits and expectations can change quickly. You have to be fleet of foot enough to react. But also you can never know exactly what’s going to happen. Something can happen which blows you sideways.”
One trend set by centre owners is the ever accelerating creep of non-shopping facilities like food courts, cinemas, bars and entertainment spaces.
This is vital in the battle for footfall against the unstoppable charge of online retail and, says Jennings, Trinity Leeds is 25% leisure, compared to the average of around 15 to 20%. White Rose Centre, meanwhile, recently completed a £7m food court refurbishment.
“With 10%+ of shopping now through the internet – probably heading towards 15% – we have to think what is it about the experience of coming out that’s going to be special for people? So the idea of providing theatre in that space and experiencing something different is important to the success of a shopping centre as well as a high street.
“The advantage shopping centre owners have in delivering that experience is that they manage the whole of that space, whereas in a lot of our high streets or city centres, the ownership is quite fragmented. If you have 1,000,000 sq ft as we do at Trinity Leeds, we can deliver that ‘everyday wonder’ with anything from busking competitions to pop-up youth orchestras.”
And what of Business Improvement Districts (BIDs)? Might they hold the key to bringing together high street retailers, shopping centres and city centre influencers to collectively boost the draw of real world shopping? Certainly Jennings believes so, having witnessed their power elsewhere, and he is enthused by their emergence in Yorkshire.
BIDs are business-led and backed with a levy paid by traders which is used to support co-ordinated investment in the management and marketing of a commercial area. Leeds is the biggest UK city currently without a BID in place – with over 170 running across the country. But businesses will vote in February for the Leeds BID, following a lengthy consultation process, and, if successfully implemented, it is expected to bring £2.5m of direct investment into the city centre annually over its initial five-year term.
Sheffield businesses will also go to the polls in February for their own BID vote, while the smaller shopping hubs are considering, or already embracing, BID regimes. “Shopping centre owners who understand they are part of a bigger piece than just their ownership are the ones which have been most successful in BID cities.
“BIDs are not the silver bullet but they are one way that we can get people working collaboratively to improve the experience in the city centre.”
Even without BIDs, conditions have been relatively favourable for city centre retailers lately.
Against a worsening global economic picture, consumer spending has driven Britain’s recovery and at the last count, in October, sales volumes rose by 0.8% on September, boosted in particular by furniture sales. While the picture for 2015 is broadly upbeat, one PwC report warned in November that this credit-powered spending spree could only last so long – perhaps slowing in 2016.
Jennings’ own forecast comes with a note of caution: “With the general election coming up in May, we’re not quite sure how that might affect the consumer mind-set and therefore the consumer’s propensity to spend. There’s always a bit of uncertainty as you approach a general election and consumers might wonder what the result is going to mean to them.
Will they have less disposable income? But if we took the general election out of the frame, I think we would be cautiously optimistic.”
Aside from the impact of economic and political forces, technology is also dictating the current fortunes of retailers – for better and worse. Although depleting shopper density on any given Saturday, internet retail has given rise to ‘click and collect’, and the practice of trying in store, before buying at home.
As Jennings explains, the only way for retailers to respond is by stepping in line with the new world order of shopping. “Click and collect has been gathering momentum for a little while,” he says. “I think there’s always a difficulty in saying this is the new paradigm, this is the new world and you have to jump in with both feet. I think you have to be more considered and take an appropriate amount of time to really understand, is this a theme that is going to be continuing or is it just one of those new ideas which will burn bright and fade out?
“Click and collect is here to stay we believe and, as a shopping centre owner, we make sure that we engage as much as we can with our retailers to help them provide that service, through the website, digital media, mobile telephony and tablets – the whole span of digital media technology that enables communication with customers.”
Land Securities is also rolling out ‘beacon’ technology across its centres. This enables customers to receive targeted, location specific offers and discounts on their smartphones when they are visiting the centre.
Clearly market trends make such technology attractive to retailers, since shoppers are now seemingly inseparable from their mobile devices. Research commissioned by Google this year found that 30% of UK shoppers make purchases via their smartphone at least once a month, compared to 8% in France, 15% in Germany and 19% in Sweden.
“Beacon technology enables the immediacy of communication, but it has to be used in such a way that the consumer gets what they want and is not having something forced upon them. It’s about retailers communicating with consumers across the whole platform in the physical space, the internet and on devices.”
Meanwwhile, as well as staying in tune with the needs of individual retailers, Jennings is tasked with supporting businesses across the board in his chamber role.
The current vice president of Leeds Chamber of Commerce will step up to the president’s berth in the New Year. As he makes his way round the member businesses and “starts conversations” with non-members, much of the talk may be flavoured by the electioneering going on at Westminster and here in Yorkshire in the run up to the election.
No doubt the coming months will see the volume cranked up on talk of the ‘northern powerhouse’ – the interconnected northern cities concept in which Jennings believes retailers have an important role to play.
“For it to truly work every part of the city’s DNA needs to work together, so retail is a hugely important part of that. In many ways it can be the glue that keeps a city together and can be the reason why people connect to a city, and spend their time and money in it. If we want places like Leeds, Manchester and Newcastle to be seen as thriving European cities, we need to make sure that the visitors arrive thinking this is a great place.”
And Jennings is firmly in support of more devolved powers for the North. He also places the push for transport infrastructure improvements among the “big ticket” items topping his agenda. “Pandora is out-of-the-box on [devolution] and there’s no putting it back in. It is going to happen, but we need to define it a bit more.”
With his chamber hat on, Jennings believes he has a responsibility to dispel what he sees as myths about membership organisations. “When you think about chambers the perception can be that they are a bit stuffy or too redolent of a past era, or that they don’t have enough diversity of membership. Rather than just looking after the businesses that they always have, they need to think about new businesses and younger entrepreneurs. I would like the chamber to be seen as a forward-thinking, dynamic and challenging organisation that represents the views of the whole of the business community.”
A busy 2015 awaits Jennings, despite suggestions from some at a recent awards dinner that his career could be winding down. He won the Lifetime Achievement title at the Yorkshire Property Awards 2013, prompting colleagues to point out that such accolades spell the twilight years of an individual.
But with numerous other influential roles on his plate, besides the day job and chamber post, and covering the arts, business, education and social enterprise, there are no signs of this tenacious leader slowing down.
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