The rise and fall of the high street shop as an investment class
| DOI | https://doi.org/10.1108/14635781011058884 |
| Pages | 275-284 |
| Date | 13 July 2010 |
| Published date | 13 July 2010 |
| Author | Colin Jones |
| Subject Matter | Property management & built environment |
The rise and fall of the high street
shop as an investment class
Colin Jones
School of the Built Environment, Heriot-Watt University, Edinburgh, UK
Abstract
Purpose – This paper aims to examine the reasons for the rise and fall of the UK high street shop as
an investment class for financial institutions.
Design/methodology/approach – The paper begins by tracing the scale of investment by financial
institutions in shops and the reasons for their historic popularity. The next sections review the
changes in retailing and the consequences in terms of the current retail offering. The consequences and
implications for retail investment are then considered in terms of institutional portfolios and (relative)
investment yields. The research is based on a review of a range of secondary sources and an analysis
of the Investment Property Databank database.
Findings – The traditional UK high street as an investment class has been challenged by the
decentralisation of retailing and new retail forms over the last 30 years. While the city centre is still the
principal location for comparison retailing, the consequence has been a restructuring of institutional
investment portfolios and of relative yields. The number of high street shops in investment portfolios
has halved since the mid-1990s. There are threats from online shopping and the recent recession has
further queried the original arguments for investing in high street shops. However, the driving force
for the decline of investment in high street shops by financial institutions appears to be the
short-termism.
Originality/value – The paper reviews the changing fundamentals of retail property investment to
explain the decline of the high street shop as a property investment class.
Keywords Retailing, Financial institutions,Investments, Out of town stores, UnitedKingdom, Shops
Paper type Research paper
Introduction
The British high street has historically been at the heart of institutional property
portfolios. However, over the last three decades it has been subject to competiti on from
new decentralised retail forms – retail parks and ou t-of-town shopping centres. While
the planning system has consistently defended the high street town centres have also
been subject to significant internal changes in their retail offering. This paper
examines the underlying implications for property investment fundamentals and the
portfolios of financial institutions, and also considers how institutional investment
strategies have influenced the outcomes. The paper focuses on the UK but the issues
are also evident in other Western European countries (Evers, 2002).
The paper begins by tracing the scale of investment by financial institutions in
shops and the reasons for its historic popularity. The next sections review the changes
in retailing and the consequences in terms of the current retail offering. The
consequences and implications for retail investment is then considered in terms of
institutional portfolios and (relative) investment yields. Finally, the case for the British
high street as an investment class is reappraised.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-578X.htm
The rise and fall
of the high street
shop
275
Received March 2010
Accepted March 2010
Journal of Property Investment &
Finance
Vol. 28 No. 4, 2010
pp. 275-284
qEmerald Group Publishing Limited
1463-578X
DOI 10.1108/14635781011058884
To continue reading
Request your trial