Property developer Hammerson (HMSO.L) said on Wednesday it has submitted plans to convert the former Debenhams store in Leicester’s Highcross shopping centre into flats for rent.
The news comes less than a week after Hammerson suffered significant losses in 2020 amid the pandemic, and is attempting to sell off some of its malls to survive the crisis.
The scheme would provide around 300 new homes with “bespoke resident amenities including a roof garden.”
Mark Bourgeois, managing director UK and Ireland at Hammerson, noted that "while the structural shift in retail and changing consumer shopping habits have meant that destinations such as Highcross need to adapt their offer and mix of uses, well-connected city centre locations such as this will always be places where people want to be."
The need to reimagine retail outlets and high streets comes as UK retail footfall has plummeted due to coronavirus restrictions. UK retail sales fell sharply last month as a return to lockdown stopped people spending.
Data from the Office for National Statistics showed sales fell by -8.2% in January. Economists had forecast a -2.5% month-on-month decline.
Physical retail has been suffering at the hands of online shopping for years but the COVID-19 pandemic has accelerated and worsened that trend. Shops have been forced to shut during lockdowns, driving more business into the arms of digital players.
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The University of Gloucestershire has also announced that it has purchased a former Debenhams building to "accommodate ambitious plans for growth in teaching and learning, and provide a major boost to regeneration and post-Covid recovery in the historic centre of the city of Gloucester."
The university intends to refurbish the 1930s Art Deco building, offering some 20,000 square meters of space on five floors.
Debenhams is in administration. It had axed 6,500 jobs last year — around a third of its staff — and it was expected that more roles could disappear if a buyer can’t be found.
Meanwhile, Hammerson worked with private-rented-sector company Packaged Living to develop the plans and its submission follows a virtual public consultation which took place at the end of last year.
Members of the local community were invited to view the plans and attend a virtual community meeting and Q&A session with the project team.
The development would also provide major improvements to East Bond Street, where its entrance will be located, and will support up to 800 jobs on site and in the supply chain during the construction phase.
The company posted a £1.7bn ($2.4bn) loss — the largest in its history — after the pandemic wiped £2bn off the value of its property portfolio.
Hammerson, which owns the Bullring shopping centre in Birmingham and Brent Cross in London, said losses widened from £781m in 2019 to £1.7bn last year, as the value of its shopping centres in the UK, France and Ireland pummelled.
At the time, its CEO Rita-Rose Gagné said: "The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we’ve also seen an increasing number of retail failures.
“Combined, this has resulted in the largest fall in net rental income and UK asset values in the group’s history," she added.
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