Are mixed use schemes a dream ticket to city centre expansion for the multiples? James Durston assesses the pros and cons

Out-of-town is dead, long live the town centre. Government focus on town-centre regeneration has forced retailers to switch their attention here, where space is limited and demand for it high. This has meant going for mixed use developments that combine food stores with other uses.
One developer says: “The supermarkets have been told in no uncertain terms that out-of-town sites are no longer available.
“This means that they’ve been forced to get into mixed use in order to get town centre sites, and if they want to continue building, they will have to do mixed use each time.”
Since the multiples got into housing in the 1990s, mixed use schemes have become ever more necessary. Now, Tesco, Asda and Sainsbury have sizeable mixed use portfolios, and a raft of schemes in the pipeline.
So how has the mixed use scheme evolved? And what are the challenges?
When they first got into mixed use, the supermarkets exploited inherent benefits. Extra elements meant more people coming to the area more often, which would more than likely result in higher footfall in store.
Then local authorities cottoned on to the fact that they could use the supermarkets to help them meet social housing obligations. PPS6, announced in March this year, updated the PPG6 town centre guidelines, and made it clear that high-density, high-rise, mixed-use schemes should be encouraged, particularly in London where demand for housing was outstripping supply.
More recently though, a number of other uses have started to creep in -
leisure, office and even community facilities.
Sainsbury, arguably the most active proponent of mixed use, hasn’t been shy in plumping for more complex schemes.
It is working with Quintain Estates in Brighton to build a 25,000 sq ft store in a scheme including 355 new homes, offices, training and community facilities and two hotels. In Maidenhead, it is building an 85,000 sq ft store with 123 housing units, and the development will also include a piazza, car parking and improvements to the A4.
Plans are also under way to redevelop the bus depot in Portswood to include a 70,000 sq ft Sainsbury, 46 student units, 97 flats, a children’s play area and an outdoor piazza area, while a development in Milton Keynes, if approved, will include a 110,000 sq ft store, 400 housing units, retail, commercial and leisure units and a heat and power pavilion.
A true mix of elements creates a ‘destination’ with higher footfall. Research by surveying company Jones Lang LaSalle showed that “this is of vital importance in reconfiguring existing markets and making development financially viable”. When other organisations are involved, though, compromise has to enter the equation. Car parking, for instance, can cause a problem. PPS6 says: “Car parking should normally be located to the rear, underneath or ... above new developments.”
Grocery retailers find this far from ideal, as customers won’t be keen to struggle too far with heavy bags. But Jones Lang LaSalle’s director Kevin Foster thinks these sacrifices need to be made if you want to develop. “The key to developing in town centres is adaptability. If supermarkets can show themselves to be flexible like this, they will find they get planning consent sooner rather than fighting a long battle.”
Asda’s property communications manager Claire Irvine agrees that flexibility is key and that you have to be prepared to meet as many of the local authority’s requirements as you can without jeopardising the integrity of the store. “You have to tailor your mixed-use schemes to what the local authority is looking to do. It’s mainly in the south east that mixed-use schemes with housing are encouraged, because that’s where the demand is.”
In Romford, Asda is building a 50,000 sq ft store along with 229 private and affordable housing units, and, in Hounslow, Asda is signed up to The Blenheim Centre project, one of the biggest regeneration projects in the UK. Its 70,000 sq ft store there will fall below 484 apartments on nine floors above. This development works for both retailer and resident, she claims. Ray Daniel, MD at Blenheim Norwest, one of the developers, says: “Housing and food stores work well together. Housing always needs good sites, and food stores want to make sure the site works for them.”
Getting planning consent can be a tortuous process. Tesco has 185 sites across the UK earmarked for development, and after coming under attack from the Forum of Private Business for hoarding land, claimed that it was the protracted process of getting planning consent that had caused the build-up. One new store in Clapham was opened almost 10 years after the land was bought.
And even the creation of the plans in the first place can prove fraught. Tesco’s initial plans for a site in Orpington include a 42,000 sq ft store, 73 housing units and a primary health care facility but negotiations
with local authorities have run into complications regarding the precise nature of the health centre.
Meanwhile, Tesco has plans for a mammoth development in Tolworth. The proposed store will only cover 50,000 sq ft, but the scheme will also include 835 apartments, shops, and community facilities.
The real draw, though, for the government at least, will be the scheme’s use of natural resources. Power will be derived from solar panels, and waste energy will be converted into heating. Planning consent for this scheme is still to be granted. If all of Tesco’s other sites are passed Tesco’s floor area would increase by 4.5 million sq ft and could increase its market share to 45%, according to analysts.
Not all of these will incorporate mixed use, but Tesco does have plans to build 4,000 houses by 2008, and that level of regeneration will sit well with government.
However, simply incorporating mixed use elements does not guarantee a green light. London Mayor Ken Livingstone has just blocked a Tesco mixed use scheme in Highams Park. Despite reducing the size of the store and increasing the number of flats from 35 to 79 (36 of which are affordable homes) after a previous application failure, Livingstone denied consent again because it did not meet the sustainable development principles of his plan for London.
Katherine Edwards, corporate affairs manager at Tesco, accepts that flexibility to specific locations is an essential part of the process. She says: “We’re now thinking a lot more like a developer and not just like a retailer. London is a key area for mixed use schemes, but you have to be innovative.”
Mixed-use schemes in London and the south east have housing high on the agenda. But far from being an automatic synergy, the most successful schemes marry the demographics of the supermarket with the style and price of the flats on top.
Despite being a predominantly London phenomenon at present, it is likely that in the next few years other areas will see more of these housing mixes too.
Eric Hall, planning director at property developer Castlemore, says: “Over the next four or five years these housing and food store mixes will trickle outside of London into the surrounding counties.”
With Tesco’s apparent stranglehold on London sites this is perhaps just as well for the also-rans. Whether they can get as much value out of towns outside London though is questionable, especially if the Tesco property machine is as ruthlessly efficient in snapping up sites outside the city as it has been in it.
However, a gung ho approach to mixed-use won’t benefit anyone, say developers. Some are concerned that using housing as a means to gain planning consent could backfire.
Hall says: “From a developer’s perspective, mixed-use makes sense. But it does cause problems, because you risk diluting the quality on both sides and ending up with not very good housing alongside a not very good supermarket.”
A poorly built housing scheme could generate many headaches, with residents proving difficult over disturbance from shoppers, the noise from delivery lorries or the availability of car parking space. So Hall’s message is: be thorough.