The British Council of Shopping Centres (BCSC) event is the biggest event in the UK retail property calendar, and this year was no different, with a mix of investors, agents and retailers coming together to network in the ‘showcase’ area over the course of two very busy days.
BCSC’s decision to keep hosting the conference in London was a very wise one, in the face of stiff competition from Completely Retail, ICSC Retail Connections and other London-based retail property events. From my perspective working for a retailer focused firm, I was a little disappointed by the retailer turnout at the event - despite retailers being offered free passes to enter - and this is something BCSC need to work hard on turning round for next year. Having said that, the overall sentiment at the conference was very positive, with the retailers that did attend - such as J Crew, G-Star, Lululemon and Lindex - very much on the expansion trail, and property investors keen to showcase new shopping centre developments to match these requirements.’
‘Market sentiment is rightly strong at present, with very low interest rates, rising house prices, and low unemployment. From a fashion retail perspective this bodes well, as an improving macroeconomy should generate positive like for like growth, and given cotton prices have fallen considerably in the past few months; much improved margins.’
‘The UK is also very attractive for international retailers - and particular US retailers - due to low corporation tax. Our level of corporation tax is significantly lower than the US and all our key European peers, making the UK not only an attractive place to expand into, but also making our retailers acquisition targets for larger international firms looking to relocate their HQ to a more ‘tax-efficient’ location.’ This was certainly a topic of conversation at BCSC, with Burger King’s recent HQ move to Canada following their acquisition of Tim Hortons, and Walgreens oft mooted on-again off-again move to the UK given their stake in Alliance Boots. It is a matter of when, not if, more acquisitions take place of UK retailers by US retailers, as we live in an increasingly global marketplace and despite Obama’s threat to introduce legislation to prevent such moves, if US taxes aren’t reduced ultimately retailers have every right to choose where to locate their headquarters. This would certainly provide a very welcome investment boost to the UK.’
‘The UK itself is not without its tax issues however, and a major seminar topic at BCSC was business rates. At a time when legislation still hasn’t properly been introduced to ensure Amazon and other online pure-plays pay an appropriate amount of tax, business rates are still at artifically high 2008 levels, and in some instances now retailers are paying higher rates than rent. The playing field vs the online pure-plays must be levelled for bricks and mortar retailers if they are to compete long-term, and a reform of the archaic and inequitable business rates system we have here in the UK would be a very good place to start.’