Treaty Centre trouble
Like other retail spaces, Hounslow’s Treaty Centre has endured a tough trading period since the first Covid lockdown in March 2020. It lost its ‘anchor tenant’ Debenhams in May 2021 when the company could not find a buyer. Marketing of the Treaty Centre in the commercial property press emphasised the value of Debenhams on the site. So, does that mean the Centre is doomed, and what are the implications for shopping in the area?
Two documents in the public domain suggest what happens next. The first is a proposal by the Freeholders of the Treaty Centre – represented by A G Quidnet BV, a company registered in the Netherlands, but wholly owned by the British Aerospace Pension Fund. Their agent, Columbia Threadneedle, commissioned a proposal by Assael Architects for ‘Regenerating an under-performing shopping centre in the heart of Hounslow’ This proposal is available here
This master plan converts the Treaty Centre space into ‘a range of sustainable land uses, including a community theatre, restaurants, offices, new healthcare facilities and a hotel, interspersed with 1,360 much needed new homes for Hounslow.’
The second document is a report to Hounslow Council’s Cabinet meeting on 7 September 2021. This requests permission from the Council’s leadership for a Memorandum of Understanding between the parties above to explore the options for ‘wholesale redevelopment’ of the Treaty Centre because of ‘prevailing macroeconomic conditions’. Hounslow Council has an interest as a landowner in the site, since the centre was built on Hounslow land in the 1980s. But is retail is such a bad place that conversion to flats is the only answer to the prosperity of the area?
In its forecast dated 23 August 2021, the Centre for Retail Research warned that the lockdowns and retail closures had removed the data that such organisations rely on to produce a reliable forecast. However, they do predict that online shopping, that grew so much during lockdowns, will reduce slightly in 2022 compared to this year, but not fall to the 2019 levels of 19.2% in total retail sales. One perverse benefit of the lockdowns was that some consumers saved cash that once went on eating out or cinema and theatre trips. That may support more consumer spending in 2022. Hardware sales grew in the first half of 2021 by 30.2%.
Overall, allowing for changing economic conditions due to the international impact of the pandemic, high street retail has a hill to climb to reach the sales of 2019. H&M, one of the key retailers in the Treaty Centre, reported that in late April 2021 it was sitting on £3.4bn of unsold stock. Data from the Office of National Statistics predicts that the UK economy will not recover to pre-pandemic levels until mid-2023.
The landlord of the Treaty Centre will not wait for shopping to pick up by 2023. Hence the urgency to redevelop the site to include profitable residential property. There may also be financial pressures on Hounslow Council to sell part of its share of the site for cash. Any reluctance to give planning permission for the redevelopment may result in a referral to the Secretary of State. But, realistically, there will first be an application for outline planning permission for the site, after the negotiations linked to the Memorandum of Understanding have taken place. Assael’s proposals may be changed significantly by this process. Probably by 2022. In the mean time, and by Christmas for sure, there may be shortages on the shelves due to transport and production problems feeding through from lockdowns around the world. Maybe that is the world that commercial landlords see and aim to cash in on change of use from retail to residential in the next year or so.