Spotlight on: the multifunctional high street – and why it matters to your clients

Spotlight on: the multifunctional high street – and why it matters to your clients

Everything’s going local, from where we shop, socialise and exercise to how we access healthcare. Here’s why flexible workspaces have a vital role to play on the post-pandemic high street.

Town centres were in trouble long before Covid-19 turned our lives upside down. Online shopping has been slowly chipping away at footfall for years, spearheading the so-called ‘death of the high street’.

Even before the pandemic, every month in 2019 (with the exception of the Easter and Christmas periods) saw declines in visits to the high street – and overall there’s been a 5% decline in footfall since 2015. Meanwhile, the proportion of total retail sales accounted for by online purchasing hit 36.6% in January 2021 – up from just 7.1% in 2010.

It’s no surprise that some commentators predicted Covid-19 would be the final nail in the coffin for town centres. However, as restrictions begin to lift there are signs that the high street still has an important role to play in neighbourhoods. This is not the end, but rather a new beginning for small cities, towns and suburbs.

Rediscovering our neighbourhoods

Data from the government’s High Streets Task Force, which is looking into the future of British towns, argues that Covid-19 has led many people to rediscover their local neighbourhoods. 

Its 2020 analysis, backed by research from Manchester Metropolitan University, shows that between 1 March and 30 June footfall in smaller district centres fell by 34.5%, compared with a much sharper drop of 75.9% in larger cities during the same period. 

The Task Force found that 44% of high streets now provide a wide range of different services, not just retail, to their communities. These ‘multifunctional’ areas, which might include cafes, healthcare centres, education facilities and workspaces, have fared comparatively well during the pandemic. Towns that can be classified as such have increased by 8% from July 2019 to June 2020. 

Mark Robinson, Chair of the High Streets Task Force, says: “It’s clear that multifunctional town centres are on the rise. We now have the opportunity to accelerate this to meet the challenge of bringing [redundant retail space] back into productive use.”

And it isn’t only the UK that’s seeing this shift. In the USA, “dead malls” – formerly busy shopping hubs that have been all but abandoned by consumers – are more numerous than ever. Savvy investors now see them as ripe for redevelopment into residential property, entertainment facilities such as cinemas and theatres and mixed-use destinations that incorporate leisure facilities, specialist retail and flexible workspace.

The role of flexible workspaces

Flexible workspaces are set to be a crucial part of the multifunctional town centre of the future. Prolonged periods of lockdown and home working have proved the benefits of the hybrid approach for businesses, their people and the planet – and it’s clear that few want to return to the old 9-to-5, Monday-Friday office routine. 

As Robinson puts it: “The pandemic has brought forward changes that usually take years to occur. Instead of ‘How long is the commute?’, people are asking, ‘Do I live within walking distance of the services I need?’.”

Canny landlords and franchise partners are already seeing the opportunity in local high streets’ vacant shops. IWG has observed a 350% increase in new locations signed up by franchise partners in the first half of 2021, compared with the same period last year. 

Meanwhile, international firms including Standard Chartered bank and NTT have signed groundbreaking deals with IWG in the past six months. These and other enterprise partnerships have added more than a million new users to its global network of flexspaces. Firms as diverse as Google and HSBC are following suit, embracing the hub-and-spoke model of work. This allows employees to split their time between the corporate HQ, home and a local workspace.

The presence of flexible workspaces on high streets, near to people’s homes, will encourage increased footfall and establish working hubs that invigorate local economies. The presence of workers on high streets will provide custom for cafés, restaurants, shops and local amenities, supporting long-term local economic regeneration. In line with this, the Welsh government is already exploring the development of a network of community-based workspaces within walking or cycling distance of people’s homes – spaces that could be used by public, private and third-sector employees. 

Ultimately, the survival of the high street depends on the diversification of its offering. In response to the announcement of John Lewis store closures in March, Dr Amna Khan, a Senior Lecturer in Consumer Behaviour and Retailing at the Manchester Metropolitan Business School, commented: “As these stores are leaving the high street, there's a need for reinvention… We need people to [do] more than shop. What we need is high streets that are multifunctional, that offer leisure and employment, health, art and culture – and are vital to the communities for which they exist.”

Developing the 15-Minute City

The evolution of the multifunctional high street will also pave the way for the arrival of the ‘15-Minute City’. Developed by Professor Carlos Moreno at the Sorbonne in Paris, the concept is now influencing governments across the globe, inspiring them to improve people’s quality of life by creating cities where everything people need to live and work can be reached within a quarter of an hour on foot or by bike. 

According to IWG Founder and CEO Mark Dixon, the realisation of the 15-Minute City will be “one of the most dramatic and long-lasting legacies of the pandemic,” transforming sleepy towns into “vibrant centres for work and community life”.

“Why should companies go to the expense of providing prestige office accommodation in city centres,” he asks, “when their people have been proven in recent months to be just as effective and productive elsewhere – not just at home, but also in offices ‘around the corner’? 

“People want to work close to where they live. It’s going to stick.”

Find out more about the 15-Minute City in our whitepaper, and discover how IWG is helping thousands of brokers across the world find the right office space for their clients.