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Refurbish or lose trade

Retailing is a customer-driven business and is, as a result, subject to constant change. Recent research carried out by Hammerson indicates that UK consumers expect an ideal shopping trip to be leisurely and relaxing but interesting and different at the same time. As people鈥檚 shopping and leisure time becomes more scarce and increasingly valued, retailing is reinventing itself as a leisure activity, with cinemas and family entertainment centres being introduced to extend trading hours.

Such developments do not only affect the out-of-town malls, retail parks and supermarkets that service more than 25% of the UK鈥檚 retail spend. They also involve the country鈥檚 750-odd centres of more than 5000m2, 400 of which date back to the 1950s and 1960s creating a large and expanding market.

In the 1990s, changes in the planning environment and a growth in demand for larger shops capable of accommodating the space requirements of multiple retailers led to increased investment in town-centre malls.

Investment has been necessary not only to provide additional retail space but also to correct widespread operational problems in the shopping centres, notably poor provision of anchor stores, weak retail identity, muddled circulation and inadequate parking.

The DETR鈥檚 revised guidance note PPG6, which restricts further growth of out-of-town shopping centres, and PPG13, aimed at reducing car journeys, is likely to encourage more development in urban areas. However, the planning and land assembly problems associated with developing new-build centres in town centres make refubishment an attractive option, despite the difficulties involved in working in shopping centres that remain open for trading.

The success of retailers during the 1990s has been reflected in increasing competition for quality floor space, which, in 1997 resulted in retail rent increases of 3-6% across the UK, according to property consultant Donaldsons. Although the national rate of growth in sales has slowed to 3% a year during 1998, high rates of growth in some sectors, notably department stores and national multiples, have created a need for space, much of which could be located in refurbished shopping centres.

Although the short-term outlook for retail is deteriorating, competitions between rival centres will continue to generate the need for further refurbishment investment.

The requirements for refurbishment

The main driving forces behind a refurbishment are:

• enhancing the value of, and where possible extending, retail space
• providing an attractive, modern shopping environment
• improving the tenant mix and retaining quality tenants
• providing a secure, high-quality, low-maintenance environment.

In these areas, the motives of shopper, retailer and developer largely conincide. But refurbishment is also likely to include extensive works to common services and safety systems that will not generate a direct return through rents or service charges.

The fabric of many existing shopping centres nees updating to meet customer expectations of retail architecture, and re-engineering to eliminate defects in circulation patterns and amenity provision that can affect turnover. The main re-imaging issues are the introduction of natural light and high-quality finishes, fittings and lighting, and the establishment of a strong retail identity.

From a re-engineering perspective, the problems that need to be addressed include:

• Sight lines These are often blocked by stairs, lifts and other mall features.
• Unit sizes Units typically need to be doubled to 186m2 to accommodate the needs of national multiple retailers
• Horizontal circulation Activity in central malls and courts can be increased by introducing catering facilities and event spaces
• Vertical circulation Inadequate lifts, escalators and stairs in older shopping centres are a common weakness. Limited capacity of lifts and escalators can suppress trading and rent levels on upper floors.

There are two main approaches to refurbishment; which of them is adopted largely determines the extent of the works:

• Defensive refurbishments These are aimed at retaining tenants and maintaining market share. They typically focus on improvements to public areas and the rearrangement of groups of existing tenants into clusters to extend the prime pitch.
• Aggressive refurbishment These projects aim to increase market share and rent levels by expanding retail sales area and improving the tenant mix. In older centres, this typically involves a shift away from food retailing to fashion shops and the national multiples.

Refurbishment solutions

Typical design solutions to the defects that affect shopping centres include:

Reconstuction of entrances
New entrances should increase the physical presence of the centre and meet current means-of-escape criteria (detailed in BS 5588). Towers or glazed feature canopies are often used to signal entrances, and recladding can improve the external appearance.

Remodelling of malls
Improve circulation, natural lighting an orientation by improving mall sight lines, insertin new rooflights and replacing existing finishes. The design of rooflights should balance requirements for natural lighting against the risk of excessive glare and solar gain.

Under the requirements of the Construction (Design and Management) Regulations, methods of safe access to high-level features such as rooflights will need to be addressed. External access gantries and restraint systems at roof level must be provided.

New finishes in public areas should be easily demountable to facilitate future refurbishments. Applying light or reflective finishes to heavy structural elements such as columns or downstands can reduce their visual impact.

Floor finishes
These may need to be replaced, although existing marble and terazzo finishes have proved to be very durable. Currently, granite tiles are the preferred high-quality finish. Whatever material is specificied, insurers are likely to press for a semi-matt, low-slip finish in public areas.

Vertical circulation
New lifts and escalators can make significant improvements to circulation patters, as long as they avoid obscuring sight lines or creating dead space.

Common facilities
The provision of high-quality common facilities is an important element in the competition between rival centres, and also with the high street. Some common facilities, such as cr猫ches and children鈥檚 play areas, can also encourage visitors to make the most of their shopping trips. Food outlets can encourage shoppers to extend their stay. Other facilities include WCs, baby-changing areas and information centres.

Safety
These include alterations to smoke extraction systems, smoke reservoirs in malls, and sprinkler installation. Adaptions to sprinkler systems and fire alarms can also involve work in tenanted retail units.

Mall lighting
A revised mall scheme, typically incorporating low-energy fittings, will be a significant element of the mall re-imaging. Additional 鈥渢heatre鈥� and accent lighting should be incorporated to provide for events and exhibitions.

Upgraded security and CCTV
Shop units should be fited with atuomatic fire detection systems linked to a cnetral monitor and voice alarm. Real-time colour CCTV systems are necesary to provide appropriate levels of security in the malls, common areas and car parks. Older mall layouts with poor circulation and dead-ends will require extra cameras to provide full security coverage.

Disabled access
Provision for disabled customers will involve remodelling WCs and providing ramped access. Further facilities could include automatic entrance doors, remodelled stairs, and dedicated shopmobility facilities

Signage/graphics/retail identity
Comprehensive re-signing, alterations to mall features, furniture and other fixtures and fittings, all contribute to the successful relaunch of a centre.

Car parks
The parking provision in older centres is often inadequate and, since a successful refurbishment will generate trade, extra capacity should be provided. Improvements required to meet the AA鈥檚 Gold Star criteria include lighting up to 200 lux, colour-coding of entrance lobbies to improve orientation, panic buttons and enhanced, visible CCTV security.

Refurbishing while trading continues

Refurbishment centres while shops are open is a challenge. It places a premium on the experience and quality of consultants鈥�, main contractors鈥� and specialist subcontractors鈥� staff. The design team must address the issues of access and phasing at the outset, allowing works to be carried out in the least disruptive, most economical way.

The key issues are:

Working hours
The time available for refurbishment works has become even more constrained, as Sunday and late opening eat into the time available for out-of-hours working. Sheeting, protection works, clear-away and pre-trading cleaning can typically take up three hours. Sunday opening alone has added 30% or 40% to the duration of an 18-month programme. The recent introduction of the European Union鈥檚 Working Time Directive, which aims to restrict night-shifts to a total of eight hours, including rest breaks, promises to create further programming problems.

Programme constraints and phasing
The Christmas trading period is the most significant programme constraint, although other seasonal events and individual retailers鈥� promotions also need to be accommodated. The complex phasing of works and on-site storage restrictions makes it difficult to maintain a continuous and consistent supply of materials.

Availability of information
Site investigatinos are vital to ensure that there are no unforeseen problems, such as structural defects or asbestos contamination, that could further disrupt the planned construction programme.

Health and safety
This means not only maintaining standards and preventing accidents, but also minimising the public鈥檚 perception of any threat or discomfort that might result in shoppers going elsewhere. Information flow and thorough contingency planning is important, as is the strict application of safety procedures. As a rule, a temporary crash deck will need to be installed below high-level works, while mobile hoardings, preferably decorated as a feature, can be used to section off piecemeal works at mall level, such as the daytime laying of new floor finishes. Further temporary safety measures such as temporary fire alarms, sprinklers and fire watches will be necessary while existing systems are being altered. With works being carried out around the clock, it is important to have one or more dedicated managers on hand to deal with on-site incidents affecting customers or retailers.

Working with tenants
Tenants are the lifeblood of a centre, and the long-term relationships between centre management and the retailers need to be taken into account. Few retailers appreciate how disruptive a refurbishment project can be, so it is essential that the project team establish co-operation and goodwill at an early stage. The priority for tenants is undisturbed trading, although even the best-managed project will have some negative impact on store performance. Disruption can be reduced by careful pre-planning, by close liaison between the contractor, centre management and tenants, and by high levels of on-site management. Apart from retail areas, further difficulties can arise in service areas, where congestion could result in delays to both contractor and tenant deliveries. Site congestion can be exacerbated where retailers refit their own units to coincide with the re-launch of the centre.

Procurement

Shopping centre works are complex, subject to change as a result of late retailer instructions and require very high levels of co-operation and co-ordination between contractor, centre manager, tenants and the public. Working in a trading shopping centre places a premium on the flexibility of the contractor, the quality of site management, and the approach taken to health and safety. As a result, it is important that the criteria for appointing a contractor should emphasise the quality of the site team and method statement, as well as quality, cost and programme issues. Key criteria in selecting a contractor include:

• its track record in retail refurbishment
• the level and calibre or resources it can commit to supervising subcontractor鈥檚 work
• its health and safety policy and track record on similar projects, with particular emphasis on the protection of third parties in occupied buildings
• its approach to liasion with tenants and the centre management team
• its flexibility and ability to respond to unforeseen events-on-site.

Traditional, single-stage, lump sum tendering is unlikely to be appropriate, as price competition could force the winning contractor to cut corners in site management, health and safety provision and the appointment of experienced, high-quality subcontractors.

Disruption could lead to more than a fair share of claims. In such circumstances, clients are advised to adopt procurement routes that focus on delivery of the client鈥檚 project, using construction management, some form of two-stage competitive tender, or a hybrid of the two approaches.

Construction management is appropriate for larger projects and has the advantage of enabling the employer to select not only the site management team but also the specialist trade contractors. These can also be appointed on the basis of quality, team and track record, as well as least cost. Good construction management procurement can be very successful at delivering fast, complex projects but the client also carries a much higher risk for the non-performance of trade contractors.

Two-stage competitive tendering for lump sum contracts has several advantages over a single-stage tender. It provides a degree of price competition while enabling the client to focus attention on and determine the site team and resources put forward by the contractor at tender stage. Two-stage tendering also enables named specialist subcontractors to be appointed. When using this procurement route, it is advisable to appoint the main contractor on the basis of further criteria such as:

• a method statement and approach to phasing works, to ensure minimum disruption and the safety of customers and centre staff
• previous retail experience
• pricing of preliminaries and site establishment costs to reflect the project鈥檚 specific phasing and access requirements
• the approach to managing and integrating subcontractors鈥� work and the percentage mark-up of the same.

In the second stage, two or three contractors should be asked to price the project, on the basis of their first-stage submission and the prices of specialist subcontractors procured in advance by the client. By focusing the appointment on the selection of a team rather than on a lowest cost tender, a two-stage process will ensure the focus of the project is on the client鈥檚 objectives.

Costs in use

Energy costs, particularly air-conditioning and lighting costs, are a significant component of a shopping centre鈥檚 services charge. Recent research by the 好色先生TV Research Establishment, published in Good Practice Guide 134, Energy Efficiency for Shopping Centres, gives advice and presents case studies that suggest that savings of at least 20% could be made on common area energy costs. Effective techniques include the active use of lighting controls, specification of low-energy lamps and the active managmeent of the use of escalators and air-conditioning, for example, by cooling malls overnight using ventilation rather than by air-conditioning during the day.

Cost model

The cost model features the refurbishment of the mall areas of an existing town-centre shopping centre with a total floor area of 40 000m2, together with the construction of an extension totalling 8500 m2, providing retail accommodation on two levels, arranged along a new single-storey mall. The refurbished mall areas within the existing centre total 4300m2.

The refurbishment works comprise the replacement of rooflights and mall finishes, and a new lighting scheme. Safety works include upgrading smoke extract, sprinkler and fire alarm installations. Works are phased to allow for continuous, uninterrupted trading throughout the centre.

Costs are current in October 1998, based on a location in the South-east of England. The level of pricing assumes procurement on the basis of a two-stage competitive tender, with design responsibility for elements such as rooflights being raken by the contractor.

The rates include allowances for phasing and out-of-hours working. Allowances for temporary safety installations are also included. Adjustments should be made to account for variations in phasing, specification, site conditions, procurement route, programme and market conditions.