7 May 2016 – by Alexander Peace and Amber Rolt
More than a dozen large London supermarket sites are being brought forward for residential-led redevelopment as cash-strapped operators look to profit from the housing shortage.
The supermarkets are keen to cash in on London’s increasing land values as they continue to battle against each other in an aggressive pursuit to remain price-competitive.
Large, multiple-acre sites in central London with car parks can accommodate hundreds of homes and are worth tens of millions of pounds, which supermarket operators want to realise as they try to drive efficiencies in their portfolios.
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“Changing consumer habits have been a driver for the change through the effects on their trading performance,” said Will Andrews, lead director for out-of-town retail and leisure at JLL. “Operators are working hard to get best value from their existing floorspace: both from an alternative-use perspective and from successful stores adding in a mixed-use and generating value from unused airspace.”
However, while the big four supermarkets may be reducing store footprints around the country to cut costs, within the M25 they have been less willing to do so. Average daily turnover can reach £300,000 for inner London superstores, according to Knight Frank.
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