One New Change: Big change in the big City

Five days a week, the Square Mile that comprises the City of London plays host to some of the wealthiest people in the UK. Yet when it comes to spending their bonuses, their options have traditionally been limited.

The success of Canary Wharf as a shopping destination has shown that purely office districts can work as retail destinations too, and not just on weekdays but at weekends. The City has been slower to catch on to this trend, and while it has small clusters of retail, most notably the charming Leadenhall Market and the ultra high-end Royal Exchange, the focus on offices has meant it’s never had a new development with a critical mass of retail.

Until now. In October, Land Securities’ One New Change development will open, adjacent to St Paul’s Cathedral. And the development is likely to lead to a big shift in how retailing in the Square Mile is perceived.

Suits you

The scheme replaces a 1950s office building and is located on an island site bounded by New Change, Watling Street, Bread Street and the City’s traditional high street, Cheapside. It is a mixed office and retail development, but the retail element is much more substantial than any City scheme to date, with three levels of retail comprising a total of 220,000 sq ft.

“It’s not just ground floor shops with offices above,” says Land Securities retail manager David Atcherley-Symes, who is overseeing the development of the scheme. “It’s always been thought of as a mixed-use building.”

Given the market conditions, leasing is progressing well, with 65% of the space let or under offer. A 22,000 sq ft Topshop and Topman store on the corner of Cheapside and New Change is likely to become a landmark store for the City, while Next, Banana Republic, H&M, All Saints, Karen Millen, Reiss, Kurt Geiger, Hobbs and Marks & Spencer Simply Food have also signed up.

Other fashion retailers including Tommy Hilfiger are also understood to be close to deals, while there will be a spread of upper mass-market restaurants including one from Jamie Oliver.

While Next and M&S are veterans of the City market, for Topshop and H&M the deals mark their City debuts, and are a reflection of the fact that the City shopper is not quite as unacquainted with mass market retail as you might think.

For while the 300,000 people who cram into the Square Mile every day includes more than its fair share of bonus-rich bankers, the majority are people doing the vital day-to-day work that keeps the wheels of commerce turning - who have a good disposable income but are fundamentally mass-market shoppers.

It’s not just the tenants that are new about the scheme. It’s a condition of the leases that retailers must trade seven days a week, a bold move for a shopping area where trade has traditionally been five days a week with a heavy bias towards lunchtimes and after work.

This is especially true as when you visit most parts of the Square Mile at the weekends you can hear the wind whistling through the streets. While Canary Wharf has developed a strong weekend trade, it has the benefit of parking.

However, One New Change has the benefit of not just the office worker trade, but being on the doorstep of two of the capital’s top tourist destinations. St Paul’s attracts 1.7 million paying visitors a year - many more walk past but don’t go in - and the walk from the Cathedral across the Millennium Bridge to Tate Modern is now a “must-do” for every tourist visiting the capital. As Atcherley-Symes describes it, he sees it as part of the London experience.

The scheme has been developed with one eye on the tourist trade and features a rooftop piazza and restaurant that will afford spectacular views over the St Paul’s dome. Marketing the scheme, particularly to tourists coming up the escalators out of St Paul’s tube station will be key so that they turn right rather than left out of the station.

Atcherley-Symes also hopes that Londoners living within a couple of miles of the centre also see the scheme as somewhere they will visit at the weekend. “The key for us is fashion and food for people who live within two miles of here,” he says.

While the scheme doesn’t have any parking, on street parking in the area isn’t restricted at the weekends, so there shouldn’t be any problem for those shoppers wanting to drive there. “People like All Saints see it as somewhere for its Islington clientele to go,” he adds, and loyalty cards and special events are likely to figure in the plans as part of a drive to ensure the scheme become ingrained in Londoners psyche.

Land Securities has experience of moving traditionally weekday focused London shopping areas to seven-day centres. Its Cardinal Place scheme in Victoria attracted retailers including M&S, Zara and Topshop, and succeeded in turning that from an office-based location into a shopping district for that part of central London, “The pedestrian flow there is exactly half that of weekdays at weekends,” says Atcherley-Symes.

Testing the city waters

However, he admits that it will be a new experience for many of the retailers and the deals need to reflect that.

“A lot are on base-and-turnover deals,” he says. “We’ve had to de-risk it as for most of the tenants this is a new thing.” In addition, some of the smaller retailers are on what he describes as “very short leases” to give them the opportunity to test if the City market is right for them.

Retailers already in the City say the market works well for them, but that understanding its unique customer base is key. House of Fraser opened a store in an untried location on the north side of London Bridge.

Brand director Matt Chambers said that, along with all its London stores, it has performed well in the past year, but says that when trading in the City “a brand’s got to be clear about who it’s targeting. The perception of who the customer is and the reality can be two different things”.

One New Change’s customer base is complicated further by the tourist element, but it couldn’t be better located within the City to capitalise on different shopper bases. It’s a bold call, but after the experience of Victoria, there’s no reason why it can’t draw the crowds in an unconventional location.