P-THREE, a real estate consultancy specialising in retail, restaurants and leisure, has today unveiled its Foodhalls Report – F-Hubs Insights 2021. The sector saw a boom in 2017 with more than 20 foodhalls opening in London alone and it is expected to gain significant traction over the coming years as the sector evolves into two new formats – community and flagship.
The foodhall market is estimated to grow significantly with the potential for 173 F-Hubs totalling 2.9 million sq ft across the UK, and significantly more across Europe. Investment into the sector is expected to be strong in response to a heightened awareness of local communities and a people-focused approach to regenerating places due to Covid which is forecast to have a positive impact on the next generation of foodhalls.
F-Hubs will still be centred on food, but they will also critically have the flexibility to respond to local demand for other uses such as the arts, cinema, retail, cultural, flex workspace or educational spaces. To reflect this the new generation of spaces are called F-Hubs where the ‘F’ stands for both food and flexible use.
Data drawn from P-THREE and CACI reveals that the consumer mindset accelerated five years in the first two weeks of lockdown in March 2020. Consumers now place a much higher value on a sense of localism, community and social responsibility as well as a step change in online engagement that was witnessed in 2020. This leap forward in consumer behaviour coupled with a reassessment by society on how it engages with ‘place’ and other factors such as reduced mobility and recessionary fears, have created a marketplace that is extremely favourable for community F-hubs.
Thomas Rose, co-founder of P-THREE, said: “Community F-Hubs have the potential to lead the regeneration of high streets and town centres. Located in the heart of local communities they will be an intrinsic part of the high street or urban quarter offering a truly mixed-use space combining anything from live events to daily co-working to ensure they draw a sustainable audience.
“The regular footfall and spend generated will act as a catalyst for local regeneration as well as adding value to neighbouring properties making the proposition particularly attractive to both private and public sector landowners and investors.”
Successful community F-hubs are likely to be in spaces which are:
- hyper local – at the core of a High Street or urban area.
- hyper relevant – linking people and giving them a reason to visit.
- hyper convenient – easily accessible to a diverse local audience.
- hyper connected – part of, and supported by, their local community.
- Hyper flexible – anchored by food but offering flexible event, community, retail and work spaces.
Community F-Hubs will need to respond to their local catchment, meaning deep local knowledge will be key to determining what other uses will work most effectively alongside an F-hub in any given location. With a focus on supporting local business it is expected that independent producers and off-line, real life leisure underscores an inherent and sustainable demand for community F-hubs.
Private investors and local authorities are well-placed to exploit the potential to own and operate community F-hubs, or to joint venture with entrepreneurial food operators to cater for the new generation of consumers. Empowering local residents and workers will create a sense of community pride and ownership that will be crucial to the financial viability of community F-hubs.
While the pandemic had a negative impact on the commercial vitality of many city centres in the short term, it is expected that London and select major cities will remain resilient in the long term, and within these locations flagship F-hubs have the opportunity to be a major draw.
These flagship F-hubs will be sought out in equal measure by tourists, office workers and city residents and will provide a complementary economic uptick to their surrounding city district.
Successful flagship F-Hubs need three essential ingredients:
- Brilliant location – Easily accessible for tourists and well-known to locals (though not necessarily the most central part of the city).
- High footfall – With capacity to cater for thousands of covers a day.
- An amazing building – Whether a converted historic property or an innovative new-build, both interior and exterior need to have the wow factor and put the F-hub on the must-visit map.
There is scope for flagship F-Hubs to grow as developers seek to take advantage of significant growth potential that will deliver impressive returns to investors. However, flagship F-Hubs are more likely to face intense competition from other city centres uses such as leisure and tourism. As such only international grade businesses will be able to operate on this scale. We anticipate a measured roll-out in the most attractive capital cities as opposed to operators racing to open multiple venues. Operators may also consider a more diverse geographic role out across countries to incorporate greater resilience to future localised virus outbreaks.
Our research indicates that there is potential for more F-Hubs in both London as well as other major European countries. With consumers walking an average five to seven minutes to get to existing foodhalls, we predict that densely populated cites could sustain several sites in close proximity.
“The retail and leisure sector has been hugely impacted by Covid, however, the sector will bounce back stronger than ever with an acute focus on community and engagement. The F-Hubs model offers local authorities, developers and investors an opportunity that has the potential to deliver great revenue streams whilst supporting community engagement and local business – areas of key concern to the next generation of consumers.
“With the potential to deliver more than 173 F-Hubs across the UK and more across Europe and with swathes of retail space coming back to the market across high streets and town centres, we are confident that this sector will flourish in addition to placing community at the heart of regeneration,” added Rose.