Estates Gazette • 15 February 2025 • Retail

Landsec is rethinking what it wants at assets such as Bluewater Shopping Centre in Kent.

At a time when the retail market is shifting rapidly, Landsec is looking to revamp leasing across its shopping centres. The company’s approach is built on a foundation of “fewer, bigger, better” – a strategy that, according to head of brand account management Pablo Sueiras, prioritises top brands, flagship stores and a focus consumer experiences.

“Our focus is on partnering with the very best brands to deliver flagship upsizes, flagship concepts and best-inclass stores,” said Sueiras in an exclusive interview with Estates Gazette. “Retail spending is increasingly concentrated in prime locations, and we want to ensure that our spaces are home to the biggest and best names in the industry.”

Bluewater has become a prime example of this strategy in action. The shopping centre, located in Dartford, Kent, and in which Landsec has boosted its stake to 66%, has long been a dominant retail destination, but its continued evolution highlights the company’s commitment to staying ahead of shifting consumer behaviours.

Landsec’s team is used to diving deep into market trends, analysing what is influencing purchasing decisions and consumer behaviour.

“We take a strategic approach, providing direction to all our assets based on how we see the market evolving,” said Sueiras. “That insight helps us identify the brands that align with emerging trends and have strong growth potential.”

One market segment in which Landsec has identified opportunities for expansion is health and beauty, which has seen 7% sales growth year-on-year across the company’s retail portfolio. This insight has driven deals including signing Sephora for Bluewater, which Sueiras said was a major win for the company.

“We understand what’s happening with the category, we understand what consumer trends are, we look for best-in-class representatives of that trend, and we arrive at decisions like prioritising the inclusion of Sephora within the Bluewater offer”, added Rob Hardie, asset management director at Landsec.

“It’s also very reassuring when our guests are telling us that they want a particular brand because it really enhances the case you can build with that brand that it’s the right location for them,” Hardie said.

Shopping centres compete not just with other retail destinations but also with other options people have in using their leisure time. For the team at Landsec, the emphasis on creating experiences for customers has never been greater.

“Consumers have higher expectations of the experiences that are delivered in retail environments,” Sueiras said. “So our strategy is about investing in enhancing the experience in the common areas, the amenity and the facilities and the sort of activations and events that we provide for them, but then also partnering with the best businesses, brands and restaurants and leisure concepts that provide amazing experiences.

“That is fundamental to what we are trying to do – create fantastic reasons to visit, deliver amazing experiences beyond just distributing and transacting goods.”

This experience-led strategy extends beyond retail. At Bluewater, Landsec has introduced competitive socialising concepts, outdoor adventure areas and attractions including the UK’s only outdoor static skydive and England’s longest zip wire by Hang Loose.

“It has become about how people want to spend their time and have a great experience and socialise together,” Hardie said. “What you have seen is a change in what floor space is used for in shopping centres.”

One of the most visible shifts in physical retail has been the contraction of department stores. Once the anchors of major shopping centres, brands such as Debenhams and House of Fraser have significantly reduced their presence, while John Lewis has closed several underperforming stores.

“There’s no doubt that the department store space has contracted,” said Sueiras. “At Bluewater, we closed House of Fraser, and across our portfolio we have significantly fewer department stores than we did pre-Covid.”

However, rather than seeing this as a loss, Landsec views it as an opportunity to reimagine retail spaces. At Bluewater, the space once occupied by House of Fraser has been taken over by Next, which is tripling its footprint.

Another example is the forme Debenhams store at St David’s in Cardiff, where Landsec will invest £17m to develop a city square, aiming to rejuvenate this part of the shopping centre.

The 102,000 sq ft city square will offer new opportunities for brands, including two restaurants with terraces and smaller kiosk-style units that open on to the square.

Will department stores disappear entirely? Sueiras doesn’t think so. “There’s already been significant consolidation, and what’s left is the best-in-class operators,” he said. “John Lewis, for example, still delivers very strong numbers at Bluewater because it has a loyal customer base and a compelling proposition.”

Although some industry analysts speculate about the decline of brick-and-mortar retail, Landsec remains firmly committed to the long-term value of dominant shopping centres.

“We are believers in physical retail,” Sueiras said. “We feel very strongly about the role that the best physical retail plays in a unified commerce ecosystem. And so, irrespective of what happens in terms of digital commerce, the best physical stores and retail destinations will still have a place and will still drive value.”

Landsec’s recent acquisition of Liverpool One, growing ownership of Bluewater, and ambitious plans to reposition, elevate and improve the proposition in assets such as Bluewater or Cardiff and Trinity, underscore this strategy.

“We believe in the long-term value creation in these very dominant retail destinations,” Sueiras added. “The top 1% of retail destinations command 30% of overall retail spend.”

As the retail landscape continues to evolve, what separates a successful shopping centre from a struggling one? Sueiras believes it comes down to two key factors – “exceptional experience” and “a need to curate”.

“Your proposition, your product, ultimately the experience you deliver, has to compete,” he added. “I think that’s the fundamental difference.”

Curating the right tenant mix is another key element in a shopping centre’s success. Bluewater serves as a prime example, having faced challenges for a time before Landsec stepped in to redefine its identity.

By repositioning the mall with a fresher, more dynamic and fashion-forward appeal, Landsec attracted a new wave of brands. As Sueiras noted, this carefully crafted identity has drawn even more retailers eager to be part of the mix.

But although Landsec is optimistic about the future, challenges remain. Economic uncertainty, changing consumer behaviour and shifting retail trends will all shape the landscape in the coming years.

“We operate in an unpredictable world, and there will always be hurdles to overcome,” said Sueiras. “But our view is, if we create the very best product we can, the very best proposition and experience, then if there are macroeconomic headwinds we can still grow by just capturing more market share and by being relatively stronger than alternatives and continue to grow, even if the overall market is challenged.”