In the final of our three-part series,  James Ballantyne,  Partner at Workman, discusses that property managers catering within shopping centres must ensure that all occupiers benefit from the round-the-clock approach,  as reported by Retail Destination.

Property managers must adopt a flexible and adaptive mindset to navigate the challenges of the nighttime economy, working alongside retail and leisure operators. The growing nighttime economy in shopping centres has impacted retailers and leisure operators, and their relationships with PM teams, signalling the need for a flexible and adaptive approach to property management to accommodate different trading hours, and needs of occupiers.

At the centre of London’s financial district, The Royal Exchange, managed by Workman and owned by The Ardent Companies, presents a complex microcosm of modern retail’s evolution, where traditional shopping gives way to a vibrant nighttime economy at the end of the day.

The venue now hosts three distinct hospitality spaces: Fortnum & Mason’s restaurant, the live jazz restaurant Engel, Orean restaurant Jang, and The Libertine bar in the vaults. Each brings unique challenges and opportunities to the historic building.

Engel, in particular, has become an evening attraction in its own right, hosting live music on Thursday and Friday nights, and monthly burlesque performances to attract diverse audiences. Its upscale, post-work-focused nighttime offering has required the property team to adapt its approach, opening the shopping centre for later hours to accommodate the jazz nights.

Janet Leatherland, Centre Director at The Royal Exchange, manages the intricate challenges of managing a historic space that now thrives beyond conventional retail hours.

Carefully structured service charges

The transformation begins early, with Fortnum & Mason serving breakfast at seven in the morning, while Engel and Jang each close around midnight. “We have a very long day of providing staff in terms of security, cleaning, and keeping the building open,” Leatherland explains. This extended operation requires a sophisticated approach to management, including carefully structured service charges that prevent daytime retailers from bearing the cost of additional services provided for evening activities.

The complexities of managing such a space go far beyond simple scheduling. The Royal Exchange is a Grade I-listed building, which means every modification requires careful consideration. “We’ve had challenging conversations about how we retain the look and feel of a Grade I-listed building, while functioning for bars and restaurants in the 21st century,” Leatherland says.

Licensing and permissions add another layer of complexity. The space is split between different owners – one managing retail, another managing offices – requiring intricate negotiations. The portico and terrace spaces involve additional stakeholders, including the City of London, each with specific requirements. For instance, the terrace seating must be removed nightly, and a 12-month license must be negotiated annually.

Security presents its own set of challenges. Staff must be trained to manage venues serving alcohol, requiring an additional qualification for handling potentially complex social situations. The 2024 Christmas period proved particularly successful, with foot traffic at The Royal Exchange increasing by 35% compared to the previous year.

The shift towards a nighttime economy reflects broader changes in retail and social behaviour. “We’ve reached the point where there are not many big retailers left that want to take big spaces in shopping centres,” Leatherland says. The solution, the market demonstrates, lies in reimagining these spaces for experiences rather than pure shopping.

But this new approach means carefully managing multiple stakeholder expectations. When Fortnum & Mason hosts exclusive events like its Food and Drink Awards – attracting celebrities like Jamie Oliver and Rick Stein – the management must ensure other retailers can continue trading while the event team is setting up. “It has to be a considered balance,“ Leatherland explains.

Space for experiences

It’s advantageous for occupiers to respect each other’s individual needs in order to achieve the best outcomes for all, because “retail alone is no longer a compelling enough draw for a modern shopping centre,” says Tony Elvin General Manager at Workman-managed prime retail and leisure destination Touchwood, also owned by The Ardent Companies.

At Touchwood, the venue mix is carefully curated to create an ecosystem of complementary businesses: 40% of retail purchases at the centre are now incidental, happening before or after people come to the centre to watch a movie, enjoy a meal, or other social experience.

This insight has propelled Touchwood’s innovative approach to nighttime operations: the centre now boasts 30 leisure operators out of a total 106 occupiers, including recent additions like Spinners – a competitive socialising venue offering mini-golf, bowling, and a bar – which demonstrates this approach.

In many ways the spike in competitive socialising is not surprising. Craving in-person interaction in the wake of the pandemic, but not content with time spent in pubs and restaurants, 41% of Gen Z customers in the UK have been to competitive socialising venues, and 47% would like to go in the future, says research from Kam Media. And for the increasing number of people choosing not to drink alcohol, competitive socialising represents an evening of entertainment that’s not centred around drinking.

The changing nature of socialising among younger generations also influences this transformation. “Younger people aren’t interested in drinking in the same way,” Leatherland notes, pointing to emerging trends like late-night coffee clubs, board game gatherings, and more experience-focused social activities.

Importantly, Touchwood’s approach does not involve additional costs for leisure and nighttime economy venues. The service charge remains consistent, recognising that these businesses are attracting overall footfall to the centre, and are often already facing significant economic challenges.

“Hospitality businesses are cost-heavy,” Elvin says, “particularly in the last five years.”

Currently, Touchwood boasts full occupancy, with every store either trading, fitting out, or under offer. The centre has been particularly successful in attracting independent cult-status start-up venues like Yakinori and Jamaya, which offer unique experiences that break the cookie-cutter mould of traditional shopping centres.

Of course, managing the needs of diverse occupiers with different operating hours presents unique challenges. At both Touchwood and The Royal Exchange, dedicated cleaning teams work almost round the clock to ensure the sites remain pristine.

Find out more: Retail & Leisure Property Management