I’ve tracked UK construction projects for over a decade. The pattern became impossible to ignore around 2021.
Every struggling retail site gets the same prescription: mixed-use redevelopment. Add flats. Throw in restaurants. Call it regeneration.
On the ground: retail spaces that die twice.
Last month, I walked past a 2022 mixed-use conversion in Leicester. Flats above, lights on, curtains in windows. Ground floor: three retail units with brown paper over the windows and a phone number for the letting agent.
The flats sold within weeks of completion. The retail space has been empty for two years.
The Mixed-Use Formula Everyone’s Using
Chesterfield is converting the former Eyres building into 20 apartments above 10 retail units. Stoke-on-Trent wants to turn Lombard House into shops with six flats overhead. Newcastle-under-Lyme is transforming a 1960s shopping center into 42 flats and 10 commercial units.
The formula is everywhere: residential on top, commercial at street level.
Chippenham approved a £50 million scheme for 225 homes plus shops and restaurants. Cape Town is building the 8,000sqm Central Blue Shopping Centre as part of a residential development.
Same blueprint. Different locations.
The Numbers
The scale of transformation is massive. Research shows 12% of UK shopping centers need demolition and replacement with non-retail-led schemes. Another 40% require large-scale repurposing to add new uses around a consolidated retail offer.
More than half of all UK shopping centers need fundamental change.
Investment is flowing. Shopping center transactions hit £1.3 billion in the first three quarters of 2024—a seven-year high. Landsec has a 10 million sq ft mixed-use pipeline worth £5 billion across London, Glasgow, and Manchester.
The money believes in mixed-use.
The Problem Nobody Mentions
I visited completed mixed-use conversions.
The residential parts fill up. People move into the flats. The upper floors come alive.
But the ground-floor retail? Still empty.
Former Debenhams stores tell the story. As of early 2024, 63.5% of these units remain vacant. Bristol’s converting their old Debenhams into 500+ rental homes with retail and hospitality on lower floors. The residential will work.
The retail will struggle.
Retail Needs Critical Mass
Retail works when you create retail clusters. People shop where other people shop. They browse multiple stores in one trip. They compare. They discover.
When you scatter 10 retail units across a residential development, you lose that clustering effect.
You get isolated shop units surrounded by apartment residents who still drive to the retail park for their actual shopping.
The Parking Problem
Stoke-on-Trent’s Lombard House application hit a snag. The highways authority raised concerns about parking. They asked for Residential Travel Packs and cycle storage.
This is the tension in every mixed-use scheme: residents need parking, but retail needs footfall.
You can’t optimize for both. When you prioritize residential parking, you reduce the space for retail customers. When you limit parking to encourage walking and public transport, you make it harder for retailers to compete with car-accessible alternatives.
What Works for Retail
I’ve seen retail thrive in the UK. It happens when you build retail-first environments.
Chesterfield Waterside gets it right. This £340 million regeneration of the old Trebor factory site delivers retail and leisure uses adjacent to a new canal basin, with residential nearby but not stacked on top.
The retail has room to breathe. The leisure spaces create reasons to visit. The residential adds evening activity without compromising the commercial zones.
Separation matters more than integration.
The Density Question
Successful retail needs retail density. You need enough shops close together to justify the trip. You need variety. You need competition to drive quality.
When you convert a struggling shopping center into mixed-use, you typically reduce the retail footprint. You’re admitting the original retail space was too much.
But then you expect the remaining smaller retail component to succeed where the larger one failed.
The math doesn’t work.
The Planning System Is Accelerating This
Changes to permitted development rights in August 2021 removed barriers. You can now convert Class E commercial properties to residential use without full planning permission, up to 1,500m².
That’s ten times the previous 150m² limit.
The government backed this with £10.5 billion across the UK Shared Prosperity Fund, Towns Fund, and Levelling Up Fund. Analysis shows most successful projects feature town center housing components.
The policy is pushing mixed-use.
What This Means for Construction
You’re building residential units that will perform well. The housing market in town centers is strong. People want to live near amenities and transport links.
But you’re also building retail spaces that face structural disadvantages:
Isolated from other retail
Competing with established retail parks
Limited parking for customers
Smaller footprints than anchor tenants need
Higher service charges due to mixed-use management complexity
You’re creating a future vacancy at the ground level.
The Binary Choice We’re Avoiding
Mixed-use doesn’t always fail. But we’re applying it to situations where retail needs a different answer.
When retail struggles, there’s a binary choice: Does this location need better retail, or should it stop being retail entirely?
If the answer is “stop being retail,” convert the whole thing. Make it residential. Make it offices. Make it light industrial. Commit to what works for that location.
Manchester’s Northern Quarter has multiple examples of former retail buildings converted entirely to residential or office use. No ground-floor retail compromise. No half-measures. They identified that these specific sites couldn’t support viable retail and acted accordingly.
The conversions succeeded because they didn’t pretend to be something they weren’t.
If the answer is “better retail,” invest in it properly. Create the clustering. Solve the parking. Bring in anchor tenants. Build a retail environment that can compete with out-of-town alternatives.
The compromise position—some residential, some retail—often delivers neither effectively.
The Pipeline
Newcastle-under-Lyme’s £18.2 million Astley Place scheme is retaining the concrete frame of a 1960s shopping center while adding 42 flats and 10 commercial units.
The structural reuse is smart. The residential will fill. Homes England is backing it.
Those 10 commercial units? I’ve seen this. They’ll sit empty or cycle through short-term tenants who can’t make the economics work.
The residential tenants will look at the empty shop fronts every day and wonder why the developers didn’t just build more flats.
The Question
The construction industry is delivering what planners and developers are requesting. You’re building mixed-use because that’s what gets approved and funded.
We need to ask: Are we building retail spaces that can succeed?
When you strip out a building between August and March, install new MEP systems, add fire and acoustic works, and create 10 retail units—are you creating viable commercial spaces or checking a planning box?
The answer matters.
What Success Looks Like
Retail works when it’s purpose-built for current retail realities:
Larger units for category-killer stores
Excellent vehicle access and parking
Clustering with complementary retailers
Lower rents that reflect online competition
Flexible lease terms for modern retail operations
Small units in mixed-use schemes offer none of these.
Where This Leaves Us
I watch these projects progress through planning and construction. The residential components are sound. The building quality is excellent. The sustainability credentials are improving.
But we’re creating ground-floor retail spaces that exist to satisfy planning requirements, not because anyone believes they’ll thrive.
The 63.5% vacancy rate in former Debenhams stores is a warning. These are prime town center locations with high visibility. If they can’t attract tenants, what chance do smaller units in converted schemes have?
Maybe mixed-use is the future for residential. Maybe it’s the future for offices and leisure.
But for retail? I’m watching it become the past, one empty ground-floor unit at a time.
What You Can Do
If you’re working on mixed-use schemes, push back on the retail component. Ask:
Who is the retail for? Not “retail in general”—which tenants will this space work for?
What’s the evidence? Find similar mixed-use retail spaces in similar locations. What’s their occupancy?
What’s the backup plan? When the retail units stay empty, what happens? Can they convert to other uses?
The construction industry builds what it’s asked to build. You have the site knowledge and experience to challenge assumptions.
Use it.
Right now, we’re building tomorrow’s empty shop fronts. Spaces that look good in planning documents but can’t attract tenants in reality.
Retail needs retail environments. Not residential with retail bolted on to satisfy planning committees.
The sooner we stop compromising, the sooner we can build town centers that work.