Why property investors should be focussing on town centres | Guest insight from Excellion's Robert Sadler

UK town and city centres have endured a terrible decline. But cultural trends and a desperate need for new homes mean that these spaces are now enjoying a renewed focus of regeneration. Property investors should be taking notice early says Robert Sadler (pictured), Excellion’s VP of Real Estate, as he shares his analysis with us about the regeneration of UK town centres and the investment opportunities they present.

UK town centres has been in a state of decline since the 1970s when local councils and planning committees began approving out-of-town developments after realising the potential they brought for increased business rates income, while the easy accessibility of shopping centres and retail parks would tempt people away from often congested and hard to reach town centres, thus making room for them to be modernised and pedestrianised. In theory, this was to result in centres being revitalised and beautified, but in practice, it served only to retire them from meaningful use, paving the way for gradual and often devastating decline.

This decline then accelerated with the dawn of the 21st century as e-commerce rose to prominence with its promise of lower prices, greater variety of choice, and utmost convenience resulting in a drastic decline in weekend shoppers. Then the pandemic struck, pulling people away from the habit of physical shopping and introducing a boom in remote working which meant that the workplaces and commuter routes which once sustained weekday town centre shopping evaporated.

As a result, landlords, investors, and retail giants fled, leaving behind budget outlets, walk-in barbers, vape emporiums, and those all too suspicious American candy stores.

Between 2023-24 alone, high street store closures increased by 28.4%, leading to high street job losses increasing by 41.9%. And the demand to purchase high street units currently languishes at 27.4% Meanwhile, high street vacancy rates sit at 13.8%.

However, I believe that town centres and high streets now present an incredible opportunity for forward-thinking property investors, as cultural trends, regeneration projects, and the government’s desperate need to honour heady housing targets are destined to bring UK town centres and high streets back into sharp focus.

Why now might be exactly the right time to invest in the high street

The UK government has long been looking for ways to bring life back to town and city centres with limited success. But the arrival of this new Labour government could see things finally ramp up. Indeed, towards the end of 2024, the House of Lords published a 73-page report into the future of UK town centres entitled, High Streets: Life beyond retail? and concluded that the previous government’s revival plans “were not well co-ordinated”.

Furthermore, a government press release from December 2024 announced plans to empower councils to auction off leases for long-term empty high street lots to give small and medium-sized retailers a realistic and affordable path towards once again occupying our empty shop fronts. The government’s desire to support local economies and communities is expected to lead to further grants, tax incentives, or policy changes designed to encourage investment.

The Labour government has also made ambitious promises on new home delivery that may prove difficult to honour, especially when it comes to affordable housing. Town centres could be the answer. Affordable housing delivery is particularly challenging in urban areas where an increasing population is met by a lack of available space. As such, converting retail and commercial units into affordable homes or mixed-use spaces is an inevitable and, dare I say, sensible option, taking full advantage of the existing infrastructure and transport links found in such areas.

This can lead to a reimagined town centre where people don’t only go to shop, but also live, work, and relax. If handled with critical thought by forward-thinking investors and landlords with the enthusiastic backing of empowered local authorities, this transformation could result in the emergence of new homes surrounded by a thriving infrastructure of retail, hospitality, leisure, and work space.

Investors who purchase town centre assets today while they’re relatively cheap, could soon benefit from a captive audience of both consumers and businesses alike which will help diversify income streams, thus offering stability even in a fluctuating market and unsteady economy.

Proof of concept

There are a number of major town and city centre regeneration projects underway up and down the country, where millions if not billions is being invested in reviving depleted spaces into vibrant, mixed-use hubs, ranging from large cities such as Manchester, Liverpool, and Sheffield, to smaller regional locations such as Stoke-on-Trent, Dudley, Rochdale, and Mansfield.

But investors needn’t rely on the speculation of ongoing projects, because there are a number of completed regenerations that prove how much investment opportunity there is for fast moving, early bird investors who spot the potential returns that regeneration can bring.

I spent my childhood in Bracknell, Berkshire. I remember my boyhood in Bracknell fondly, but its town centre was badly neglected to the extent that I don’t recall there being a single restaurant to speak of. But in the 2010s, the town centre was flattened and radically regenerated. The extent to which it has revitalised the whole community is astonishing, turning it from a brutalist post-war town centre into a modern, attractive destination where homes, shops, restaurants and attractions harmonise to create a beloved mixed-use ecosystem. Based on the success of this project, the regeneration is set to be expanded with plans for a residential-led development with increased office space, community spaces, shops and cafes, and children’s play areas built around a new ‘market square’.

In a previous life I had some involvement with the Lewisham Gateway project in South East London, a regeneration focused on “reimagining a congested traffic island to create a well-connected community with a new commercial heart” (see this video). Phase 1 delivered almost 400 new homes alongside shops, a new public park, restaurants and cafes. Phase 2 brought another 106 affordable homes, 424 market rent homes and a further 119 co-living homes.

Elsewhere, the regeneration of Lockmeadow in Maidstone has revitalized the town centre with increased investment in local businesses and a vast increase in footfall. The regeneration of Blackpool’s seafront has breathed new life into its ailing tourism industry, while Hull’s Fruit Market and Liverpool’s Albert Dock have been turned into vital residential, cultural and creative hubs. Further success stories are found in Southend-on-Sea, Nottingham’s Lace District, Loughborough town centre, and Halifax town centre – the list goes on.

The takeaway is that regeneration works. Town centres and their high streets are never beyond repair and savvy investors can reap enormous returns.

Lenders love town centre regeneration

Here’s the really interesting part for property investors: lenders love town centre regeneration. They have seen plenty of proof of how regeneration projects can transform properties purchased relatively cheaply into immensely valuable assets that create beautiful new environments for local residents. Whenever I present these opportunities to lenders I find that there is plenty of debt finance available for investors who want to be part of town centre regeneration.

So in 2025, and with a new Labour government desperate to create a positive legacy, investors should be taking notice of the opportunities available to them to buy cheap property in well selected towns and cities. Many of these properties will allow a phased construction schedule, which facilitates continued income from outlets (such as supermarkets) to pay or part-pay the interest on their debt while carrying out the necessary development of the asset leading to strong returns.

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