The latest announcement that the long-term leasehold for Festival Place shopping centre is up for sale could signal a turning point for Basingstoke’s flagship retail hub.
After years of uncertainty, especially following its placement in receivership in May 2023, a change of hands may present both good opportunities and risks for the shopping centre, its tenants, and shoppers.
Festival Place, which houses major brands Marks & Spencer, Next, H&M, Superdrug, Apple, Nando’s, Sports Direct, Five Guys, TK Maxx and Vue Cinema, has faced several challenges over the past few years, including the closure of big-name stores like Debenhams and Zara.
The rise of online shopping has also led to a number of units being vacant in centre, raising concerns about its future.
To make things worse, the shopping centre was placed into receivership in 2023, with BDO LLP appointed to oversee the process.
READ MORE: Festival Place shopping centre leasehold put up for sale
Although the centre has continued to operate as usual, the latest news of sale of the leasehold could bring significant changes—both positive and negative—to Festival Place.
One of the most obvious benefits of new ownership could be a fresh approach to tenant management.
The current state of Festival Place suggests the need for a proactive leaseholder willing to invest in bringing in new retailers and leisure outlets.
With the right investment, Festival Place still has the potential to once again become a vibrant destination for Basingstoke shoppers.
Savills, the real estate advisors marketing the leasehold sale, has said that "significant asset management opportunities" exist, with interest already shown in the former Debenhams space.
New lettings to Superbowl and Hans Buffet also indicate that demand is still strong for prime retail and leisure locations within the centre.
READ ALSO: Festival Place in Basingstoke placed in receivership
A motivated leaseholder would likely be keen to capitalise on these opportunities by aggressively seeking out new businesses to fill the centre’s vacant spaces, creating a diverse and attractive tenant mix.
New leaseholder could potentially also address some of the issues that have plagued existing businesses.
The recent closure of Festival Street Kitchen, for example, was a direct result of poor support from the centre’s management.
While announcing the closure on social media, the restaurant had said it struggled with a decommissioned service lift that had not been repaired for months, making it impossible to fully operate its business.
A more engaged leaseholder could offer better communication and support, helping businesses thrive rather than forcing them to shut down over unresolved disputes.
However, a new leasehold could also come with potential risks.
There is a possibility that a new leaseholder could increase rents or service charges.
SEE ALSO: Shoppers react to sale of Festival Place leasehold
Some businesses may already be operating on thin margins, and a sudden rise in costs could force more retailers to vacate.
There is also a possibility that a new leaseholder might bring in more national chains at the expense of independent retailers.
But for Festival Place to truly thrive, it will be crucial for the new leaseholder to balance profitability with long-term investment in the shopping centre, ensuring that it remains a vibrant and vital part of the Basingstoke community for years to come.
Festival Place chose not to comment when approached for a comment.
Basingstoke and Deane Borough Council Leader Cllr Paul Harvey said: “We welcome this news. The sale of the lease is a great opportunity to bring fresh investment to the town to strengthen Festival Place’s key role. As the freeholder of the site, we will support any transfer of the lease and work with the new long leaseholders.
“We know town centres need to adapt to the changing world of retail and introduce new activities and attractions to keep them thriving and support existing businesses as well as boosting the economy.
“The recent announcements of new names coming to town and the low vacancy rate for shops is a clear signal of the willingness to invest and confidence returning in our town centre following a difficult period for traders during and after COVID.
“This complements our work to breathe new life into the Top of the Town by improving the public areas and initiatives to make it more vibrant and welcoming and a nicer place to spend time. We are exploring longer term options for the town centre and look forward to Festival Place being an active partner in this.”
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