‘The change in dynamics of the retail High Street, coupled with the economic downturn, has see an increase in popularity from both owners and occupiers to the pop up shop culture’, states Peter Greig, Manager of the Valuation Services Department for Goadsby.
If appropriately constituted, there can be benefits for both the parties. The tenant is able to trial their proposed business in a favourable location and often on terms less onerous than would be the case for a typical retail lease. It can form part of a PR campaign for a new product or brand, and clearly, if the business is successful, it may take more substantial occupation on the same premises thereafter. For the landlord, it provides an opportunity to mitigate vacant property costs by perhaps requesting that the tenant become responsible for business rates, it will reduce
insurance costs – which increase if a property is vacant, and reduces potential for the property becoming damaged, whether through winter storms or via break-in’s, squatters or the like.
Recent changes to Permitted Development Rights allow units of Retail (Class A1), estate agency (Class A2), restaurants (Class A3) and takeaways (Class A5), business units (B1), children’s nursery premises (Class D1); or premises used as cinemas or dance halls (Class D2) to change their use for a single period of up two years (from 30 May 2013) to other A1, A2, A3 and B1 uses without the need for planning permission. This allows greater freedom for potential occupiers to take temporary occupation of some premises that were not previously in a similar use.
The pop up shop phenomenon is not solely restricted to new businesses; some well established names have used the initiative to secure locations to take advantage of local events, festivals or even for the duration of a ski season! Pop up premises have, so far, included occupation of tents at the Glastonbury Music Festival and occupation of recycled shipping storage containers.
Whilst the occupation of premises may be viewed as temporary, both property owners and potential occupiers are advised to take legal advice of the necessary agreements that should be signed prior to occupation.