KNOWLEDGE

Retail property and EVs

Morton Fraser_Jonathan Seddon
Author
Jonathan Seddon
Partner
PUBLISHED:
04 November 2021
Audience:
Real Estate
category:
Article

I worked in a petrol filling station in the late 80s and early 90s which made more money from retail than it did on fuel. Most household items were a couple of pence more expensive in the filling station as compared to the local shop, but if you were there anyway filling the car up you could get two chores done at the same time.

That was over 20 years ago. Since then petrol stations have capitalised on the potential for selling retail to a customer base who are there anyway. Not only is the array of items that can be purchased at a filling station vast these days, but there are numerous tie ups with the likes of Waitrose and M&S to encourage drivers to effectively do their daily shop. Costa seems to be available at every filling station in the UK - the least a driver deserves after refuelling is a coffee as a reward.

Here's the interesting part though. Putting a tank of petrol in a car takes about 5 minutes. You can be in and out of the shop in a further 5 minutes even if you've grabbed a pint of milk and a loaf of bread on the way through. And a coffee of course.

Re-charging an electric vehicle (EV) takes at least 20 minutes on a rapid charge, and takes a few hours on a standard charge. Imagine the potential spend for that captive audience for that length of time. And of course, that's exactly what owners of retail parks and other retail space have been imagining, and acting upon, for some time now. As so often with global trends, this concept first took off in the US. Mall owners set up EV charging bays aimed at drivers who either didn’t have a charging point at their home, or more likely were passing through on a longer trip and needed to re-charge. Retail sales at these malls took off as drivers shopped while they waited, and this trend has moved into overdrive under the Biden administration.

Meanwhile across the pond, the UK has committed to net zero carbon emissions by 2050. Transport is the largest emitting sector in the UK economy, accounting for about 27% of the total UK greenhouse gas emissions. Within that, cars are responsible for 55% of transport emissions.

According to the RAC, as at April this year there are about 239,000 zero-emission battery EVs on the roads in the UK, with a further 259,000 plug-in hybrids. In 2020, hybrid and plug-in EVs accounted for over 10% of car registrations in the UK.

The Committee for Climate Change says that all new vehicles should be electric by 2035, so as we all know now this is only going in one direction. As soon as EVs reach anywhere near price parity with fuel cars the floodgates will burst.

Whilst the trend of putting EV charging bays in retail parks may have started in the US, it has certainly not been lost on retail owners and operators in the UK. In March this year the owners of the closest retail park to my home, Straiton in Edinburgh, introduced 4 new charging bays, including one rapid charger which can charge an EV to 80% in 35 minutes. That's 35 minutes of wandering around Next or Halfords.

The three standard bays that Straiton's owners, Peel L&P, have installed take between 4 and 6 hours to charge. So that's enough time to try out the soft furnishings in Bensons for Beds and Sofology before discussing them all in detail over lunch at Nando's.

In short, EV charging bays are a hook to bring shoppers in, and an effective one at that. Those who don’t have private driveways where they can install their own EV charger currently have to rely on public places that do have them - like retail parks, workplace car parks and community hubs as alternative options.

And given the boost EV charging brings to retail, it will be interesting to see if charge points start to play a part on our high streets. Once the floodgates do burst on EVs our local authorities are going to have their work cut out to install on street charging points in residential areas, but high streets could be an additional avenue for councils to explore in the more immediate future.

Whereas lockdown caused us all to shop online, could the continued increase in EVs be the saviour of the retail property sector? And was the move from retail to online a phase forced upon us by the pandemic rather than an accelerated trend? That second question is for another day……

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