Even a shopping centre can have emotional resonance - and that value is hard to quantify

At Bluewater, my company’s £800m flagship retail centre, there is a memorial garden where people (unofficially) scatter their loved ones’ ashes and leave inscribed memorial plaques. One reason they do this is something you wouldn’t immediately assume about a large out-of-town shopping centre - Bluewater is a very beautiful place.

Built in an old chalk quarry in the Kent countryside, the centre itself with its 300 retailers and 10,000 car parking spaces is surrounded by parkland with over 5,000 trees, seven lakes, 4km of cycleways and walking paths and the country’s longest zipwire. It’s a place that has worked itself into the heart of people’s lives and is considered by many to be the perfect place to leave a memorial to a loved one.

As a developer thinking about the future of a place like Bluewater, where commercial success is measured by a range of standard metrics including visitor numbers, total sales, occupancy levels and net rental income, it’s easy to forget that any vision we might write for its future needs to have a large dose of emotion in it to take advantage of the intangible, but hugely valuable, connection its 18 million regular annual visitors feel for the place. Talking to regular visitors it’s not unusual to hear stories about Bluewater as the location of a first kiss, a first date and a marriage proposal. The problem is that it’s hard to measure the ROI on investment in that kind of emotional pull.

Our industry is in a moment of great change. As developers and property investors we are adapting fast to the way our end users want to live their lives. In our post-Covid world at a time of great economic and political uncertainty, we are learning that the traditional model of property investment isn’t working as well as it used to. No longer can we just be good at putting up buildings, making sure they stay lit, warm and dry and collect the rents our tenants pay us.

If we don’t understand the lives of the people who use our places – those who live in the flats and houses we build, who come to work in the office buildings we manage and who shop, eat and play in our leisure and retail centres – then we will fail. We have to show our commercial, retail and leisure tenants that we understand their businesses, intimately understand the relationships they have with their customers and provide them with just the right environments in which their businesses can thrive.

Who knew that could happen at a shopping centre in Kent?

In our shopping centres it’s simply not possible to leave an understanding of the end customer to our retail brand partners – those with whom they directly transact. If we don’t offer them ever more compelling reasons to visit our centres, we will lose them. And we aren’t just competing with other retail outlets for their time and money – we’re competing with holidays, leisure activities elsewhere and time at home with shopping delivered by Amazon.

And so back to the Memorial Garden at Bluewater. What more could we want as custodians of a place than that someone feels so passionately connected to it that they will leave a memorial to their loved one there? If we didn’t already have such a place at Bluewater, we’d want to build it. And here is the lesson.

When we’re writing investment strategies for our assets, it’s instinctive that every page in the pitch deck has some statistical evidence to back up our investment case. What’s the ROI on the upgrade to the car parking or the refresh of the food court in order to attract more valuable tenants? Want to build a new wing? Super easy to build an appraisal that shows a good IRR and an appropriate uplift in capital value. But how to value the emotional connection that the Memorial Garden delivers? That’s hard.

And so, in all the best pitch decks, the last slides will always be the difficult ones to land – the ones that propose the investment to deliver an emotional return - the ones that ask the viewer to take a leap of faith. How can we justify the cost of maintaining the Memorial Garden at Bluewater when it doesn’t deliver any financial return? The answer is that we just know it works. What’s more, it delivers the kind of return that sometimes money simply can’t buy - real love for a place. Who knew that could happen at a shopping centre in Kent?