Experience led retail and key property considerations
In 2026, the UK retail and leisure landscape continues to be increasingly shaped by a shift from transactional shopping to experience driven engagement, with consumers seeking emotional connection, community and memorable interactions rather than purely material purchases.
While this isn’t new, we’re seeing retailers investing more heavily in experiential formats as footfall and competitive pressures intensify, particularly across prime high streets and high performing retail parks.
Immersive, tech‑led experiences
Strategically, operators are seeking to design immersive experiences that attract and retain customers, ranging from community centred events to sensory spaces and interactive product trials. These are seen as a differentiator while experiences rooted in cultural relevance strengthen authenticity and loyalty, especially in a low trust consumer era. Combining human service with technologies (such as AI, virtual try on tools and personalised itineraries) enables frictionless, differentiated journeys that increase operational efficiency and conversion. In parallel, retailers are seeking to adapt to margin pressures driven by continued cost of living challenges. Consumers still seek premium experiences but in more selective, intentional ways.
Rise of experiential retail
Experiential destinations, particularly shopping centres and retail parks that integrate shopping and leisure, continue to outperform more traditional environments.
Lease terms are also reflective of the changing market and evolving customer demand - retailers are seeking more cost control by using turnover rents or rents which are inclusive of service charge and insurance rent, while wider user clauses mean that they can operate more flexibly, introducing complementary users where the space allows to draw and keep customers in store.
To help them thrive, retail and leisure operators are looking to:
- Rewire customer journeys to make experiential touchpoints central, not peripheral, building spaces and environments that foster connection and community
- Use data and AI responsibly to personalise experiences, ensuring transparency and ethical practices while enhancing relevance
- Leverage partnerships across leisure and retail to build multi purpose destinations that meet evolving consumer expectations
- Plan profitability around regulatory changes, particularly business rates, to optimise investment and site selection
- Align licensing and operational strategies with the government’s modernised, pro innovation framework to expand experiential formats safely and sustainably
- Seek lease terms which allow operational flexibility to try new trading formats
2026 business rates reform
2026 business rates reform is a major factor for operators planning experiential formats. A new five multiplier system introduces lower rates for small hospitality and leisure properties, offering meaningful relief, while larger venues face higher multipliers and rising operational costs. Transitional support will soften increases following revaluation, prompting operators to reassess property portfolios, evaluate the ROI of experience oriented investment, and consider relocating or testing concepts in more rate efficient spaces. The updated national licensing framework also emphasises flexibility and alignment with broader regeneration goals, enabling businesses to introduce new experiential offerings while maintaining safety, community benefit and compliance.
Renters’ Rights Act
The Renters’ Rights Act is the biggest reform of the private rented sector in England in decades. It will affect clients who take leases of buildings that include residential elements let to private third parties—most commonly where a retailer or leisure operator occupies a high street unit such as a shop or café on the ground floor with flats above.
The Act gives tenants greater rights around eviction and rent increases, and it will impact asset management for clients who find themselves, often inadvertently, acting as residential landlords because they occupy the commercial part of the building.
Green lease clauses
Green lease clauses are still a tricky area notwithstanding that these have formed part of the legal landscape for a number of years. The sector is still waiting for the Government response to the consultation on the EPC regime which closed in early 2025 and for the consultation (still awaited) on MEES for commercial property which was also expected last year. Funders and investors are increasingly imposing ESG requirements which are then reflected in leases and agreements for works. Generally, we see that parties are starting to feel their way through these and have a better understanding of both a landlord’s and a tenant’s expectations – however, agreeing workable and balanced provisions often causes a delay to concluding deals.
Upwards only rent review clauses
There is no ban in force yet but occupiers are understandably interested in the UK Government’s stated intention to legislate to ban upwards only rent review clauses in new commercial leases. (The proposal sits within the English Devolution and Community Empowerment Bill, introduced to Parliament in July 2025 with implementation not expected before 2027). The aim is to allow rents to move both up and down at review, reflecting market conditions and with the policy aims of supporting high street and small business occupiers. This is expected to affect renewal leases and new leases granted after the implementation date. This could significantly impact on the retail and leisure property markets for investors, developers and funders (who have been used to an upwards only income stream) as well as occupiers. It may lead to landlords rushing to complete leases (with potentially longer terms) prior to the implementation date so that they can secure an upwards only rent review structure.
For more information on the legal developments, please visit the Real Estate section of our Horizon Scanner here. It includes further information on 2026 business rates reform and The Renters’ Rights Act 2025 as mentioned above.
Key contacts
Paul Tomkins
Partner & Head of Real Estate Litigation
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