Page 32



Rental growth returns In its latest Midsummer Retail Report, Colliers International said that although average prime rents and the overall level of empty shops have improved slightly, the gap between the best and worst retailing locations has become more pronounced. Colliers’ head of UK retail, Mark Phillipson, explained: “UK prime retail rents are up 1.8 per cent year-on-year – the best increase since 2008 while prime shop vacancy is down 0.2 per cent – the first nationwide improvement since 2014. “But the proportion of the 420 locations we monitor which saw rents fall more than doubled, while the volume of shops that have been vacant for more than a year increased by 20 per cent. Both these measures had been previously improving during the past two years, and this reverse signals a step-change which is widening the gulf between the best and the rest.” Even in London – which has seen double digit rent increases in recent years – rents have only moved up by 3 per cent, and Colliers are predicting that they will remain flat for the next 12 months. The consultancy estimates that on Bond Street – one of the world’s most prime shopping locations – around 25 shop leases are being quietly marketed by the brands. Head of central London retail agency Paul Souber said: “London is still a phenomenally strong shopping environment but the market has cooled. The more positive news is that the capital is still creating new flourishing pitches. The shopping offer on Tottenham Court Road is being transformed and we’ve seen top rents on the street increase by 7.5 per cent – more than double the London average”. The strongest performing retail market was Scotland where top rents increased by 4.5 per cent year-on-year.

The polarisation of the sector is also impacting the attitudes of investors who are buying retail assets with many shifting their focus to the logistics sector to take advantage of the growth in online retail. The retail investment market is experiencing a shortage of stock at present but this may be about to change according to Colliers’ head of retail capital markets, James Watson. He said: “An increased supply of stock from forced sales in the secondary markets may not be that far away. This is not great news for those who are sitting on assets where the debt-value equation is heading in the wrong direction, but it will be positive for buyers who are sitting on a mountain of cash”.

Cambridge comes out on top Harper Dennis Hobbs’ 2017 Vitality Index – which looks at the quality of retail in a centre – finds Cambridge moving up six places to come out on top, with Westfield London in second and Knightsbridge remaining in third place. The Vitality Index ranks all retail centres in Britain by quantifying the ‘retail health’ of each centre through: a combination of the proportion of up-market shops; the proportion of value-led shops; the vacancy rate, and the proportion of ‘undesiraSHOPPING CENTRE JULY 2017

ble’ shops – such as pawnbrokers, money lenders, and bookmakers. In addition, these variables are also compared to the demographic composition of the centre’s catchment area and a greater score is given to areas whose retail mix is optimally adapted to the local community. London still dominates the national retail scene and 34 per cent of the top 50 most vital centres are located in the capital. However, quality retailers are increasingly gravitating towards a few very strong shopping centres and high

streets, and this concentration of quality retail within the city is at the expense of the typical London high street. Birmingham and Glasgow are the most improved centres near the top of the ranking, as both have benefited from new retail developments. Brent Cross has fallen out of the top 50 as a result of the preparation for works to modernise and expand the centre. It is likely that this drop will be temporary and the centre will increase its score upon completion within the next five years.

Shopping Centre July 2017  
Read more
Read more
Similar to
Popular now
Just for you