New analysis of rental levels points to pockets of high street resilience beyond London
A new study of rental levels in retail locations across the UK has shown that while London is still achieving rental record rates, pockets of retail growth also exist in other parts of the country.
The research by global property firm Jones Lang LaSalle, which compares current rental levels across the top 200 UK retail locations with 2007/08 levels, shows that while levels are below the rental pre-crash peak for 61% of the locations, 39% are now setting new record headline rents.
The findings also highlight that larger locations such as Guildford, Oxford, Bath, Brighton, Colchester, Winchester, Edinburgh and York, have achieved rents exceeding pre-2008 peak levels.
With record rents in Central London being fuelled by continued global retailer demand for the right space in the right location, the capital is benefitting from its position as a global prime retail destination. The study found that prime rents in New Bond Street now exceed £1,200 per sq ft, an increase of 80% since 2007. Notable Bond Street deals which have driven this increase include Chanel’s £5 million lease for a flagship store and fashion retailer Belstaff, which took on a 20 year lease for £3 million per annum.
Never Miss a Retail Update!James Brown, head of retail consulting at Jones Lang LaSalle, said: “Commentators talk about the state of the market in the broadest terms, but it is clear from our analysis that there is resilience on the high street outside of London and that we need to monitor the market in a much more granular way. For instance, Trinity Leeds, the latest UK shopping centre had a 90% let at opening, demonstrating that demand exists for the right space in the right location. Opportunities still clearly exist and while some areas will continue to slide against the backdrop of challenging market conditions, locations with strong fundamentals and a broader appeal will continue to outperform.”
Tim Vallance, head of UK retail at Jones Lang LaSalle, added: “It is clear that across the UK rental growth in the short to medium term will be the exception rather than the rule. However, we shouldn’t forget there is current demand for over 25 million square feet of retail and leisure space in the UK and six years of incessant economic headwinds and exponential speed of change in shopping technology shouldn’t cloud the good growth stories about the high street that do exist.”
