East Mids retail rents take a hit

 

Retail rents across the East Midlands have fallen by 5.7 per cent in the last year according to Colliers International’s annual Midsummer Retail Report.

Of the 27 regional shopping centres and high streets surveyed, not one saw a rise in rents.

Thirteen saw a slide in rents, with Spalding seeing the biggest drop, at 20 per cent. Rent in the Lincolnshire market town is now £40 per sq ft.

Fourteen centres saw no change in shopping space rents. Overall, the average rent in the region is £73.1 per sq ft, compared to the national average of £109.80.

Top rents are being achieved in major city and town centres. Nottingham tops the table, fetching £190 per sq ft.

Leicester wins silver medal, at £185 per sq ft, with Derby in bronze position at £140.

All three, however, saw rents fall over the last year, by 9.5 per cent, 7.5 per cent and 6.7 per cent respectively.

The cheapest rents in the region can be found in Alfreton. Shop space can be had in the former Derbyshire coal mining town for just £30 per sq ft.

The overall regional decline of 5.7 per cent compares with a national average of 1.2 per cent. Neighbouring West Midlands had a comparatively softer landing, with a fall of 3.4 per cent.

According to Nick Round, national head of shopping centre leasing at Colliers International, the research demonstrates that the gulf between the performance of major city and town centres and traditional suburban high streets, continues to widen.

He said: “The retail sector as a whole is in challenging times. Retailers are under attack from reducing disposable incomes and competition from new channels, such as the internet and TV.

“For traditional high streets in secondary locations, competition from city and town centres and out-of-town shopping malls can be added to this. Shoppers now expect a complete leisure experience, incorporating a wide variety of entertainment, food, drink and retail brands. City centres and dedicated malls are in a better position to offer this. Traditional high streets, such as Spalding and Alfreton, just can’t compete – they lack the variety of stores, are often difficult to access and expensive to park in and simply just aren’t exciting enough.”

As well as being a black hole for shoppers, traditional high streets are also being shunned by investors.

Nick Round said: “Major regional centres, accessible out-of-town locations and convenience shopping venues are casting a long shadow over traditional high streets. Investors can’t see a return so won’t plough any money in. Despite the hype around Mary Portas’ high street review, some areas of secondary towns are likely to fall out of retail use forever.

A number of high profile failures, such as Clintons, Game and Focus DIY, and consolidation programmes, such as Currys/PC World, mean that vacancy rates across the country have risen and are now at 3.9 per cent, just above the long term average.

This has helped to suppress the development pipeline. In town, no new shopping centres are due to open in 2012. Established shopping destinations, however, are likely to extend their offer.

Retail space rents: East Midlands

Centre

2011

per sq ft

2012

per sq ft

%Change

Alfreton

35

30

-14.3

Ashby-de-la-Zouch

40

40

0.0

Beeston

50

50

0.0

Boston

70

70

0.0

Buxton

45

45

0.0

Chesterfield

100

100

0.0

Corby

65

65

0.0

Derby

150

140

-6.7

Grantham

55

50

-9.1

Hinckley

45

45

0.0

Kettering

75

70

-6.7

Leicester

200

185

-7.5

Lincoln

120

110

-8.3

Loughborough

70

65

-7.1

Mansfield

90

75

-16.7

Market Harborough

45

45

0.0

Melton Mowbray

50

45

-10.0

Newark-on-Trent

70

60

-14.3

Northampton

100

100

0.0

Nottingham

210

190

-9.5

Retford

45

45

0.0

Skegness

50

50

0.0

Spalding

50

40

-20.0

Stamford

80

80

0.0

Wellingborough

65

65

0.0

Weston Favell

65

65

0.0

Worksop

55

50

-9.1

 

EAST MIDLANDS average

77.6

73.1

-5.7

ALL GB average

111.1

109.8

-1.2

Colliers International: Midsummer Retail Report, June 2012

Retail space rents: Regional averages

Region

2011

2012

%Change

East

81.8

81.1

-0.9

East Midlands

77.6

73.1

-5.7

North East

75.8

70.8

-6.6

North West & Mersey

97.3

92.9

-4.5

Scotland

83.7

81.7

-2.4

South East

106.9

105.2

-1.6

South West

89.2

84.9

-4.8

Wales

68.1

62.4

-8.4

West Midlands

93.9

90.8

-3.4

Yorks & Humb

129.0

126.7

-1.8

All GB

111.1

109.8

-1.2


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