West Mids retail rents take a hit

Retail rents across the West Midlands have fallen by 3.4 per cent in the last year according to Colliers International’s annual Midsummer Retail Report.

Of the 33 regional shopping centres and high streets surveyed, just one – Lichfield – saw rents rise. The

cathedral city saw a 6.7 per cent increase in rents over the last year, with average rents now £80 per sq ft.

The biggest faller was Rugby, where rents declined by a staggering 15.4 per cent. Rents are now £55 per sq ft in the market town. High vacancy rates at the Swan Centre, which is anchored by ASDA, are a contributory factor.

In all, 17 shopping areas saw a decrease in rents, with 15 remaining stable. Overall, the average rent in the region is £90.8 per sq ft, compared to the national average of £109.80.

The top rents are being achieved in major city centres and out-of-town malls. Birmingham city centre tops the rent table in the region, at £275 per sq ft.

Merry Hill wins silver medal, at £240 per sq ft, with Solihull in bronze position at £195 per sq ft.

The Black Country towns of Dudley and Stourbridge are achieving the lowest average rentals, at £30 per sq ft for their shopping space. Stourbridge has at least maintained its rental levels from last year, and rises are anticipated next year as a result of void space at the Ryemarket shopping centre reducing over the last couple of years and rents of £40 per sq ft being achieved there.

Dudley has recorded a 14.3 per cent decline, second only to Rugby’s, and continues to suffer from the “Merry Hill effect”.

The overall regional decline of 3.4 per cent compares with a national average of 1.2 per cent. Neighbouring East Midlands saw a fall of 5.7 per cent.

According to Nick Round, the Birmingham-based national head of shopping centre leasing at Colliers International, the research demonstrates that the gulf between the performance of major city centres and out-of-town malls, and traditional 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 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. The addition of a John Lewis store in Birmingham is a case in point.

Retail space rents: West Midlands

Centre

2011

per sq ft

2012

per sq ft

%Change

Birmingham

275

275

0.0

Bromsgrove

45

40

-11.1

Burton-upon-Trent

100

95

-5.0

Cannock

55

50

-9.1

Coventry

155

150

-3.2

Droitwich

40

40

0.0

Dudley

35

30

-14.3

Evesham

50

45

-10.0

Halesowen

50

50

0.0

Hereford

100

95

-5.0

Kidderminster

60

55

-8.3

Kings Heath

60

60

0.0

Leamington Spa

120

120

0.0

Lichfield

75

80

6.7

Merry Hill

250

240

-4.0

Newcastle-under-Lyme

55

50

-9.1

Northfield (Birmingham)

45

45

0.0

Nuneaton

85

75

-11.8

Redditch

90

90

0.0

Rugby

65

55

-15.4

Shirley

45

45

0.0

Shrewsbury

110

110

0.0

Solihull

195

195

0.0

Stafford

70

65

-7.1

Stourbridge

30

30

0.0

Stratford-upon-Avon

140

130

-7.1

Sutton Coldfield

115

105

-8.7

Tamworth

75

70

-6.7

Telford

135

135

0.0

Walsall

85

80

-5.9

West Bromwich

50

50

0.0

Wolverhampton

95

95

0.0

Worcester

145

145

0.0

 

WEST MIDLANDS average

93.9

90.8

-3.4

ALL GB average

111.1

109.8

-1.2

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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