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North West town centres suffer biggest fall in prime town cente retail rents, say Colliers International

The North West of England is the worst performing region in the UK for town centre prime retail rents, according to the GB Retail Paper from real estate advisors Colliers International.

In the past year, the research identified that 25 out of 39 town centres in the North West suffered lower retail rents, representing 64 per cent of such centres in the region.

Among those reporting a decline in the research by Colliers International, the largest falls were in Stockport, Chorley, Oldham and Workington, where prime retail rental levels dropped by 26 per cent, 18 per cent, 13 per cent and 20 per cent respectively.

Only Blackpool and Chester recorded growth in retail rents in North West town centres with increases of 11 per cent and 3 per cent respectively while 12 centres saw no growth but remained static compared to the previous 12 months.

Average prime retail rent in the region fell by 5.5 per cent to £88 per sq ft over the past year 12 following a 4.5 per cent decline in 2012.

While the North West performed least well, no region outside of London enjoyed positive rental growth.

Matthew Thompson, senior retail research analyst at Colliers International, said while Stockport emerged with the largest decline in prime retail rents, it was just one of several towns suffering from rival and much larger and diverse retail offerings in the major nearby cities of Manchester and Liverpool and the Trafford Centre.

And completion of phase two of the Stockport Exchange development to provide a 120-bed hotel, 50,000 sq ft of office space and public realm could only help to revitalise the town centre.

He said: “Although each town featured on our worst performing list will have its own location specific set of issues regarding falling rents and growing vacancy rates, it is clear that a few common themes run through the retail geographies of each area.

“The growth of out of town and large scale regional developments over recent years is meeting the demands of both the consumer and the retailer regarding an improved shopping experience, which encompasses parking, mix of retail and leisure, unit size and product range.

“Furthermore, the significant growth in online shopping is having a profound effect on retailer property strategy, with many of the towns in our worst performing list losing high street stores in favour of stronger in-town and out of town centres.”

Mr Thompson added that many towns in the UK still had an oversupply of retail space and with the online market not expected to mature until the 2020s there will be continuing pressure on UK towns that fail to reposition themselves.

“As retailers and consumers become increasingly selective, the physical market will continue to polarise in favour of prime locations within dominant centres which can provide the full shopping experience and local centres which favour top up shopping and service everyday needs,” he explained.

Nick Turk, head of UK retail at Colliers International, said: “The UK economy is gathering pace and rising consumer confidence coupled with the summer heat wave allowed retailers to capitalise on strong footfall.

“A key driving force behind a sustained economic recovery is consumer confidence, which has improved throughout 2013 and this is reflected in increasing demand for vacant shop units – especially in the best performing towns which are either affluent or enjoyable to shop in.

“If the high street is interesting, with a good range of national and independent retailers, it will attract shoppers away from formulaic retail parks.

“Retail continues to undergo significant structural change in the wake of the economic climate of the last five years and as online retail continues to grow its share of overall retail spend. Those retailers that make “clicks” work for their “bricks” and have a fully integrated property and on-line offer, will create loyalty and drive profits.

“However retailer casualties will continue to come from those retailers who do not address the pull of the internet and do not provide something extra that the internet cannot provide – an experience and great service - good prices are taken for granted.”

This was posted in Bdaily's Members' News section by Justin Strong .