Shop rental market second only to capital

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SHOP rents in Yorkshire are holding up well despite the uncertainties caused by the crisis in the eurozone, according to a new report.

The study suggests that Yorkshire and the Humber has maintained a “steady performance” as the best performing region outside London.`

It also reveals that the central London retail market is still booming, while some regional centres are struggling to cope with the downturn.

According to property adviser Colliers International’s Midsummer Retail Report, average retail rents in Yorkshire and the Humber declined by 1.8 per cent in the year to June 2012.

The fall was only marginally steeper than the UK average of 1.2 per cent.

The drop in high street and shopping centre rents comes as retailers continue to feel pressure from the squeeze in consumer spending.

The report analyses 418 centres across the UK to produce a comprehensive study of retail rents as well as shop vacancies, new development, population growth and employment prospects.

Towns and cities experiencing a fall in rents included Hull (down 13 per cent), Sheffield (down 10 per cent), Huddersfield (down 5.6 per cent) and York (down 5.3 per cent).

However, the report states that these are the only places in Yorkshire to show a steep decline.

Whilst the report showed no increases in rents across Yorkshire and the Humber, 17 of the 21 locations assessed were stable. Key regional cities and malls can still command higher than average rents, such as Leeds, at £270 per sq ft and Meadowhall at £400 per sq. ft. Manchester maintained rents at £250 per sq. ft, while the figure for Liverpool was £265.

Greg Styles, head of retail development at Colliers International and head of the Leeds office, said: “Retail rents in Yorkshire and the Humber have shown reasonable stability when compared to other regions across Great Britain.

“When the new Trinity shopping centre opens in Leeds next spring it will be interesting to gauge the impact on rents, but the city needs the scheme to keep pace with other major regional centres and we are predicting that rents here will remain strong.”

Last month, Robert Noel, the chief executive of Land Securities, confirmed that the company’s Trinity Leeds scheme was on course to create 3,000 jobs when it opens in March next year. He also said that further significant investment was planned at Land Securities’ White Rose Centre in south Leeds. A number of major retailers have already committed to taking space in Trinity Leeds, including M&S and Primark.

In June, Mr Noel said Leeds was “a hugely important centre” and will rank above Manchester as a shopping destination when Trinity Leeds is completed.

According to the Colliers International report, towns that had experienced a rapid decline have now achieved stability.

For example, Barnsley has maintained rents at £100 per sq ft, while the figure for Grimsby is £120 per sq ft.

Mr Styles added: “We believe that rental adjustments have now taken place in many sub-regional centres and rents in those towns should now remain more stable provided economic conditions do not deteriorate further.”

Nationally, the retail rental figures reveal a big difference in performance between London and the rest of the UK.

Rents increased in London by an average of 6.7 per cent, with central London increasing by nine per cent. All other regions showed falls in rentals, the most significant being Scotland at -7.3 per cent. Of the 418 locations, 68 (16.3 per cent) saw rents rise while 140 locations (33.5 per cent) saw rents fall.

A spokesman for Colliers International said yesterday: “This divided market whereby London, sees rents rising but the remainder of the country, including south east England, sees rents declining, is becoming more exaggerated.”

For a copy of the report visit www.colliers.com

greg.wright@ypn.co.uk