YORK recorded the largest increase in rents of any retail location outside of London as figures across Yorkshire rose for the first time in 10 years, according to a new report.
The city of York saw rents rise by 19 per cent year on year, bolstering Yorkshire and Humber’s average rental growth by 1.9 per cent and resulting in real rental growth for the region for the first time since 2006 of 0.6 per cent.
Colliers International’s annual Midsummer Retail Report 2016, which is launched in Leeds today, found that of the 21 centres analysed across the region, five recorded increasing rents, three saw a decline and 13 remained stable.
The region’s largest cities of Leeds and Sheffield both recorded increases in so-called ‘Zone A’ rents with four per cent and six per cent, respectively.
Colliers retail director Tom Cullen said: “Although only a nominal increase of 0.6 per cent, it is encouraging to see real rental growth for retail locations in the Yorkshire & Humber region for the first time since 2006.
“Leeds and Sheffield continue to perform well as retail destinations and this is attracting additional investment in the form of a host of new development in the pipeline for both cities over the next 12 months.
“York’s significant rental growth is due to the fact that the city has a very tight historical centre with a strong affluent pool of young professionals, student population and thriving tourist scene, which all contribute to driving a strong demand for retail and lack of supply.”
Other retail centres which saw impressive growth since 2015 were Whitby and Scarborough, which reported rental increases of 13 per cent and seven per cent, respectively, albeit from relatively low bases.
At the other end of the scale, Colliers’ report, which analyses vacancy rates in 15 centres nationally, found that Rotherham had the lowest rental values in the region. Over a quarter of its shops are vacant, up from 13.3 per cent in April 2015.
Mr Cullen added: “This increase is almost exclusively led by increasing numbers of vacant units on secondary pitches, where 28.3 per cent of units are now vacant in secondary parts of Rotherham centre.
“Vacancies are generally seen in the smaller unit sizes, of less than 1,300 sq ft on average, indicating that some consolidation of smaller units is necessary to bring accommodation in line with modern consumer expectations.”
Beverley and Keighley also saw a decline.
Meanwhile, there is over 1.2 million sq ft of shopping centre space planned for Leeds and Sheffield over the next five years including Victoria Gate in Leeds, the second phase at The Moor in Sheffield, a small extension planned for the White Rose Shopping Centre in Leeds and additional space at Monks Cross Shopping Park in York, through the creation of mezzanines and reconfiguration of units.
There is also a further 600,000 sq ft of retail warehousing planned for Leeds and Sheffield over the next three years, including new schemes at Thorpe Park and Armley Retail Park in Leeds, as well as the new Ikea Sheffield.