Pictured: Robert Alston
Birmingham's High Street remains the sixth most expensive
shopping street outside of London, according to a new survey of the
UK retail market by Cushman & Wakefield.
This is despite High Street seeing a 9.1 per cent drop in rental
values during the last year, to £250 per sq ft.
Of the top ten UK shopping streets ranked in the global real
estate adviser's Main Streets Across the World report, half
recorded rental increases and three saw falls in rental values over
the year to June. This compares with four locations registering
rises in rent and five recording rental declines last year.
Robert Alston, Partner - Midlands & South West Agency in
Cushman & Wakefield's Birmingham office, said, "Whilst demand
for prime units in Birmingham city centre remains reasonably strong
the former prime locations such as High Street, New Street and
Corporation Street have seen significant reductions in rentals to
achieve lettings. Bullring is now unquestionably the main fashion
pitch in Birmingham city centre and the recent openings of Forever
21 and Hollister has reinforced the centre as the location where
fashion retailers need to be represented. Lettings have been
achieved on High Street to the likes of Currys.digital, Barclays
Bank and Orange but rental values have had to fall to achieve these
and incentives are still reasonably attractive."
The Main Streets Across the World report provides a barometer of
the global retail market, tracking rents in the top 278 shopping
locations across 63 countries. It includes a ranking, produced
using the most expensive location in each of the
countries.
Despite a rental increase of 4.3%, London's New Bond Street
dropped two rankings, from fourth to sixth. The UK street falls
behind Avenue des Champs-Elysées in Paris which is now the
most expensive retail location in Europe having registered a rental
uplift of 5.3%, compared with a decrease of 9.5% last year.
Peter Mace, Head of Central London Retail, said, "Whilst New
Bond Street has dropped in the global ranking, it remains one of
the most sought after locations in the world for luxury brands,
with demand far outstripping the supply of available
accommodation. The last open market letting to take place in the
prime section of the street was in December 2009 when 169 New Bond
Street was let to Piaget on a new 15 year lease at a record rent.
There is no question that rental levels have increased over
the past twenty months but to date, a landlord has not been able to
secure vacant possession of a prime shop in order to create new
market evidence. I am sure it is only a matter of time before Bond
Street re-establishes itself close to the top of the rankings."
Growth across Europe (1.9%) was considerably restrained and -
with exception of the Middle-East and Africa (0%) - lagged behind
other regions. However, it bounced back from the profound decline
recorded last year (4.2%). Helsinki city centre showed the
strongest growth in Europe, with a rental increase of 33.3%.
John Strachan, Global Head of Retail, said, "The recovery in the
West is fragile but our offices have seen enhanced levels of
business, particularly in the major city centres which are on the
shopping lists of many international brands. Supply is short and
both rents and prices are being forced upwards. Retailers continue
to expand in the Middle-East and Japan, but China, India and to
some extent South America remain the focus of attention for many of
the world's leading retailers.''
Martin Mahmuti in the EMEA Research team: "The growth in global
retail markets is being supported by aggressive retailer expansion
in emerging markets and fierce competition for the best and most
high-profile global shopping locations amongst successful brands.
We do not foresee international activity slowing down; occupier
demand is expected to remain robust as retailers seek to enter new
prime markets abroad rather than looking for compromised locations
in their own back yards. This trend will be enhanced by
multi-channel retailing whereby tertiary locations will be almost
entirely replaced by on-line transactions over time."