Central London's retail space recovery rate makes progress - Colliers report
More information has been released from a new Colliers report on central London retail and it shows that as far as space development is concerned, units housing global brands have been less affected by vacancies than others.
And while the void rate remains fairly high — partly driven by big changes such as the closure of department stores on Oxford Street — it’s moving in the right direction.
Last month we reported that retail space under redevelopment in the West End has risen to 101,000 sq ft, up considerably from the 31,000 sq ft recorded in December 2019 and 49% up on the five-year average.
Now Colliers has said that super prime portions of pitches look largely unaffected by vacancy issues. This is especially apparent on the Kings Road where the Duke of York Square was 100% occupied.
And despite the devastation of the pandemic, Regent Street actually shows a unit void rate decline from 10% in December 2019 to 8.4% in January 2022 which occurred after a 13% peak in July 2022.
But spaces reliant on local workforces have been harder hit and in reaction some retailers have reduced or changed opening days and hours to capture the highest rates of footfall.
Cheapside — the shopping street in the heart of the City of London that had become a major destination for the area’s workforce and visitors to heritage sites such as Saint Paul's Cathedral — was hit hard with the unit void rate rising from 3.4% in 2019 to 24.8% in 2022. However, “Colliers anticipates Cheapside and other City locations will recover rapidly as the movement of workforces back into the office continues apace”.
The footfall monitor produced by Springboard that tracks the return to offices has been showing much higher rates of returns in the City recently as the threat of the Omicron variant has all but receded.
As mentioned, Colliers said flagship stores housing global brands have been less impacted by the pandemic than others, and “super prime portions of pitches look largely unaffected". As a result, shopping ‘destinations’ such as in Bond Street, Regent Street, Kings Road and Long Acre fared pretty well.
And while the Kings Road overall has a unit void rate up marginally from 5.3% in 2020 to 6.6% in 2022, Kensington High Street saw its void rate falling from 14.5% in 2020 to 12.5% in 2022. Its floorspace vacancy rate of 8.7% is slightly lower than the West End average of 9.3%.
Given the local affluent demographic of the Kensington High Street area and the work from home environment, Colliers notes a resurgence in new lettings on the High Street as brands take advantage of rebased rents and expects footfall to surge in the area as local commuter and international travel increases.
Walter Boettcher, head of Research and Economics at Colliers, said: “While void rates remain generally high, movement looks to be in a positive direction. The surge in refurbishments across the pitches bodes well, given opportunities for new market entrants and the possibility of repositioning high streets generally. Despite an obvious ‘pandemic hit’ to London’s key retail destinations, punctuated by ubiquitous pop-up shops, few signs of a lasting upheaval are evident.”
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