North West sees ‘sharpest decline’ in retail rents
THE North West has suffered the greatest decline in retail rents in the UK in the past 12 months, according to data from Colliers International.
Average retail rents in the region declined by 5.5% in the past year and by 18% since the financial crisis in 2008 from an average of £108/sq ft to £88/sq ft.
The figures were prepared for Colliers’ Midsummer Retail Report which will be launched at The Hive in Manchester later today. It repeats calls for the Government to reverse its decision to postpone a revaluation of business rates from 2015 to 2017.
Colliers believes that the postponement – which means retailers and other businesses continue to pay rates based on pre-recession property values – could decimate what it had dubbed “terminal towns”.
Stockport is one of the worst hit, with a 25.9% drop in rents in the past year and down by 47% since 2008, from £190/sq ft to £100/sq ft. In Southport, retail rents dropped by 16.7% in the past year and by 41.2% from £85/sq ft to £50/sq ft since 2008.
Bootle and Birkenhead also witnessed a significant drop in average rent since 2008 with a 28.6% and 27.3% decline respectively. Liverpool saw a 17.2% fall over the same period.
Despite the rate of decline over the past year, the region performed relatively strongly when compared to the rest of Great Britain over the past five years. The worst hit areas are Wales and the North East where rents collapsed by 31%, followed by the West Midlands, down 25% and the whole of the Midlands and the South West, where rental levels slipped by 23% over the same period.
The only parts of the United Kingdom to record a rise in retail rents were central London and all of London, which recorded increases of 15% and 11% respectively since 2008. The weighted average for UK retail rents showed a fall of 15%.
Tom Cullen, director, retail at Colliers International said town were suffering due to reduced consumer spending, excessive competition and retail over-development. But he added that the Government had to shoulder much of the blame.
He said: “The decision of Government to delay the rates revaluation has left a massive burden on those high streets where decline has been the greatest and we call on the Government to introduce a revaluation now. We’re in a position where central London shops are effectively being subsidised by those in Wales and the North East of England.”
