North West sees biggest decline in retail rents

THE North West has seen the UK’s worst decline in retail rents in the past year, and no area outside London has registered growth.

That’s according to the GB Retail Paper research from property agent Colliers International which found that 25 out of 39 North West town centres, or 64%, suffered lower retail rents.
 
The largest falls were in Stockport, Chorley, Oldham and Workington, where prime retail rental levels dropped by 26%, 18%, 13% and 20% respectively.
 
Only Blackpool and Chester recorded growth in retail rents in North West town centres with increases of 11% and 3% while in 12 centres rents stayed the same. Average prime retail rent in the region fell by 5.5% to £88 per sq ft over the past year 12 following a 4.5% decline in 2012.

The findings will support those calling for business rate reforms. The Government has postponed a revaluation of business rates from 2015 to 2017 which means retailers and other businesses continue to pay rates based on pre-recession rents. Rates have become the largest business cost for many businesses.

Matthew Thompson, senior retail research analyst at Colliers International, said: “Although each town featured on our worst performing list will have its own location specific set of issues regarding falling rents and growing vacancy rates, it is clear that a few common themes run through the retail geographies of each area.

“The growth of out-of-town and large scale regional developments over recent years is meeting the demands of both the consumer and the retailer regarding an improved shopping experience, which encompasses parking, mix of retail and leisure, unit size and product range.
 
“Furthermore, the significant growth in online shopping is having a profound effect on retailer property strategy, with many of the towns in our worst performing list losing high street stores in favour of stronger in-town and out of town centres.”