Retail rents rise in Yorkshire for first time in 10 years
YORK recorded the largest increase in rents of any retail location outside of London as figures across Yorkshire increased for the first time in a decade.
According to Colliers International’s annual Midsummer Retail Report 2016, York saw rents rise by 19% year on year, bolstering Yorkshire and the Humber’s average rental growth by 1.9% and resulting in real rental growth for the region for the first time since 2006 of 0.6%.
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 Zone A rents with 4% and 6% respectively.
Tom Cullen of Colliers said: “Although only a nominal increase of 0.6%, 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% and 7%respectively, albeit from relatively low bases.
Colliers’ report analyses vacancy rates in 15 centres nationally. As the location with the lowest rental values in the region, Rotherham can be used as a barometer to consider the strength of the region as a whole. Colliers’ analysis shows that vacancy in Rotherham has deteriorated significantly in the last year, from 13.3% of units in April 2015 up to 26.1% in 2016.
Mr Cullen added: “This increase is almost exclusively led by increasing numbers of vacant units on secondary pitches, where 28.3% 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.”
Looking ahead, there is a large amount of shopping centre development planned for Yorkshire and the Humber over the next five years. More than 1.2 million sq ft of shopping centre space planned for Leeds and Sheffield alone.
Greg Styles, head of retail development for Colliers International, said: “This Autumn, Hammerson’s Victoria Gate development is expected to open, delivering over 350,000 sq ft of new space, including John Lewis’s first store in Leeds, alongside a host of restaurants and high end retail.
“Towards the back end of 2016 and into 2017, the second phase at The Moor in Sheffield should open which includes Primark and other retailers, The Light cinema and a number of restaurants. The strong development activity in the region’s major cities illustrates their continued importance as key shopping and leisure destinations in the Northern Powerhouse region.”
Elsewhere in the region, there is a small extension planned for the White Rose Shopping Centre in the Beeston area of Leeds and additional space is being created 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, which is expected to open in 2017/18.
