Central London Retail Rent Levels Reach Record Highs
June 2014 - Retail
Rent levels in Central London have reached record highs, according to a retail report by Knight Frank (KF).
For prime locations, such as Bond Street, rent has risen by 45% over the last five years – double the rate of “average” streets. KF’s report also shows an 18% growth across multiple secondary, or 'less prime,' locations, including Edgware Road and Queensway.
In sought after areas availability is very limited or even non-existent in some cases, with a survey on 18 key London locations showing average vacancy rates of between 3 and 4%.
Retailer demand far exceeds supply, so even when a property does become available, it’s snatched up very quickly leaving a long line of retailers, from both the UK and abroad, queuing up to start business in the capital.
Sloane Street, Edgware Road, South Molton and Victoria Street all have 0% availability, according to March 2014 unit numbers, with Tottenham Court Road sitting at the opposite end of the spectrum with around 10% availability. Prime locations, such as Bond (2%) and Oxford Street (4%), are positioned neutrally on the retail availability ladder.
Bond Street boasts the steepest rent charging, on average, approximately £1,200 per square foot. Oxford and Sloane Street sit a distant second at around £800 with Covent Garden following closely at approximately £770 per square foot.
Central London’s highest ever retail rents haven’t put people off, though. Several major investment transactions have recently taken place in the capital, including:
-Meyer Bergman purchasing 15/16 New Bond Street for £112m
-Norges Bank IM purchasing Quadrant 3, Regent Street for £97.5m
-Meyer Bergman purchasing 203-206 Piccadilly for £67.5m
-Prada purchasing 17-18 Bond Street for £88m
London has recently been crowned the world’s most visited tourist destination, captivating 16.8 million international visitors in 2013 alone, causing Darren Yates, partner and commercial researcher at Knight Frank, to dub the findings as unsurprising.
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