Figures announced today mark the reverse of five years of rental decline in the East Midlands’ retail sector. Global property advisors, Colliers International’s annual Midsummer Retail Report revealed rental growth of 2.7 per cent in the East Midlands, one of only three UK regions to experience growth in 2014, and outperforming the national average for the second consecutive year.
Retail rents in the East Midlands are up 3.7 per cent on 2013 figures, to 2.7 per cent, overtaking the 2014 national rental growth average of 1.8 per cent, marking a shift after a prolonged downtown. Despite the East Midlands surpassing the national average, 2014 rents in the region remain 19 per cent below pre-recession levels of £92 in 2008 at £74.3 per sq ft.
The rise in the number of retail centres with stable rents to 67 per cent, up from 41 per cent in 2013, is the main driver behind the improving retail landscape in the East Midlands. The report revealed another contributor to the region’s retail landscape: 26 per cent of centres witnessed rising rents in 2014, compared with 15 per cent in 2013. The number of retail centres with decreasing retail rents dropped from 44 per cent in 2013 to seven per cent in 2014.
The Midsummer Retail Report identified Ashby-de-la-Zouch in Leicestershire as the top performing retail centre in the East Midlands, with an increase of 29 per cent, or £10 per sq ft, in retail rents from £35 per sq ft to £45 per sq ft. Market Harborough, also in Leicestershire, experienced positive rental growth in 2014 of 20 per cent, up from £50 per sq ft to £60 per sq ft.
The worst performing centres are Worksop in Nottinghamshire where retail rents dropped by 10 per cent, or 5 per sq ft, to £45 per sq ft between 2013 and 2014, and Skegness in Lincolnshire which suffered a decline of 4 per cent, or £2.5 per sq ft, to £60 per sq ft.
David Fox, Head of Retail Agency, Colliers International said: “The East Midlands has demonstrated two consecutive years of growth in the retail sector, this marks a significant turnaround that’s representative of the nation as a whole as the country emerges from an extended downturn. The region is ahead of the national average, demonstrating 2.7 per cent of rental growth in the past year, compared to the national figure of 1.8 per cent, this is indicative of our own market activity on behalf of retailer and landlord clients.”
The Midsummer Retail Report revealed that average prime retail rents throughout the UK rose by 1.8 per cent between 2013 and 2014 – the first such increase since 2008 – but remained 29 per cent below the levels of six years ago.