Restaurant rents in London are spiralling upwards as international and domestic operators look to secure a foothold in the Capital.
- Average rents for prime London restaurants have risen by around 50-60% in the past five years
- There is a continued influx of new brands from Continental Europe, Russia, America, the Middle East and right across Asia encompassing every type of offer, from street food to fine dining
- Following the arrival of Nobu and Novikov, Berkeley Street has become new prime restaurant pitch in Mayfair
- Planning challenges are opening up new restaurant pitches in the West End
- The food and drink scene around the City’s eastern fringe is flourishing on the back of new development
According to Colliers International’s new Eat & Drink London research study
, average rents for prime London restaurants have risen by around 50-60% in the past five years and show no signs of cooling.
Colliers International’s Dan Taylor comments: “The internationalisation of eating and drinking in London has been extraordinary. We have seen a continued influx of new brands from Continental Europe, Russia, America, the Middle East and right across Asia encompassing every type of offer, from street food to fine dining”.
The study focuses on Mayfair where prime rents have risen by 67% in the past five years and the arrival of new entrants has been particularly intense. New restaurant hubs are developing as operators look for outlets.
Following the arrival of Nobu and Novikov, Berkeley Street has notably become an established Mayfair restaurant pitch for international restaurant concepts.
Colliers International’s Ross Kirton comments: “The challenge is now to find properties to match demand. In this context, a robust approach to planning is increasingly important in securing the right property.
“Westminster Council’s Unitary Development Plan (UDP) stipulates that new leisure uses over a certain size can only be granted in exceptional circumstances. This has historically been tough to challenge but there are now signs that there is more scope for securing a change of use.
“A recent planning appeal decision in Grosvenor Square made it clear that a large restaurant should be granted consent as the UDP policies were deemed to be outdated in the light of the new national guidance in the National Planning Policy Framework. Westminster was unable to identify specific harm arising from the proposal and so the ‘presumption in favour of sustainable development’ prevailed.”
The research also looks at other emerging London eating and drinking areas and reports on the burgeoning scene around Middlesex Street on the eastern edge of the Square Mile.
The study observes: “The location has developed a tremendous demographic cross-section. ‘City types’ mingle with a younger set drawn from nearby new student accommodation developments while the residential towers being built around Aldgate are bringing an influx of new affluent permanent residents.
“The area has been steadily attracting hip independent and multiple retailers with rental levels in the Middlesex Street area increasing by more than 50% in the past five years.
“This uplift has been achieved ahead of the 2018 arrival of the new Crossrail station at Whitechapel which will bring a further boost to the area.
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