Yorkshire & Humberside Retail Reaches New Frontiers
Latest Trends in Retail & Leisure revealed by Colliers’ Midsummer Retail Report
The theme for Colliers International’s Midsummer Retail Report launched this week was New Frontiers and that is certainly the case for the retail and leisure scene in Yorkshire & Humberside.
According to Colliers the picture for Yorkshire and Humberside’s retail sector; after five years of decline, is one of improvement, as retail rents edged up in 2015. The region witnessed growth of 0.4 per cent, the highest rate outside London and outperformed the national average (excluding London) of -0.3 per cent.
Tom Cullen, Colliers International Director, Retail Agency, explained: “Yorkshire and Humberside’s 2015 retail rental growth figures indicate a positive outlook after the prolonged downtown. The region’s 2015 rental growth surpassed the national average; however, the average rent remains 19 per cent below pre-recession levels, of £155 in 2008, recording a regional average of £125 per sq ft in 2015.”
The report revealed that some of the UK’s biggest shopping centres are being built in Yorkshire, noting the new Westfield will open in Bradford on 5 November, which is tipped to generate a huge change in the city with key retail brands secured, such as Marks and Spencer, River Island, JD Sports, Top Shop and Sainsbury’s. Hammersons’ Victoria Gate in Leeds is progressing rapidly with retailers including John Lewis, Anthropologie and the White Company already secured.
Cullen added: “A lot has happened in the Yorkshire retail market over the last 12 months. Requirements and enquiries from retailers have increased significantly; not only from small and new businesses, but UK household names are targeting opportunities across our region.”
Other Highlights from the report:
Bars & Restaurants
Rents for bars and restaurants are ahead of the shops they sit alongside with spending in restaurants up 17 per cent in Yorkshire during the first quarter of 2015 according to Colliers. Continuing consumer confidence and the correction in rents across high streets and shopping centres in the north has resulted in restaurant chains, old and new, embarking on an expansion trail.
Cullen said: “It has been well documented that food and drink offers in shopping centres increases dwell time, and the knock on effect is this creates a clustering effect which works well for both landlords and retailers. And we’re seeing this trend is now expanding on to the high street.
“There are a number of examples in Leeds alone. Byron Burger on Lands Lane, Bills on Albion Place adjacent Marks and Spencer, Five Guys on Duncan Street and, close by our own client Veeno, an affordable Italian Wine Bar / Eatery, for whom we have just acquired a unit on Castle Street Liverpool.”
On the supermarket front, Colliers notes Sainsbury’s is continuing to acquire circa 100 stores per annum, particularly on the periphery of high streets such as Albion Street in Leeds. However, Tesco has completely stopped acquiring.
Cullen explained: “Supermarket competition is not so positive. Tesco has stopped expanding and even where they have signed leases and in some cases new store shells built in place they are not necessarily fitting out. Morrisons has pulled back from convenience stores, too. In fact the major competition in the market now seems to be between Sainsbury’s and the Cooperative, who are bidding strongly on locations.
“This ability for convenience store operators to take edge of prime units in city centres is down to the rebasing of rents on many of these pitches. This same trend has also now opened up the high street to the leisure occupiers.”
The Midsummer Retail Report states that the health and fitness sector in Yorkshire, particularly budget gyms, takes the next call on household income after the food and beverage sector. The north has been a key region for the budget gym industry with overall growth up 203% in the last five years.
Colliers cite the fast approaching 2017 rates revaluation is anticipated to unlock rental growth as the sector hopes to reap the benefits of reduced operating costs. “While rents have grown only marginally in the two years of recovery, there is real hope that in the next two years there will be a return to a more balanced relationship between rent and rates and the benefits that this will bring across the retail sector,” said Cullen.
“There remain many towns across Yorkshire where the vacancy rates are going to continue to take years to return to anything approaching pre-2008 levels. It is still too often the case that adjacent shops on a high street can produce very different outcomes for the landlord due to physical factors such as width, shape or obsolete upper floors but as all of the factors that govern the performance of our shopping destinations combine to create an atmosphere that encourages growth – then the outlook will continue to look more positive.”