Fact: Retail has been hit hard by global economic conditions. Fact: Retail footfall is down across the board, with out-of-town retail schemes feeling the greatest pain. Fact: A growing number of retailers have entered administration or have issued severe profit warnings.
Given the above, it is no surprise that retailers are re-examining their property portfolios, and EBIT considerations necessarily have to take precedence over market share growth or international expansion.
However, this year an unprecedented amount of new retail floorspace has come onto the market, including very large schemes in Liverpool, West London’s White City, Bristol and Leicester.
How these and other projects will fare in these tough market conditions is clearly a key question, both for retailers and the owners of these schemes.
What is clear, however, is that while some centres may rise or fall in the rankings, the top towns are still very much an exclusive club, and continue to command the highest rental premiums, given the potential for retailers to significantly out-perform in
Despite the huge influx of new space this year, the top 10 retail locations in the country remain relatively unchanged compared with 2007 – the exceptions being Liverpool, which has moved from 15th to fifth, and Westfield London, which we predict will achieve 10th position.
Looking forward to 2018, the degree of change is more significant, with most of the top towns seeing a change in both their retail catchments and the level of spend they capture through new or competing development.
As might be expected, there are clear winners and losers.
Close examination of the future projections in this supplement would certainly be a prudent measure therefore, as choosing the right location has never been more important.
Jonathan De Mello is director of property consultancy, Experian