Colliers CRE’s annual Retail Market Overview reveals that the capital’s rental growth has fallen to the same level as the rest of the country – up just 1.1 per cent compared with last year’s figure of 4.9 per cent. It cites falling consumer confidence and the credit crunch as the reason behind the poor figures.
The report also claims that the weak rental market is likely to affect Westfield’s upcoming shopping centre launch in west London. It said: “While the letting agents report commitment on the majority of units, a number of shops will not be open and trading when the scheme opens.” Westfield was unavailable for comment.
The capital is now sixth in the national rental growth rankings. Growth in the capital is now in line with the UK average of 1.1 per cent, which fell well behind London’s growth figure last year, reaching only 2.8 per cent. The report also says that if retail price inflation was taken into account, rents would have fallen 3 per cent for London as a whole and 2.5 per cent in the centre of the capital.
Central London remains slightly more stable than the national average, with rental growth up 1.7 per cent – although this is also considerably down on last year, when the area experienced a 4.5 per cent increase. Outer London, however, achieved a rise of only 0.1 per cent.
Only 24 per cent of London’s retail centres experienced an increase in prime rental growth. 3 per cent experienced a fall. Of the top 10 centres with the most expensive rents in central London, six had rental increases, while six were unchanged. 12 centres were listed because three shared 10th place.
Colliers CRE head of research and forecasting Dr Richard Doidge said: “London has come back down from its good performances in recent years, but everything’s come down and central London is still performing better than the UK average.”