Rents on London's Oxford Street are likely to start growing again this year, according to a forecast from Lambert Smith Hampton (LSH).
The agents put present prime Oxford Street rents at£480 Zone A, down from£500 at the beginning of last year. This is below levels achieved in the late 1990s, but LSH says the location may be about to turn the corner.
According to LSH, there is strong demand from UK and overseas retailers looking for central London flagships, which means any large units coming to the market are snapped up rapidly.
Recent examples include New Look taking 22,000 sq ft (2,045 sq m), River Island 25,000 sq ft (2,320 sq m) and Zara 30,000 sq ft (2,790 sq m).
Broadly, LSH expects rents in most major centres to be static during the coming year, although Dublin, Edinburgh, Leeds and Nottingham will buck this trend with increases.
However, the agent says that retailers' increasing demands for larger trading floors is threatening the vitality of many of the UK's towns and city centres.
LSH head of retail Michael Perkins said: 'What we are seeing is retailers such as Mango, JJB Sports, Next and H&M looking for the large, modern floorplates, which will enable them to maximise their profit margins in a highly competitive marketplace. Landlords are coming up with solutions such as amalgamating several existing shop units into one large floorplate.
The net result is fewer shops at the town centres and a growing threat to the smaller chain stores and independents, which cannot compete on rental costs.'
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