Central London experienced virtually no growth in retail rents over the past year, according to the study. In addition, rents across the capital grew by just 1.6 per cent, well below the UK average of 3.1 per cent.
However, the city centre remains the most expensive shopping area in the UK and boasts the top five highest retail locations in the UK in rental terms. At£520 Zone A, Brompton Road in Knightsbridge is the highest rented centre in the UK, followed by James Street at£515 and Oxford Street West at£485.
Colliers CRE head of research Dr Richard Doidge blamed the slump on a decline in international tourism since September 11, 2001, the congestion charge and numerous transport problems. 'Another factor affecting central London is the downturn in the City, which has been hit by job losses and falling bonuses,' he said.
In contrast, the outer suburbs are more buoyant, with a 4.9 per cent rent hike over the past year. Retailers in Holloway, north London, can expect the biggest rent rises, following a 40 per cent surge in rental values in the past year. Nearby Islington saw a 23.1 per cent increase and Wembley 22.2 per cent.