A new report by Colliers reveals that Central London’s retail space is making progress in its recovery rate. The report indicates that retail units housing global brands have experienced fewer vacancies compared to other retail spaces. While the void rate remains high, largely due to the closure of department stores on Oxford Street, it is showing signs of improvement. In February, it was reported that retail space being redeveloped in the West End had significantly increased to 101,000 sq ft, a significant rise from the 31,000 sq ft recorded in December 2019, and 49% higher than the five-year average.
The report also highlights that the super prime sections of retail pitches, such as the Duke of York Square on the Kings Road, have remained largely unaffected by vacancy issues. In fact, the Duke of York Square reported 100% occupancy. Despite the challenges posed by the pandemic, Regent Street has seen a decline in its unit void rate, from 10% in December 2019 to 8.4% in January 2022, following a peak of 13% in July 2022. However, retail spaces relying on local workforces have been hit harder, leading some retailers to adjust their opening days and hours to attract more footfall.
Cheapside, a prominent shopping street in the City of London, has experienced a significant increase in its unit void rate, rising from 3.4% in 2019 to 24.8% in 2022. Nonetheless, Colliers predicts a rapid recovery for Cheapside and other City locations as more people return to the office. Recent data from footfall monitoring service Springboard also indicates higher rates of return to the City, suggesting a shift away from concerns about the Omicron variant.
Colliers highlights that flagship stores housing global brands have been less impacted by the pandemic compared to other retailers. The report states that “super prime portions of pitches look largely unaffected”. As a result, popular shopping destinations such as Bond Street, Regent Street, Kings Road, and Long Acre have fared relatively well. Although the unit void rate on the Kings Road has slightly increased from 5.3% in 2020 to 6.6% in 2022, Kensington High Street has seen a decrease in its void rate from 14.5% in 2020 to 12.5% in 2022. The vacancy rate of floor space on Kensington High Street is also slightly lower than the West End average of 9.3%. Colliers attributes the resurgence in new lettings on Kensington High Street to the affluent local demographic and the shift to remote work, expecting footfall to increase as commuters and international travelers return.
Walter Boettcher, head of Research and Economics at Colliers, expresses optimism about the direction of movement in void rates and highlights the surge in refurbishments as a positive sign. This creates opportunities for new market entrants and the potential for high streets to be repositioned. Despite the impact of the pandemic on London’s key retail destinations and the prevalence of pop-up shops, the report suggests that there are few signs of lasting upheaval.
Useful links:
Colliers – UK Retail Update 17th February 2022
Springboard – Weekly Footfall Indices
