Insight: London retail redevelopment picks up as prime locations enjoy stable void rates
New research has shown that retail space that is under redevelopment in the London’s West End has risen to 101,000 square feet.
According to the study by Colliers, this marks a major uplift from the 31,000 square feet recorded in December 2019 and is 49% up on the five-year average.
The research also reveals that units housing global brands have fared well. including on Kings Road where the Duke of York Square was shown to be 100% occupied. Meanwhile, Regent Street saw its unit void rate decline from 10% in December 2019 to 8.4% in January 2022. Colliers found that pitches reliant on local workforces have been hit hardest, which has led some retailers to reduce or change opening days and hours as they look to benefit from the highest rates of footfall in their area.
Paul Souber, head of central London retail at Colliers, said: “The retail void rate in central London can’t be explained by one factor, as each pitch has its own character and mix of brands. One thing that has contributed, particularly on Oxford Street is the loss of the department store.
“While these are being redeveloped, the projects will take time and as such will keep the headline rates high. Elsewhere, void rates need to be managed with great care to ensure that the right occupier is put in place that compliments the location be that a pop up, new entrant or a brand looking for rightsized space.”
Th study shows that Cheapside in the City of London has been hit hard with the unit void rate rising from 3.4% in 2019 to 24.8% in 2022. However, Colliers anticipates that Cheapside and other City locations will recover rapidly as more people head back to working in offices.
In contrast, Kensington High Street has seen a resurgence in new lettings as brands take advantage of rebased rents and look ahead to a surge in footfall as local commuter and international travel increases.
Walter Boettcher, head of research and economics at Colliers, added: “While void rates remain generally high, movement looks to be in a positive direction. The surge in refurbishments across the pitches bodes well, given opportunities for new market entrants and the possibility of repositioning high streets generally. Despite an obvious ‘pandemic hit’ to London’s key retail destinations, punctuated by ubiquitous ‘pop up’ shops, few signs of a lasting upheaval are evident.”