The latest Midsummer Retail Report from Colliers International has named Manchester as the only centre to achieve substantial rental growth in the region in the past year, while Liverpool enjoyed 99% occupation in its prime locations.
The research into the performance of 39 retail locations in the North West between April 2015 and April 2016 showed that average rents increased to £270/sq ft. Rent in Liverpool remained stable at £265/sq ft over the period, while the other 37 locations surveyed recorded slight positive rental growth of 0.3% as a whole to an average of £87/sq ft.
According to the report, only 1% of prime floorspace, equating to three shop units, remained available in Liverpool, which Colliers said reflected ongoing demand from retailers particularly for physical space in Liverpool One. Vacancy rates for the city as a whole improved from 10.6% to 8.4%.
Retail rents continued to fall in Southport, where rents declined by 10% and Bolton, which witnessed a 5% drop, primarily because of a continued over supply of available property and intense competition from competing retail and leisure destinations.
Retail rents in the North West as a whole were marginally higher than those for Great Britain, excluding London, at an average of £86/sq ft, while the national average including the capital stood at an average of £136/ sq ft.
Speaking to Place North West, David Fox, head of retail agency North at Colliers International, said that investment activity had been slow in the period, and that he didn’t expect many decisions “as the market is too volatile” following the Brexit vote. However, he said that “there is money waiting, and it is there for when it’s safe to invest and there’s more confidence about value for money”.
On the occupier side, Fox said that there had been little impact, although “whether the market remains steady depends on if consumer confidence changes and if people stop spending”.
He was confident about the picture in Manchester, which he called “best in class”.
“There’s lots of things happening and the city has prime assets, so any dip in the market will show in the areas that have struggled for some time. There is too much retail, a lot remains that was built even at the start of the last century, and is not fit for purpose.
“However, it’s suitable for other uses, as we’re seeing with restaurants taking units in previously prime retail areas. People are always dining, that’s consistent whatever the climate.”