Manchester’s traditional upmarket retail pitch is experiencing a recovery, with at least four new brands expected to open in the next few months, after struggling with a high proportion of vacant units for the past couple of years.
There are 30 units on King Street and eight are currently vacant. However two are taken and one is under offer, with two more close to securing an occupier.
In May 2013, eight units were vacant, with a further eight occupiers understood to be marketing their leases for sale.
Fashion retailers Jigsaw and Bravissimo both moved into the street from the Corn Exchange in recent weeks, and are experiencing booming business.
Simon Binns, manager at Heart of Manchester Business Improvement District, said: “I would be disappointed if we didn’t see three or four new shops in the next three months. The current interest shows a vote of confidence in the retail core, with activity still focused around King Street, Market Street and New Cathedral Street. King Street is still a compelling pitch, particularly for destination brands.”
Binns said that King Street would be getting new operators to the city, as well as international brands branching out for the first time into the UK market.
The units on the street are owned by various parties, such as funds Axa Real Estate Investment Managers, Aviva, Royal London Asset Management, Standard Life and Scottish Widows Investment Partnership.
According to Binns, the shared ownership of King Street is contributing to its growing strength: “With more than 20 owners across the street, co-ordination was often a challenge. However now, people are pulling in the same direction and a community has formed which is looking at how best to maximise on the King Street offer. We expect confidence and interest to increase over the coming months – people just want to be where the action is.”
The King Street offer is diversifying, with a unit previously let to Monsoon taken by an unnamed food and drink occupier, according to agents. The old Savoy Tailors Guild store is being fitted out by fashion retailer The White Stuff for its first city centre shop. The former Hobbs unit is also under offer to another clothing brand. The shop previously operated by Duo at 20-22 King Street in recent weeks came close to securing an occupier before the deal collapsed. Three brands are interested in space at 28 King Street.
Part of King Street’s appeal is its strategic location, according to Tom Prescott, associate director of retail agency at CBRE. He said: “King Street is a strong proposition for a lot of the aspirational brands. It is an attractive environment, the units suit a lot of occupier’s size requirements, House of Fraser provides a strong anchor and helps to drag footfall from the prime areas on Market Street and within the Arndale.”
Competition between city centre locations was once a problem for King Street, with attractive rent-free periods and other incentives offered by nearby Spinningfields’ The Avenue and the Corn Exchange luring retailers away.
Prescott continued: “Occupiers had four pitches to consider; New Cathedral Street, The Avenue at Spinningfields, The Corn Exchange and King Street. With the Corn Exchange now focused entirely on leisure and The Avenue looking to replace underperforming retailers with restaurants, aspirational occupiers have a much clearer decision to make when looking at Manchester.
“At King Street, units are available immediately and rents are currently at a very affordable level.”
According to Jonathan Thompson, partner at Tushingham Moore, rents at King Street are currently at around £120 to £130/sq ft, compared to pre-recession prices in 2007 which hit around £220/sq ft for some deals.
The refocus of the Corn Exchange and The Avenue can be taken as a reflection of the strength of Manchester’s appetite for new food and drink operators.
Mike Ingall, chief executive of Allied London, said: “We are consciously asset-managing The Avenue to evolve it into a mixed-use street. Our idea in 2007 when visualising The Avenue was that we wanted to give Manchester a selection of high-end brands in one location.
“However by 2009 we realised we would be unable to co-locate all the brands we wanted into one place, so rather than try to retain the retail pitch that didn’t have the right offer we decided to convert The Avenue into a high-quality mixed destination, with top retailers and quality dining side by side.”
On the 12-unit Avenue, at least five retailers are expected to remain, with Flannels, Armani, Mulberry, Nicky Clarke and Oliver Sweeney earmarked as continuing occupiers. Three units are currently vacant.
The Avenue has already begun to welcome the first wave of new restaurants, with Thaikun moving into 16-17 The Avenue, Spanish chain Iberica confirmed as the tenant in the former All Saints unit at 14-15 The Avenue, Ingall said, and the Ted Baker and Kurt Geiger stores at 6 and 7 The Avenue set to become home to Brazilian grill restaurant, Fazenda. A new Southern 11 site is confirmed for the former Brooks Brothers unit at 19 The Avenue.
Over at the Corn Exchange in Exchange Square, the entire site is to be vacated ahead of redevelopment work beginning in August. The six café/restaurants occupying the ground floor, including Pizza Express and Zizzi, will exit in the interim until construction is completed. Stuart Harris, partner at Queensberry Real Estate, the developer selected by the Corn Exchange’s owner Aviva Investors, said that the building is due to reopen in July 2015.
There are 13 units available and 10 restaurant deals have been agreed, Harris said. He added that Queensberry was still looking for a hotel operator for the Corn Exchange.
The cyclical nature of King Street’s fortunes sees it on the rise again, with a less confused landscape in Manchester’s retail market it might just stay that way for a while longer this time.