Retail rental growth has fallen by 38% in the North West since 2007, according to research from Cushman & Wakefield, adding to a growing body of evidence to support the re-purposing of traditional retail high streets.
The region’s rental growth varies significantly with Manchester only experiencing a 7% decline in rents, based on £/sq ft, between December 2007 and December 2017, while other towns including Blackpool have seen rental growth dip by around 45%.
Overall, however, the North West’s rental growth over the last 10 years is the worst in the country, followed by the West Midlands, where rental growth has dipped by 36%, and Wales, where it has fallen by 35%.
In Greater London and the South East, these figures stand at 16% and 20% respectively.
Vacancy rates are 14% in the North West, a figure matched by Wales, the West Midlands, and Yorkshire, and only the North East at 15% has a higher vacancy rate in the UK. Again, vacancy rates are significantly lower in Greater London at 8%.
Amy Gibson, author of the report, said the findings pointed to “re-purposing the high street,” citing Altrincham as an example where the local authority and local businesses had responded to falling prime rents and weak retailer demand.
The number of vacant shops in the town has dropped by 73% since 2010, according to research shared with Place North West earlier this year, while footfall rose by 5% in the last year alone after heavy investment in public realm, the town’s market, and independent retailers.
“Consumer tastes and needs have evolved over time and it is clear from our analysis that some locations have adapted more effectively than others to the ongoing structural change in the sector,” she said.
“Consumers are willing to travel further to seek out new and exciting retail experiences, whilst simultaneously demanding greater convenience nearer to home.
“This creates opportunities on some of the country’s most challenged high streets to diversify beyond the traditional retail offer and explore alternative uses that are relevant to the needs of the catchment population.”
Some large-scale retail forays in the region have proved to be less successful, including Northwich’s £71m Barons Quay, which is still largely vacant more than a year after opening.
The research also ranks towns and cities across the UK based on a retail resilience index, which measures factors including rental change, yield shift, capital value growth, retailer demand, tourist spend, and quality of life.
Of the 250 towns included in the research, Cambridge is ranked top, while no town in the North West makes the top 10, which is primarily made up of centres in the South East and South West. The region’s best performer is Liverpool at 34, followed by Manchester at 38 and Chester at 47.
Llandudno makes the bottom 10, ranked at 246, while Blackpool is also ranked as a poorly performing town.
George Lowe of Cushman & Wakefield’s retail team in Manchester said: “The North West retail market is undoubtedly going through a challenging period, with many traditional retailers downsizing and focusing on the online side of their business.
“We have seen retailers making efforts to broaden the customer experience, encompassing elements of leisure and food & beverage into their offering.
“Altrincham in Cheshire has been something of success story following the refurbishment of its market hall and the opening of a new health and wellbeing centre. The result has been an increase in footfall and reduced vacancy rates.”