Demand for Retail Space

2017 is looking to be a positive year for shopping centres in terms of leasing. Hammerson has reported an increase of 44% in leasing volumes across the first half of the year! Intu Properties have also released their interim report which demonstrates the market’s resilience. They have reported 103 lettings in the first 6 months of the year with additional tenant’s upsizing and upgrading their units alongside this!

It is starting to feel a day doesn’t pass without seeing news of a Shopping Centre gaining a new tenant. Here are some examples of new tenants that have been reported over the last couple of weeks:

  • Hunter Real Estate Investment Managers has agreed to a series of lettings at Cameron Toll shopping centre in Edinburgh, bringing the scheme to 99 per cent let.
  • Realm has secured a flurry of lettings at Livingston Designer Outlet. The deals bring the total volume of retail space exchanged in the past year to 25,335 sq ft, with brands including Barbour, Timberland and Hugo Boss all committing to the scheme.Since Realm was appointed asset management of the scheme in 2013, occupancy rates have increased by ten per cent to 95 per cent let.
  • CBRE’s head of UK retail, Rhodri Davies, said: “London’s overall performance is emblematic of the broad strength we are seeing across the retail market in Europe. Demand for quality retail space in London remains robust and the arrival of brands such as New Balance, and Nars has further underlined the importance of these prime shopping destinations.”
  • Liverpool have seen a bustle of new retailers entering across St John, Clayton Square and Liverpool One

E-commerce does continue to pose a threat to the high street and has done for some time, but with strong footfall, retail space being leased across the board; it doesn’t look like this ‘threat’ is diminishing the need for physical space just yet. A multi–channel approach to retail is a theme that has continued to expand, so it would seem e-commerce is now a tool to work alongside brick-and-motor, not against.

Retail leasing across the UK appears active going into the second half of the year. Shopping centres are working hard to expand their offering, drive footfall and enhance their facilities to entice retailers to lease space and it can be seen the developments and refurbishments across the industry are really driving new tenants. It is becoming increasingly apparent that for a centre to be successful and thrive, the tenant mix needs to be considered and diverse including; retail, F&B, leisure and a strong anchor tenant, and the positioning of these tenants need to be strategised in great depth.

Overall, the market feels active and developing at pace. It is exciting to see that shopping centres are successfully attracting tenants and working alongside these tenants to create a forever developing and engaging strategy, truly enhancing the guest experience!

Kat Whitehead, Senior Marketing Executive, Foundation Recruitment

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