Last year, retail rents in 45% of West Midlands’ centres were in decline, but there was a turnaround in H1 2016, according to research by Colliers International.
Marking a significant improvement, 89% of the centres monitored by Colliers across the region recorded stable rents, leaving only two centres where rents fell - Burton upon Trent and Evesham.
“Overall, the West Midlands recorded average rental growth for the first time since the recession began, albeit only 0.4% across the region and with most of the region characterised by stability as opposed to growth,” explains Emel Ahmet, an associate director in Colliers International’s retail agency team in its Birmingham office.
This new-found stability was in part down to the opening, in August, of the £70m Riverside development in Stafford where H&M, Marks & Spencer and Costa Coffee are all now trading, and where Primark is expected to open in October.
“In anticipation of this step change in the retail offer in Stafford, Colliers recorded 17% growth in prime zone-A rents from 2015 to 2016, the highest growth in the region and one of only three ‘small towns’ in the UK to record growth this year,” says Ahmet.
In Birmingham, there has been a raft of retail developments over the past 12 months, amounting to more than £1bn of investment.
Grand Central, which opened earlier this year, is the biggest retail project in Birmingham for more than a decade and has attracted more than 30 new retailers into the city such as Joules, The White Company, Kiehl’s and Mint Velvet. The scheme has also established itself as a new casual dining destination with operators including Leon, Giraffe and Tortilla.
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The new Mailbox opened its doors late last year following a £50m transformation. Harvey Nichols has relocated to the centre of the scheme with a new 45,000 sq ft flagship store - double the size of its previous trading space - and last week it was announced that Paul Smith will take 1,645 sq ft next door.
The glut of new shopping centres and retail developments has clearly helped to boost retail rents in the region after so many years of decline, bringing some sense of stability to the market. Only time will tell if the region can continue to build on this growth.
25 October 2016
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