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Savills World Research UK Commercial
Spotlight
Central London Retail Outlook
February 2013
SUMMARY
■ We are expecting a quieter 2013 with fewer occupier requirements being pursued less aggressively, although a number of US brands continue to look at Central London.
■ Gentler occupational demand and a slight rise in voids, in light of the increasing number of lease expiries expected this year, could see growth in prime rents ease in 2013.
■ The relative expense of operating a retail unit in Central London's prime pitches, means that new entrants are likely to remain focused on a single fl agship store.
■ Diffi culties of sourcing retail sites in the West End has, and will, continue
to open up new retail pitches as will the arrival of Crossrail. New pitches have been particularly attractive to new entrants to the UK, and existing brands, looking to test new concepts in relatively more 'affordable' locations.
■ Investor demand has remained strong, particularly for key units in prime locations. This is set to continue. As a result prime yields are to remain low and under downward pressure.
■ The Central London retail market to remain one of the most sought- after investment destinations globally. Void rates on the key streets remain exceptionally low making Central London retail a low risk investment.
“Occupational demand remains strong but we're likely to see fewer new international entrants. In response, we may see growth in prime rents ease this year”