NEWS
The highs and lows of retail rentals: £3.7 billion lost each year to vacant retail spaces
¡ £24.48 is the average annual price per square foot for retail spaces, with 150 million square feet of vacant retail space, there’s £3.7 billion worth of unused space in the UK ¡ Blackpool is the most affordable area, where the average price is 75% lower than in London, alongside having the best post-pandemic recovery score in the UK ¡ Oxford is the second-most expensive, just 13p per square foot less than London ¡ Kensington and Chelsea is the most expensive borough in London, alongside being 252% more expensive than the UK average
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eal Business Rescue has analysed current commercial retail listings to find the most and least expensive areas in the UK for business owners to open up shop.
The cost of retail rent in areas where we’ve seen the best footfall recovery following the pandemic
The success of retail stores partially depends upon footfall, so Real Business Rescue explored the footfall recovery scores of the UK’s towns and cities (versus pre-pandemic) compared to their average rental price per square foot each year.
Rank Location
Plymouth Blackpool
Southend-on-sea Dundee Burnley
Footfall recovery score*
165 160 143 140 138
Average price**
£20.08 £12.45 £20.88 £20.04 £21.36
The recovery index score is a number between 59 and 165, and Plymouth has scored 165, showing it has seen footfall return or ‘recover’ to pre-pandemic levels more quickly than other locations. But, if you look at second place, Blackpool has the second-highest footfall recovery score in the country, alongside being the cheapest for retail rental at just £12.45 per square foot.
The worst footfall recovery score in the UK was from London, at just 59, alongside being the most expensive place for retail rent. This suggests that London is the least recovered compared to pre-pandemic foot traffic levels. This indicates that businesses in the capital might not be getting value for money paying premium retail rent when the footfall hasn’t recovered from the pandemic.
THE MOST AND LEAST EXPENSIVE RETAIL RENTAL AREAS IN THE UK Rank Top 10 most expensive
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2 3 4 5 6 7
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London Oxford York
Cambridge Leeds
Chester
8 St Albans 9
Bath Crawley
£49.64 £49.51 £47.75 £46.78 £44.88 £43.14
Milton Keynes £41.21
£38.53 £37.96 £34.72
Top 10 least expensive Blackpool Rotherham
Stoke-on-Trent Hartlepool Telford
Blackburn Nuneaton Rochdale Grimsby Halifax
£12.45 £12.48 £12.91 £13.09 £13.23 £13.42 £15.07 £15.10 £15.30 £16.45
Home to some of the highest footfall and several tourist hotspots, it’s easy to see why London has the most expensive retail property rents per square foot. However, experts have also predicted that prime retail
rentals in London city will fall by 1.1% by 2025.
In second, but not that much cheaper per square foot, is Oxford, at an average of £49.51. Although recent reports have said that Oxford is among some of the UK’s worst for empty retail units since the pandemic, retail rent could still be at a premium due to council investment in the area, a budding population of younger professionals thanks to planned new housing developments, and tourism generating £780m of income a year for local businesses.
The third highest average price per square foot per year is York at £47.75. York is a historic city, which attracts 7 million visitors a year. It was also named the third best place for independent shopping, which could explain why it has some of the highest rental prices in the country. In terms of the most affordable retail rental price, Blackpool is the cheapest at an average of £12.45 per square foot per year. The seaside town of Blackpool saw a record boom in visitors in 2021 following the pandemic, with more than 12 million people visiting the town centre compared to about 9 million in 2019.
THE MOST AND LEAST EXPENSIVE RETAIL RENTAL AREAS IN LONDON Rank Top 10 most expensive
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Kensington and Chelsea
Westminster Islington Kingston
upon Thames Southwark
8 Hammersmith and Fulham Ealing
10 Richmond upon Thames £42.97
252% more expensive than the UK average, Kensington and Chelsea is the most expensive borough per square foot, at £86.18. The City of London comes in second at £63.96 per square foot, on average. The third most expensive is Camden, at £56.21 per square foot per year, almost £30 a year cheaper than Kensington and Chelsea.
Kensington and Chelsea is home to some pricey shopping districts and high streets including Kensington High Street, King’s Road and Knightsbridge, where you’ll find many designer fashion brands and specialist jewellers, which is likely why the rental here reflects the higher ticket-priced items sold.
Shaun Barton, National Online Business Operations Director at Real Business Rescue, comments: “Rental prices are just one of the many rising costs affecting businesses across the nation as they battle through one of the toughest periods they’ve ever faced due to the ‘cost of doing business crisis’ and rising inflation. Not only do these prices lead to vacant retail spaces, which can have damaging effects on high streets up and down the country, but it’s another pressure point for small and medium-sized enterprises (SMEs) everywhere.
“Last July, the moratorium on aggressive debt collection among commercial landlords was no longer in effect and pressure on retailers increased significantly as a result. With the fallout from the pandemic, and now a ‘cost of doing business crisis’, it is clear that a significant number of retailers across the country are facing a battle to remain financially solvent and viable.”
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City of London £63.96 Camden
£56.21 £49.36 £45.32
£45.23 £45.22
£43.94 £43.25
Top 10 least expensive Barking and Dagenham Havering Hillingdon Barnet Sutton
Lewisham Croydon Redbridge Bromley Greenwich
£23.16 £23.70 £26.08 £27.83 £27.99 £28.73
£29.22 £29.73
£32.77 £33.35
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