2023-12-04-莱坊-Central_London_Retail_Market_Dashboard_Q3_2023_2页_934kb

Central London Retail Dashboard Summary (Q3 2023)

Core Content

The Central London Retail Dashboard Q3 2023 provides a concise overview of the current retail market dynamics, highlighting the return of high-spending tourists, increased occupier activity, and investment trends. It emphasizes the resilience and recovery of the retail sector in Central London, despite ongoing challenges such as rising rents and subdued overall footfall compared to pre-pandemic levels.

Main Points

1. Tourist Spending and Footfall

• High spending international tourists, especially Chinese visitors, have returned to Central London, marking a key recovery factor.
• Tourist visits in September 2023 increased by +151% compared to 2022, with transaction volumes rising by +3%.
• However, overall spend and footfall remain -16% below 2019 levels.
• Footfall in the West End has shown a gradual improvement, with a +6% YoY increase in the nine months to September.
• Footfall vs. 2019:
  • July: -25.0%
  • August: -22.0%
  • September: -16.0%

2. Occupier Activity and New Openings

• Regeneration plans for Central London, particularly on Oxford Street, have spurred renewed interest from both international and domestic brands.
• Several new openings were reported, including ME+EM, Whistles, Pandora, Sweaty Betty, Kurt Geiger, and French Connection.
• A total of 23 new brands are expected to enter the market in Q4 2023 and 2024, including Krispy Kreme, Miniso, The Fragrance Shop, Dr Martens, and Hackett.
• Leisure anchors such as Moco (modern art museum) and Pocket Planet (immersive miniature world) are also set to open in 2024.

3. Investment Trends

• Investment activity has been driven by luxury brands acquiring flagship properties to hedge against rising rents.
• Richard Mille, a Swiss watch company, acquired Stanbrook House (2-5 Old Bond St) for £170m.
• Key investment deals include:
  • 175 – 179 Oxford St: Sold for £33.5m at a 6.1% yield.
  • 92 Bond St: Sold for £11.0m (yield not specified).
• Investment volumes have shown signs of recovery, with a focus on prime locations.

4. Rental Growth and Market Stability

• Rental growth has been sustained in Central London, with activity concentrated on prime pitches.
• Vacancy rates have increased slightly, reaching 10.7% in Q3 2023, up by +10bps from previous levels.
• Vacancy rates have stabilized around 10.6% since 2021, indicating a mature market.
• Prime Zone A rents have seen a bi-annual increase, as reported by PMA and Knight Frank.
• Rental & Capital Value Growth in Central London has been positive, with data from MSCI and Knight Frank showing continued growth.

5. Market Sentiment and Outlook

• The return of HMV to Oxford Street is symbolic of renewed occupier interest in the area.
• The Elizabeth Line has contributed to the growth in footfall, with 68 million passengers visiting the West End in 2023.
• Retail and leisure sales are expected to reach £8.9bn for the year, a +11% increase from 2022.

Key Information

• International tourists are the core customer base for Central London retail, contributing ca. 50% of spend.
• Regeneration plans are a major driver of occupier activity and new developments.
• Vacancy rates have remained relatively stable, with a slight increase to 10.7%.
• Investment is focused on prime locations, with luxury brands leading the charge.
• Rental growth has been consistent, especially in prime zones.
• The market is showing signs of stabilization, with renewed interest from both domestic and international brands.

Contact Information

• Retail & Leisure Agency:

  • Jonathan Eastwood: Head of Retail Agency, National Retail. Email: Jonathan.Eastwood@knightfrank.com. Phone: +442086827769
  • Ollie Green: Partner, Central London Retail & International Agency. Email: Oliver.Green@knightfrank.com. Phone: +447890989836
  • Josh Braid: Partner, Central London & International Agency. Email: Josh.Braid@knightfrank.com. Phone: +447793082342
  • Rob Hargreaves: Partner, Central London & International Agency. Email: Rob.Hargreaves@knightfrank.com. Phone: +447977998832

• Commercial Research:

  • Stephen Springham: Partner, Head of Retail Research. Email: Stephen.Springham@knightfrank.com. Phone: +447468727557
  • Emma Barnstable: Associate, Commercial Research. Email: Emma.Barnstable@knightfrank.com. Phone: +442081061385
  • Ryan Mak: Surveyor, Retail & Leisure Agency. Email: Ryan.Mak@knightfrank.com. Phone: +442078611733

• Lease Advisory:

  • Andrew Thatcher: Partner, Central London Lease Advisory. Email: Andrew.Thatcher@knightfrank.com. Phone: +447793273532

Additional Resources

• Quarterly dashboards and weekly Retail Note are available to keep up to date with market trends.
• Sign up online for more detailed insights and updates.
• Knight Frank Research provides strategic advice, consultancy services, and forecasting to a wide range of clients.

Disclaimer

• This report is for general information only and not to be relied upon.
• No responsibility or liability is accepted for any loss or damage resulting from its use.
• Reproduction of this report is not allowed without prior written approval.