2023-05-19-莱坊-Central_London_Retail_Market_Dashboard_Q1_2023_2页_876kb

Central London Retail Dashboard Summary

Core Content

This document presents a quarterly update on the retail market in Central London, focusing on consumer behavior, lettings activity, investment trends, and market sentiment. It outlines the current state of the market and provides insights into the challenges and opportunities facing landlords and retailers.

Key Takeaways

• Retail Spend vs. Footfall: Retail spend in the West End is growing faster than footfall, suggesting that consumers are making fewer visits but spending more when they do. In Q1 2023, retail spend increased by +4% compared to 2019 levels, while footfall decreased by -27%.
• International Visitor Recovery: International visits are rebounding faster than expected, with the volume of international visitors in the West End projected to fully recover by Summer 2023. July hotel occupancy forecasts are already matching 2019 levels.
• Occupier Demand: There is strong occupier demand, with major brands and independents taking new space. This demand is driving upgrades to properties to meet new market expectations.
• Sub-quality Stock: The trend of up-sizing and relocating has left a residue of sub-quality stock (EPC F or G), which landlords must address quickly to successfully relet.
• MEES Regulations: The new Minimum Energy Efficiency Standards (MEES) regulations, effective from April 1, are pushing landlords to improve the energy efficiency of their properties.

Market View

• Occupier Optimism: 71% of luxury London brands are optimistic about business prospects in the next year, while 11% are uncertain.
• Upsizing and Relocation: Key examples of new spaces include:
  • Rixo on 114 - 116 Kings Road
  • Bloobloom on 30 James St
  • Diptyque on 107 New Bond St
• Investment Activity: Investment volumes are showing positive momentum, with notable deals:
  • 30 Coleman Street sold for £17.8m at a 6.75% yield
  • 27 Old Bond Street sold for £143m at a 2.58% yield
  • Purchasers include AM Alpha GMBH and Blue Tower Ventures

Key Lettings

• Bonbon secured a 2,090 sq ft unit at 197 Kensington High Street
• Gaucho took a 6,200 sq ft unit at 8 – 9 James Street (Covent Garden)
• Maniere De Voir leased 5,100 sq ft at Oxbourne House (Oxford Street)

Market Trends

• Rental Growth: Rental growth is being driven by the demand for better quality spaces. Sub-market rental growth is highlighted, with the Prime Zone A Rents and Rental & Capital Value Growth showing positive trends.
• Prime Yields: Prime yields in Central London are lower than the UK average, indicating strong demand and potential for value appreciation.

Vacancy Rates

• Vacancy rates are reported for various sub-markets, including Oxford St, Regent St, Knightsbridge, King's Rd, Kensington, Covent Garden, and City Bond St. While specific figures are not provided, the context suggests that vacancy levels are a concern for landlords.

Contact Information

• Retail & Leisure Agency:
  • Josh Braid: Partner, +447793082342, Josh.Braid@knightfrank.com
  • Rob Hargreaves: Partner, +447977998832, Rob.Hargreaves@knightfrank.com
• Commercial Research:
  • Stephen Springham: Partner, Head of Retail Research, +447468727557, Stephen.Springham@knightfrank.com
  • Ollie Green: Partner, +447890989836, Oliver.Green@knightfrank.com
• Lease Advisory:
  • Andrew Thatcher: Partner, +447793273532, Andrew.Thatcher@knightfrank.com

Important Notice

• Knight Frank LLP provides strategic advice and consultancy services.
• This report is for general information only and should not be relied upon.
• Reproduction of the report without prior written approval is not allowed.
• The report does not necessarily represent the views of Knight Frank LLP on specific properties or projects.

Additional Information

• Reports are available at knightfrank.com/research
• The document includes several charts and images related to rental growth, investment volumes, and vacancy rates, which are not included in this summary.