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Landlords offer lower rents for shops
High Street landlords are striking loss-leading deals to let out shops rather than leave them empty, according to a new North West study.
Property agent Colliers CRE found many High Street and shopping centre landlords have frozen or cut rents to attract retailers to unlet units.
Some are offering free rent for up to three years as an incentive.
But the research reckons the region's rents are holding up better than much of the rest of the country.
Collier's Midsummer Retail Report forecasts that North West retail rents will fall by 13.1% in 2009 and by 7.6% in 2010, compared to by 14% this year and by 9% in 2010 nationwide.
Nick McAllester, head of retail agency at the Manchester office of Colliers CRE, said: "This year the realisation we are in a full blown recession has caused many landlords to see the cost of leaving units vacant is more detrimental to their investment values than the negative impact of doing 'below market' deals.
"Just nine to 12 months ago, many landlords were holding out for deals which would not negatively impact values, today income, even very short term income, is seen as key."
Rents in St Annes town centre and Manchester's Trafford Centre were among those staying static in 2008-9.
Keith Mitchell said Preston's Fishergate centre, where he is manager, had bucked the rental downturn trend and had recently filled a number of units with the arrival of Cafe Moka, Caffe Latino and Freedom Bikes.
He said: "Rent levels at Fishergate are generally not being pressured by the current downturn.
"Fishergate is slightly off the High Street patch and our rents tend to be a little lower than prime pitch areas.
"Because of that, perhaps, retailers are looking for more cost-effective but high quality retail locations.
"We have a virtually full let now.
"We have got a lot of value stores – Primark, TJ Hughes, Argos, and also Poundland, which is performing extremely well."
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Thursday 09 February 2012
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