According to new research from Savills, retailers are increasingly considering Tottenham Court Road, Kensington High Street, Lower Regent Street and Soho for shops. The property agent believes that rents in these areas could grow by 30 per cent to 50 per cent in the next few years.
The findings prove how London is bucking the national trend for high streets, with many retail destinations in the UK suffering from increasing vacancy rates and store closures.
The past 12 months have seen new record rents for Bond Street and Oxford Street. Shoe retailer Footlocker agreed to pay £800 per sq. ft. at its new Oxford Street store, while luxury jeweler Boghossian set a high of £1,050 per sq. ft. on Bond Street.
This rise in rental costs and the shortage of available units in the West End mean retailers are turning to locations that in the past have been considered as peripheral.
These areas are also benefiting from significant redevelopment. Crossrail is encouraging developers to delve into developments around Tottenham Court Road, where there will be a new station, while PMB Holdings is looking to revamp Berwick Street Market in Soho, and parts of the former Barkers department store in Kensington could also be developed. Menswear retailers such as Wolsey and Jack Spade have already signed up for stores at the lower end of Regent Street.
Director of Central London retail at Savills, Anthony Selwyn, said: “International demand for Regent, Oxford, Sloane and Bond Street has rightly stolen the headlines recently with several high rent and premium deals.
“Landlords and developers are capitalising on this and creating new opportunities where possible and also investing in areas just off prime which may not have been on the horizon for retailers a few years ago.”
Selwyn further added: “We predict some of these areas in Mayfair and Soho could see rental growth of between 30pc to 50pc in the short to medium term.”
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