Publication

UK Shopping Centre and High Street Bulletin Q1 2016

Research Article

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Average retail rents will rise gently over the next five years

Summary

■ The EU referendum debate is starting to drag on consumer confidence. At the moment it is hard to tell whether it was this, or the early Easter, that have impacted retail sales. However, if other political campaign periods are anything to go by, there may be an uptick in spending on leisure as people get bored of the debate.

■ Occupational demand is generally more positive than negative, with rising levels of requirements from food, A3, and value retailers in particular.

■ The Brexit debate is definitely weighing on investor confidence in the shopping centre market. A 'remain' result will definitely lead to a surge of activity in the second half of the year. However, even with this, the 2016 investment volume is unlikely to hit average levels.

■ The high street retail investment market has remained more resilient in the face of the referendum debate. This is probably because of its comparatively lower dependence on institutional investors. Over the rest of 2016 we expect prime yields to remain low, and secondary yields to soften slightly.

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