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News - 7 May 2012
Retail rents hardly shift despite dire economy
Over the past five years retailers have had to contend with a double dip recession, eurozone crisis, plummeting consumer confidence and the rapacious growth of online shopping, but landlords have taken none of these things into account, with rent rates barely moving in that period.
According to the latest figures from research firm IPD, annualised rental values declined by an average of 1.1% over the past five years, from the market peak in December 2008. Only slightly better, rents have declined by 2.6% on an annualised basis over the shorter period of three years to December 2011.
Jones Lang LaSalle says 25% of shop leases are due to expire by 2013 and 50% by 2015.
BUSINESS FORUM COMMENT
At least part of the problem rests with retailers themselves. When rent reviews become due too few commission the services of a commercial surveyor to represent them and consequently are at the mercy of their landlords. Ironically as times become tight, they are often even more reluctant to pay a few hundred pounds to a surveyor when it could save them thousands of pounds over the review period and ultimately even save them from going out of business.
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