Vickery Holman report reveals Plymouth shop rents fall as city centre retail goes through major change
SHOP rents in the lower end of the city centre's New George Street have fallen from £100 per square foot to just £35 in five years, a major commercial property firm has revealed.
The attention-grabbing figure was highlighted during presentations accompanying the release of Vickery Holman's The Market 2012-13, a review of last year in the commercial property sector and also containing predictions for the next 12 months.
The presentation, at Coxside's National Marine Aquarium, revealed the rental figures, for "zone A" square-footage, at the front of a shop, has dropped in the west end from the height of the market in 2008 to this year.
It reflects the huge change in the retail sector, which has seen Plymouth stores close, as evidenced by the recent loss of the national Jessops and Comet chains, the administration of HMV and what Vickery Holman describes as the "contraction" of the prime retailing area to the eastern end of the city centre, site of Drake Circus mall.
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Cornwall Street has seen a west end rental decline of £60 to £30 per square foot, for zone A, in the same time frame.
The presentation, attended by about 100 Plymouth property sector professionals, heard how the lower end of the city centre's main retail area is also still affected by large vacant stores, particularly the former Woolworths, Derrys and TJ Hughes outlets.
However, lower rents and vacant stores do present opportunities for new retailers to move in and trade at "economic levels".
Vickery Holman associate Ashleigh Phillips, speaking to The Herald after his presentation, said: "We have seen the sharpest declines in value in the west end of New George Street.
"This is not solely due to the closure of Derry's, but more the cumulative effect of the three large vacant buildings and the relocation of multiples to the Drake Circus end and its surrounds.
"But the upside is these rents are now affordable. At £30 to £40 per square foot for Zone A, we expect void levels to be low and the fact that the Plymouth Community Homes and Plymouth City Council stock is currently particularly well let demonstrates this."
He said the retail sector is now undergoing change and added: "It's now about an experience. It's no good retailers putting stuff on shelf and expecting people to come in.
"You have to offer people a reason to come.
"Retailers, their landlords, the local authority and town centre managers need to focus on shopping, providing an 'experience'.
"A failure to adapt by all the relevant stakeholders will see further casualties caused by the growth in online retailing and the general economic conditions."
However, rents are just one of the factors affecting the shopping area, with high levels of business rates very influential too in driving down rental levels, he said.
The city's retail landscape was just one of the property sectors highlighted in the presentation and the report.
There were also reports on industrial, office and leisure properties.