Leeds, 6th June 2011
– Retail rents in Leeds are starting to recover after spending three years in the doldrums since the start of the economic crisis, according to new research by property consultants Jones Lang LaSalle
A series of new lettings show a marked improvement in retail rents achieved since they almost halved with the start of the credit crunch in 2008, says Jones Lang LaSalle’s Leeds-based In-Town Retail team.
Retail rents in prime areas of the city soared to £300 sq ft in the last property boom years of 2006 and 2007 but key indicator deals on Briggate and Commercial Street in 2008 and 2009 achieved a far lower rate.
However the northern head of Jones Lang LaSalle In-Town Retail Team, Jonathan Newns, says that recent new lettings, including the former Envy unit to jewelry shop Pandora and the former Free Spirit unit to Costa as well as the Lypsy and Cath Kidston stores in Lands Lane, show that the Leeds market is recovering in spite of the VAT rise to 20 per cent and wider fears over the economy.
Further confirmation of this comes with a new letting to French beauty products manufacturer, L’Occittane, at the former Kookai unit, Briggate, which has achieved more than £270 a sq ft.
Jonathan Newns says: “Leeds is bucking the national trend. Demand for retail units remains strong partly because, due to the lack of new development, supply has fallen dramatically during the last 12 months.
“If you take the strong demand and the recovery in rental prices and factor-in the confidence that Land Securities has shown by starting on site with its one million sq ft Trinity scheme, it is clear that Leeds is going through a period of growth which contradicts current market conditions.”
Vacancy levels in Leeds are in single figures with virtually no availability within the prime areas and demand far outweighing supply. Newns adds: “This situation is likely to continue for the foreseeable future as retailers continue to seek representation in the region’s capital which has not been subject to the same severity of cuts as other cities.
“We are seeing more and more international brands seeking to expand in the UK and Leeds is within their top three choices for a store outside London. The Victoria Quarter remains the first-choice destination for aspirational and luxury retailers while others want to secure space within the city’s prime areas Briggate, Commercial Street and Lands Lane.”
Newns adds that, while Trinity, which will feature 120 retail units, looks likely to open in Spring 2013, Leeds retail landlords will continue to benefit from the effects of a lack of good prime space.
He adds: “All the market indicators are that the L’Occittane letting is not merely a blip and that landlords can now start to look at recovering some of the values lost through the worst of the recession. There does appear to be significant recovery in this sector.”