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Activity in the sector has broadened, with new entrants and existing tenants active in market.
The retail market continues to show signs of stabilisation in prime locations, with steady demand and letting activity, and a reduction in vacancy. Activity in the sector has broadened, with new entrants and existing tenants looking for units. Some retailers are reporting stabilisation in trade levels, and consumer sentiment has improved significantly in the last 12 months.
Hannah Dwyer, Head of Research said that “There has been an uplift in activity on prime high streets and in prime shopping centres in the last 6 months with a number of high profile lettings. We have started to see a number of retailers who have been inactive for the last few years, returning to the letting market and are being attracted to relocate and / or expand by the reduced rental values currently available. The increased demand has caused vacancy in prime locations to decrease, and in the short-term may cause slight rental increases for prime units”.
Activity and sentiment in the sector remain divided however, with a widening gap between prime and secondary product. Retail warehouse parks continue to be faced with challenges, with very limited demand and activity. The news of troubled retailers continues, with Barratts Shoes entering examinership at the beginning of November, and A|wear being placed into receivership.
Stephen Murray, Director of Retail Agency said that: “Many of those retailers who have expanded selectively over the last year or so have started to see new store revenues ahead of budget. This is giving greater confidence to continue targeted roll out of new store openings. The outlook is one of greater depth of interest and competition for the prime opportunities nationwide. This has already speeded up the letting process, with some reduction in incentives and is beginning to support modest rental increases. Conversely, secondary or tertiary centres that have not adjusted to match their offer to catchment are struggling to maintain both occupancy and rental levels”.
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