London retail powers ahead despite riots and economic headwinds

"Retail in the capital continues to defy the serious economic problems being seen in the wider UK and globally. Some suburban locations such as Hackney, Haringey and Croydon were badly affected by the August riots, but in Central London it was largely business as usual," said Ian Barbour, Head of Retail Leasing at Knight Frank.
 
Indeed, rental growth has continued in many of the key locations, with record levels being set in a number of streets such as Bond Street, Oxford Street, Regent Street and Covent Garden.

"International retailers continue to drive demand in these major thoroughfares and, with limited space available, rents are still under upward pressure," said Darren Yates, Partner in Knight Frank’s Research team.

"Our latest survey of retail availability in Central London showed that some locations had virtually zero availability – which is clearly putting added pressure on rents."
 
The strength of the occupational sector has also boosted the investment property market, which continues to see strong demand from wealthy private investors for single shops in premier streets such as Bond Street, in addition to interest from the larger established London landlords seeking to complement or consolidate their existing estates.

"This interest is keeping yields at historically low levels," said James McCluskey from Knight Frank’s West End Investment team, "although some of these private buyers are looking more at wealth preservation rather than performance."
 
The big news of recent weeks has been the opening of Westfield’s Stratford shopping centre in East London, which had an occupancy rate of almost 100%.

"This scheme is Europe’s largest urban shopping centre and will provide a massive boost to the local area. It also has a significant hotel, catering and leisure offering which will further enhance its critical mass as a destination," said Barbour.

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