A report launched last week by Colliers CRE at the Palace Hotel in Manchester shows that despite the vague scent of positivity that seems to be hanging in the air, retail landlords are still somewhat in the muck. Retail rents in the North West are expected to fall by 13.1% this year and by 7.6% next year, which sounds pretty bad, altough it's pretty much in line with national trends.
The Trafford Centre is one of only two places in the region where rents are static. The £400 per sq ft Zone A has been maintained in the face of falls in every other retail location in the region, except for tiny St Annes-on-Sea on the Fylde coast. I was in the Trafford Centre on Saturday and noticed a branch of Subway has been crammed in next to the Apple store on the upper level, which initially struck me as a bit bizarre but perhaps points to the management's willingness to experiment with tenants in order to keep deals ticking over.
Colliers' Nick McAllester says landlords in the North West have realised there is no advantage in seeing units stand empty and are willing to offer "soft" deals, including turnover-based agreements, in order to draw in retailers. These, alongside lengthy incentive packages, have led to a significant decrease in net effective rents.
