Average prime retail rents across the capital will be flat during the next 12 months, according to research by Colliers International.
London has seen double-digit rent increases in recent years. However, rents have only moved up by three per cent year-on-year.
Colliers estimates that on Bond Street – one of the world’s most prime shopping locations – around 25 shop leases are being quietly marketed by the brands.
Paul Souber, Colliers’ head of central London retail agency, said: “London is still a phenomenally strong shopping environment but the market has cooled.
“The more positive news is that the capital is still creating new flourishing pitches.
“The shopping offer on Tottenham Court Road is being transformed and we’ve seen top rents on the street increase by 7.5 per cent – more than double the London average,” Souber added.
Nationally, UK prime retail rents are up 1.8 per cent year-on-year, the best increase since 2008.
Meanwhile, prime shop vacancy is down 0.2 per cent, the first nationwide improvement since 2014.
Colliers’ head of UK retail, Mark Phillipson, said: “The proportion of the 420 locations we monitor which saw rents fall more than doubled, while the volume of shops that have been vacant for more than a year increased by 20 per cent.
“Both these measures had been previously improving during the past two years, and this reverse signals a step-change which is widening the gulf between the best and the rest,” Phillipson added.
The report also found that around 85 per cent of the former BHS stores within the M25 have found new occupiers but this figure falls to around 30 per cent in the rest of the country.
It also found that there has been a cooling demand from restaurants, bars and other eating and drinking offers who have driven so much of demand for space over the past three years.