THE GAP between shop rents in the UK’s smartest and more modest locations is wider than ever and is likely to become more marked as leases come up for renewal, research exclusive to City A.M. shows.
The number of shopping areas in London that have reached or exceeded rental levels seen at the height of the bull cycle in 2007 has soared to 42 per cent, according to property firm Jones Lang LaSalle.
While rents on London’s priciest streets such as New Bond street have soared on the back of demand from wealthy overseas shoppers, 42 per cent of retail areas in London still remain below 2007 levels.
However, this contrasts with 73 per cent across the UK overall, with only 11 per cent of stores seeing rents reach pre-crash levels.
With 25 per cent of leases expiring in 2012 to 2013, JLL expects to see a further rift in rent prices.
Guy Grainger, head of UK Retail said: “Some locations will inevitably continue to slide against the backdrop of challenging market conditions, but retail locations with a raison d’etre will continue to out-perform.”