The rise in Central London Retail rents shows no sign of weakening, with Oxford Street reaching a record level, producing the highest annual index increase since the late-eighties boom. Prestige locations, such as Bond Street, continue to see substantial premia payments as retailers compete to establish flagship stores. Both Scotland and Wales registered significant quarterly increases after showing high consumer confidence in a recent survey.
The strength of the Central London Office market relative to the rest of the country has become even more pronounced over the last quarter. At 11.5%, quarterly growth in Fringe City is the highest increase in this decade. This illustrates occupiers' continuing price-sensitivity relative to locational considerations. Central City quarterly growth exceeded that in the West End for the first time in twelve months. The ripple-out effect is, as yet, muted as South East rental value growth only marginally improved on the last quarter. With the first quarterly rental value increase since 1994, Scotland may finally be entering a growth phase. In inflation-adjusted terms, the sector avoided a five-year fall for the first time since 1992. As in the previous quarter, no locations in the survey experienced a fall in rental value.
The Industrial sector surpassed last quarter's seven-year high in quarterly growth, despite sterling's strength. This rental value recovery lags other sectors. The North registered a 4.9% quarterly increase, the largest regional quarterly growth since 1994. In the South East, the availability of space has dropped sufficiently for rental growth to be accompanied by longer leases. As in the Office sector, no locations experienced rental value falls over the quarter.
There has been a reappraisal of historic data. The areas affected are: All Property (May 1997) Industrial East Anglia (Feb 91 - May 97), All Office (May 97), Fringe City (May 97), Central London (May 97), London (May 97)
Rent Index - Current Prices
% Change Movement
Qtr Annual pa
Feb 97 May 97 Aug 97 May 97 Aug 96 Aug 92
-Aug 97 -Aug 97 - Aug 97
All Property 429 437 448 2.7 6.6 1.4
Shops 583 590 598 1.3 4.1 0.9
Offices 347 356 375 5.2 11.3 2.6
Industrials 347 350 354 1.1 2.7 0.1
Equity
Dividend 719 748 759 1.5 7.0 8.2
Rent Index - Inflation-Adjusted
Base (May 1977 = 100)
% Change Movement
Qtr Annual pa
Feb 97 May 97 Aug 97 May 97 Aug 96 Aug 92
-Aug 97 -Aug 97 -Aug 97
All Property 128 128 131 2.3 3.6 -1.1
Shops 173 173 175 0.8 1.1 -1.7
Offices 103 105 109 -4.3 7.8 0.0
Industrials 104 103 104 0.6 -0.2 -2.5
Equity
Dividend 214 220 222 1.0 4.2 5.5
Rent Index - Current Prices
Feb 97 May 97 Aug 97
All Shops 583 590 598
Central
London 629 656 687
Inner
Suburban
London 490 492 496
Outer
Suburban
London 519 521 526
Suburban
London 507 509 514
London 568 581 598
South East 583 587 591
South West 565 569 573
East Anglia 758 759 759
East
Midlands 474 488 488
West
Midlands 728 736 740
Wales 742 744 766
North West 581 593 607
Yorks &
Humber 493 499 501
North 586 602 602
Scotland 544 557 578
All Offices 347 356 375
West End 492 512 541
Holborn &
Marylebone 378 398 423
Central City 314 319 347
Fringe City 305 327 365
Central
London 374 385 422
Suburban
London 310 314 319
London 353 363 393
South East 350 356 363
South West 613 613 624
East Anglia 320 322 322
East
Midlands 440 440 440
West
Midlands 717 720 731
Wales 443 446 450
North
West 459 462 462
Yorks &
Humber 376 387 387
North 269 276 276
Scotland 427 427 430
All
Industrials 347 350 354
London 373 378 381
South East 410 414 419
South West 405 409 409
East
Anglia 364 364 364
East
Midlands 375 380 386
West
Midlands 380 380 380
Wales 321 321 321
North West 317 318 320
Yorks &
Humber 264 264 271
North 253 261 274
Scotland 293 300 305
% Change
Qtr Qtr Annual p.a.
Feb 97- May 97- Aug 96 - Aug 92
May 97 Aug 97 Aug 97 Aug 97
All Shops 1.3 1.3 4.1 0.9
Central
London 4.4 4.6 19.3 8.0
Inner
Suburban
London 0.4 0.9 3.1 0.8
Outer
Suburban
London 0.4 1.1 2.7 0.1
Suburban
London 0.4 1.0 2.8 0.3
London 2.3 2.8 10.3 3.6
South East 0.7 0.6 1.6 -0.4
South West 0.7 0.7 1.6 -0.3
East Anglia 0.1 0.0 2.1 1.0
East
Midlands 2.8 0.0 4.0 -0.3
West
Midlands 1.1 0.5 1.8 -0.2
Wales 0.2 3.0 3.4 0.3
North West 2.1 2.3 5.4 3.5
Yorks &
Humber 1.2 0.3 2.5 0.1
North 2.8 0.0 3.5 1.6
Scotland 2.3 3.9 9.7 3.8
All Offices 2.6 5.2 11.3 2.6
West End 4.0 5.7 15.8 5.4
Holborn &
Marylebone 5.2 6.3 17.9 2.8
Central City 1.6 8.8 13.8 3.9
Fringe City 7.5 11.5 26.4 2.2
Central
London 3.0 9.5 17.8 4.2
Suburban
London 1.3 1.8 5.5 0.3
London 2.7 8.3 15.7 3.4
South East 1.7 1.8 6.0 0.9
South West 0.0 1.8 1.8 -0.7
East Anglia 0.6 0.0 1.8 -2.6
East
Midlands 0.0 0.0 0.0 4.0
West
Midlands 0.4 1.6 3.8 0.1
Wales 0.8 0.8 3.3 1.8
North
West 0.6 0.0 1.5 1.7
Yorks &
Humber 2.8 0.0 4.0 2.3
North 2.5 0.0 2.5 2.4
Scotland 0.0 0.5 0.1 -1.2
All
Industrials 0.9 1.1 2.7 0.1
London 1.2 0.9 2.7 -0.6
South East 0.8 1.3 3.1 -0.3
South West 0.9 0.0 2.7 0.5
East
Anglia 0.0 0.0 0.0 -2.5
East
Midlands 1.5 1.5 1.7 -0.4
West
Midlands 0.0 0.0 1.8 2.8
Wales 0.0 0.0 0.0 2.8
North West 0.3 0.7 1.0 -0.3
Yorks &
Humber 0.2 2.5 3.2 1.5
North 3.2 4.9 8.3 3.8
Scotland 2.5 1.6 4.3 3.5
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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