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
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