Berkshire and Cheshire ranked among retail ‘hotspots to watch’

Berkshire, Cheshire, Worcestershire, Northamptonshire and Shropshire have been predicted as future retail ‘hotspots’ to watch, according to a new report by property agent DTZ. The five counties have been identified by DTZ’s Retail Property Health Index as ‘high potential’ areas due to the fact that

they currently have higher than average vacancy rates, but are forecast to experience “above average economic growth”, which the index predicts will translate into relatively fast vacancy rate declines and subsequent retail property rental growth over the next five years.

The index, which ranks 128 counties and local authorities according to their current and future economic, socio-demographic and retail characteristics, also identified Inner London (West), Surrey, Solihull, Outer London (West and North West) and Oxfordshire as the five healthiest retail locations in the UK in five years time.

Utilising historic and forecast economic data for population, unemployment and consumer spending amongst others to identify the most and least healthy retail locations, the index predicts that Brighton and Hove and York will drop out of the top five ‘healthy’ retail locations to make way for Solihull and Outer London (West and North West).

Solihull identified as future ‘healthy’ retail location

Commenting on the findings Jonathan Rumsey, DTZ’s associate director for retail market analysis, said: "The RPHI data excludes retail parks and therefore clearly shows how the improving economic outlook and rising consumer confidence is now being reflected in a revival of the high street. In-town and shopping centre vacancy rates are falling and while this has yet to translate into retail rental growth outside of London, we fully expect to see firmer rents as the economic recovery becomes more sustained across the UK.

"Retailer requirements are also changing. Increasingly they are favouring larger units which provide greater opportunities to display stock and retain shoppers for longer through leisure or experiential areas in prime locations. Retailers are increasingly utilising smaller format stores for click and collect."

The report also adds that the North/South retail divide is set to “narrow” as the economic recovery broadens and owners and occupiers’ appetite for regional assets increase.

Richard Yorke, head of UK research at DTZ, explains: "The effects of economic recovery on the retail property market is still presently concentrated in the South East which has seen growth in consumer spend and retails sales underpinning vibrant retail recovery.

“However this is changing. As the economic recovery broadens, the variance in forecast economic indicators between the regions is reducing, closing the gap between North and South."

Image: John Lewis Solihull