EconomyHigh StreetPropertyShopping Centres

Retail rents fall as pressure on sector continues

High street shop prime rents fell by 1% in the first quarter of the year, according to real estate company CBRE’s latest Prime Rent and Yield Monitor.

This indicated an acceleration of the falls reported in Q3 (0.4%) and Q4 (0.4%) of 2018. Shopping centre prime rents fell 1.3% over the quarter, while retail warehouse prime rents decreased 1%.

The retail sector pulled down the commercial property market rental prices as
as a whole, UK prime commercial property rental values increased 0.1% in Q1 2019, matching Q4 2018 as the slowest growth since Q3 2012.

The industrial sector saw its ninth consecutive month of outperformance with prime rental values increasing 1% while office prime rents increased 0.6%.

Robin Honeyman, research analyst at CBRE UK, said: “Falls in the retail sector pulled down the all property results in Q1 2019, despite the relative strength of office and industrial performance. Our prime rent and yield data continues to show prime retail coming under pressure, both in pricing and rental values.”

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