Latest research from global real estate advisor, Colliers International, has revealed that the restaurant market has cooled significantly in the Yorkshire and Humberside region as operators are becoming increasingly more cautious, particularly around central prime pitches, according to its annual Midsummer Retail Report 2017.
The Colliers report, explores the issues affecting the retail sector and provides an analysis of forecasting and trends both in and out of town.
Tom Cullen, Director, Retail Agency North, in Colliers International’s Leeds office, said: “For the past few years, the food and beverage (F&B) sector has bolstered transactions the retail industry, but it is no longer the solid driver that it once was. We are seeing less demand for super prime restaurant units paying £175,000 pa or more for 3,000-3,500 sq ft. Only the very best pitches or restaurant units costing £100,000-£120,000 pa to rent are seeing any significant demand. Carluccios on St Helen’s Square in York was the last super prime restaurant deal to open in the region in 2016.
“The market modus operandi has changed; where once operators would be confident in taking out 25 year leases, more and more are now negotiating five-year break clauses into their contracts to future-proof their business.”
However, despite this negative news, the report also demonstrates that the F&B offering within leisure parks and shopping centres have proven to be more resilient than the high street, as they have ‘round the clock’ footfall. Confidence in this type of retail unit is demonstrated at the White Rose Shopping Centre in Leeds which will open a 65,000 sq ft food and leisure extension while The Moor in Sheffield has recently delivered phase two of the development including Primark, retailers, restaurants and a cinema.
Moreover, the retail market as a whole remains strong for the most part. Across the region, there has only been a marginal decline in rental growth of -0.6 per cent since 2016. The region has seen the most stability year-on-year, with 86 per cent of locations recording stable rents, vs. 70 per cent nationally.
Greg Styles, Head of Retail Development for Colliers International, explains: “During the past year, there has been a push towards flagship deals by bigger retailers in cities across the Yorkshire and Humberside regions. More than 500,000 sq ft of shopping centre space opened in Yorkshire and Humberside in 2016, and a further 1.5 million sq ft is expected to open over the next five years.
“There is also a further 600,000 sq ft of retail warehousing space being added to Leeds and Sheffield over the next three years, including new schemes at Thorpe Park and Armley Park; and additional space at Monks Cross Shopping Park.”