The Scottish retail sector remains “in a fragile state” despite rents showing signs of strengthening, according to a new report published today.
Around 70% of large retail centres across the country have managed to keep shop rental rates at a stable level, but average rents are down 23% from 2008, property company Colliers International found from its 18th Midsummer Retail Report.
“Any sign of an improvement in the hard-hit retail sector is good news. However, these are very small changes and have, in part, been helped by tenants requiring marginally less incentives, such as rent free periods, to commit to deals,” said Tom Johnston, director and head of retail with Colliers International in Scotland.
“In the meantime, Scotland’s retail sector as a whole remains in a fragile state. A strong retail sector is important to the economic well-being of Scotland and we must look at innovative new ways to encourage retailers and shoppers back into city and town centres.”
Across the UK, with the exception of Wales, where rents dropped 9.1%, prime rents increased by 1.8% over the last 12 months, boosted by a rise of 11.6% in Central London.
Colliers International head of research and forecasting Mark Charlton commented: “Rents in Scottish towns and cities are stabilising, with the historic rental trend following a very similar trajectory to that of the rest of Great Britain, excluding London.
“While economic recovery has lagged a little, unemployment is falling (6.4% in March) and GDP growth is gaining momentum, with the forward looking Purchasing Managers’ Indexes also modestly positive for Scotland. We can look forward to seeing the return of rental growth to the stronger, dominant retail centres.”