While the emphasis has been on bringing back ailing High Streets to be more of the traditional focal point of our towns and cities by making them much more attractive for shoppers, there are also the important investment issues that will take some time to resolve in the face of fallen prime Zone A rents.
In Newcastle the Zone A rent has fallen from a bullish £320 per sq ft in 2006 to today’s level of £250 and even that could be challenged by further declines if confidence does not return to the region’s shoppers.
Investors, used to 25-year leases on an upwards only rent review basis, must be wringing their hands in despair.
Unpleasant as this is, prime locations could see opportunities for private investors to move in and also non-prime retailers able to deal at lower rents and on shorter leases so that they can move into empty property.
In both the cases of the investor and retailer, they will bring business skills honed on making their businesses work.
The revival of shopping High Streets is not just down to investors and retailers but to an all encompassing strategy of making them accessible, with a broad range of offer as a result of local and national retailer presence and environmental attractiveness which all combine to increase dwell-time.
This in turn will bring life back to High Streets and, consequently, increase demand for space and start to drive rents back up.
The NE1 Business Improvement District initiative in central Newcastle is to be applauded. The ‘live after five’ campaign by removing car parking charges after 5pm has transformed the performance of city centre retail against national trends.
Data issued by NE1 shows that since the launch, the value of Alive after Five hours have been estimated at £157 million and have helped attract over 2 million extra visitors to Eldon Square alone after 5pm.
The Alive after Five hours now account for 16.8% of the day’s footfall, with footfall on Northumberland Street up by 5.5% year on year in contrast to the national average downturn of -3%.
The initiative is unique in the UK due to the package of support that was devised to accompany the extended retail opening.
In addition to the extended retail opening hours, Alive after Five is supported by free car parking after 5pm Monday to Saturday in the 7 council owned multi-storeys – which provides thousands of free car parking spaces in the city, together with a dedicated, high profile marketing campaign and on-going offers and meal deals in bars and restaurants.
Now this is real action and the first positive, pro-active, steps to a better city centre, both better for retailers and investors.
Greg Davison is an associate, investment, at Knight Frank