The latest Midsummer Retail Report (MSRR) from real estate advisor Colliers International shows a surge in retail activity in Cardiff city centre, with units in the St David Centre have undergone redevelopment to house major brands such as Michael Kors and Victoria’s Secret.
The success story has extended from shops to restaurants, the report adds, with Cardiff enjoying burgeoning demand from restaurants including Shake Shack.
As a result, the amount of unoccupied prime floor space has decreased from 3.8% to 3.2%, even though prime vacancy by units has increased slightly.
Nick Turk, retail director at Colliers International, said: “Cardiff has had a positive retail year. In the St David’s Centre H&M have moved and expanded into 45,000 sq ft of previously vacant space.
“This allowed the ubiquitous Victoria Secrets to take a 10,000 sq ft unit and Michael Kors to open next door as well. Also Colliers acquired the, first city centre, 3 brand shop for Currys PC World Carphone Warehouse and burger bar Shake Shack have opened their first unit outside London.
On Queen Street, Primark have moved and Matalan have gone into their old store. During the year Queen Street recovered to £220 Zone A from £150 in 2012 – however they have not yet reached the pre-recession levels of £300 Zone A.
“Lush are rumoured to be taking the old M & Co unit as a new concept store. New River Retail have purchased the Capitol Centre and we understand they plan to create and Food & Beverage leisure hub – the future of this secondary scheme is not A1 retail.”
Mr Turk added that Cardiff’s retail success story is reflected in the decrease in unoccupied prime floor space from 3.8% to 3.2%, even though prime vacancy by units has increased slightly.
“This appears to confirm recent moves to larger units, given that prime vacancy by units has increased slightly,” he said.
“We are continuing to see an evolution in the retail sector, with the growth of a combined retail and leisure offer for consumers.
“It is clear that this combined approach is essential to regenerate struggling shopping areas at a time of increasing long-term voids in retail units.”
The Colliers International Midsummer Retail Report (MSRR) is the most comprehensive annual review of the UK shopping scene and monitors rents and empty shops across the country. Of the 421 locations tracked by the research – 57 of which are in the South West and South Wales – rents in 78 per cent remained stable in the year to the end of April while they rose in another 17 per cent.
This year’s report is entitled ‘Building the New Machine’, and examines how UK retailing and the commercial property sector which supports it are responding to the radically altered shopping landscape.
Mr Turk noted that in the 12 months to April 2016, Wales saw a second consecutive year of stabilisation in 21 tracked centres, with 20 of the locations recording no change in rents from 2015. Only Rhyl saw rents fall from last year, with Prime Zone A rents declining from £40 per sq ft to £35 per sq ft.
He said towns in the shadow of cities like Cardiff would struggle if all they could offer is “smaller and poorer” than the competition.
“A town like Newport has grasped the nettle with the development of Friars Walk – a brave development,” he said.
“In other towns fragmented ownership as well as the potential loss of income from business rates during development means that land owners – normally local authorities – can’t afford to be bold.”
He concluded: “The ‘New Machine’ for smaller towns will probably see a reduced retail offering, with leisure replacing the secondary retail and more residential development – or student accommodation in larger towns.
“These smaller towns need to provide free car parking – more loss of income – as well as an independent vibe which makes them attractive when compared to regional centres.”