Central London retail investment doubles as fresh brands swoop on empty high street stores
Less established brands swooped on discounted central London property in the final quarter of last year, as the collapse of former high street stalwarts has prime space up for grabs.
Total central London retail investment in the fourth quarter of 2020 reached £475m, more than double the volume reported in the final three months of 2019, when transactions hit £200m.
The flurry of activity was driven by the availability of quality, large retail assets coming to the market for the first time since the beginning of the pandemic, according to real estate adviser CBRE.
Deals between October and December accounted for 55 per cent of all central London retail investment transactions last year. The total amount of investment in 2020 was £860m, a 25 per cent drop on the previous year as a result of the Covid crisis.
In the fourth quarter, US fashion brand Free People launched a London flagship site in the former Karen Millen store in Regents Street, after Boohoo bought the womenswear retailer and took it online-only.
Up-and-coming brands including Claudie Pierlot, Moose Knuckles, Colourful Standard, The Abstract Bee and Peregrine signed new central London leases last year, with the latter three launching their first standalone stores.
This signals that a physical store in a prime central London location is still crucial for newcomers looking to expand their customer base, despite the impact of the pandemic on footfall across the city centre.
Phil Cann, head of UK retail investment at CBRE, said: “The investment activity we saw in the fourth quarter demonstrates the pent-up demand that exists for prime assets and particular activity in the value-add space.
“We have also seen increased interest in opportunities close to transport hubs as major infrastructure projects near completion, a trend we expect to continue throughout 2021.”
Luke Holland, head of central London retail investor services at CBRE, added: “Central London offers strong long-term fundamentals and will therefore remain an attractive location for retailers moving forward.”