Investment and development boosts retail rents in Birmingham

Emel Ahmet, associate director for retail agency Midlands in Colliers International’s Birmingham office, said, “Birmingham has witnessed a 4% increase in Prime Zone A retail rental growth, compared to 0.2% regionally and 0.8% nationally (excluding London), with Prime Zone A rents in the city now at £295 per sq ft, up from £285 per sq ft in 2016.

“The picture across the Midlands is a little more varied; Following stable retail rents in 2016, Merry Hill witnessed a 5% rise in rents year-on-year and Stratford-upon-Avon saw a 4% increase, whereas average prime rents have decreased in four locations in Shrewsbury, Halesowen, Redditch and Walsall.

“We expect that further infrastructure investment will encourage yet more regeneration initiatives, which will add value for investors and traders alike over the next decade. However, this will mainly benefit areas which have witnessed the greatest decline since the financial crisis, rather than established shopping centres and prime locations.”

The global real estate advisor’s landmark Midsummer Retail Report gives authoritative ‎perspectives across the UK shopping scene by looking at the trends and innovations which are shaping the country's retail sector and its property market and some other highlights include:

· There is just under 500,000 sq ft of shopping centre development in the pipeline for the West Midlands over the next few years, with most of this currently under construction.

· Colliers’ report demonstrates that new development does leave legacies that can have a dramatic effect on existing town centres. In Stafford for instance, the opening in autumn 2016 of LXB/Crown Estate’s Riverside Shopping Centre has greatly improved the town’s retail and leisure offer in a modern mixed-use development. However, the long-term ramifications for the existing retail on Gaolgate , Greengate Street and the Guildhall Shopping Centre will take major strategic initiatives with significant voids created as M&S, New look , Arcadia and River Island took the opportunity to relocate.

· Dominant city and shopping centres will continue to prosper, as long as investment meets the needs of occupiers and shoppers. At the Victoria Centre in Nottingham, intu shopping centre has seen the benefit of a £50m investment with strong retail performance, even though the introduction of a wider F&B offering met with mixed success. The challenge of relaunching the Broadmarsh Shopping Centre is meeting resistance in the market place with the difficult balance of diminished demand, falling rents on Listergate and a sceptical market.

· Stafford Riverside is the largest development in the region which has recently opened, bringing almost 250,000 sq ft of retail to the region through an edge of centre site including stores for Marks & Spencer, H&M, River Island and Primark.

· This year will see small redevelopment schemes open in Stratford Upon Avon (Bell Court), Sutton Coldfield (Mulberry Walk), Wolverhampton (Mander Centre) and Worcester (Cathedral Plaza).

· In the leisure market, operators are pausing for breath and retrenching across the region and nationally as the current growth cycle has reached its peak. However, within Birmingham, new brands are investing in the city, with Apple opening its multi-million-pound flagship on New Street, and new entrants including Byron and Wildwood continuing the improvement of the F&B provision and transforming the street.

· The retail and leisure offer in Birmingham is set to get another boost following Hermes plans to demolish the former Central Library to make way for its £500m Paradise scheme, which follows the opening of Grand Central in 2015, Hammerson consolidated its holdings in the city centre with a £335m purchase from Birmingham City Council at the beginning of the year.