Savills : The regional opportunity on the high street

The retail industry has been undergoing structural challenges for a number of years now which has only been accelerated by the impact of Covid-19.

Before the pandemic hit, we were seeing increasing interest from new international brands and strong regional brands looking to expand their footprint within the country. We're now seeing many established brands failing on the high street, increasing vacancy rates and falling rental levels. Many of these sites remain fitted, occupy prime positions within town and city centres and provide a unique opportunity that a number of new brands have already captured in the Yorkshire region and across the UK.

Strong UK brands that continue to trade well are also capitalising on fitted space becoming available, allowing brands to acquire stores relatively quickly and align with successful household names while also building their own brand awareness in prominent locations that previously might not have had any vacancies or been too expensive.

SD - The Home of Menswear, for example, has expanded to new locations in major northern cities including Leicester, Newcastle and Birmingham with further stores in the pipeline. In Birmingham, its store on New Street sits within the 100 per cent prime pitch adjacent to Apple and Watches of Switzerland, just outside Grand Central. In Newcastle, it is located at the MetroCentre on the upper Platinum Mall adjacent to Kuoni and opposite Tessuti. And in Leicester, SD - The Home of Menswear has opened a new shop at the Highcross shopping centre adjacent to major fashion retailers Next and Superdry. These three stores were formally occupied by Gstar, Warehouse and Oasis and SD - The Home of Menswear is keen to acquire further well-fitted stores throughout the country.

The evolution of retail has seen an adjustment in landlord aspirations, as they continue to seek and maintain a vibrant mix of tenants on their schemes. They are now more willing to share risks with exciting brands and consider turnover-based rents and more flexible leases, which are typically more common in Europe and overseas.

This has created a more comfortable environment for international brands to enter the UK on lease terms which are more familiar from other territories. These international brands are attracted to the considerable potential of the UK market with average household spending in the UK of £585.60 per week.

We've seen new international brands such as Wendy's, Rocket Padel, Hai Di Lao, Wingstop and Rains taking this opportunity to enter the UK market and move into prime retail properties.

While the news may focus on the national retailers rationalising their portfolios or brands going into administration, for many domestic and international brands this presents a unique opportunity to set themselves up in prime locations and benefit from our evolving cities and town centres in the long-term.

Further information

Contact Josh Howe

Contact Savills Retail