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News Release

BCSC, Manchester and London

Spotlight on Retail; Jones Lang LaSalle Launches Retail Spotlight Overview


BCSC, Manchester and London, 21st September 2011 - Jones Lang LaSalle launched today Retail Spotlight, their first biannual overview on the performance of the UK retail and leisure sectors at the BCSC conference in Manchester.

Guy Grainger, Head of UK Retail at Jones Lang LaSalle said: “The UK retail market is at a cross road, particularly our high streets, which are the lifeblood of our communities. The industry needs to address the complex problem of obsolescent space and adopt new business models that meet the demands of the modern shopper. A realistic and combined approach between local authorities and effective town centre management is needed.”

Key findings of the overview include:

•         Costs are growing at a greater rate than consumer spending but this impact will differ significantly across the UK. This in turn will influence retailer’s requirements as they rationalise their portfolios which will contribute to further retail polarisation.

•         The right space for retailers will be characterised by optimum sizing and configuration, in locations that have critical mass, destination appeal and stronger than average fundamentals such as high footfall and resilient consumer spending.

•         Central London should be viewed as a completely separate market to the UK, where demand for space is high, fuelled by international retailers from Europe and the USA but also UK brands investing more in prime flagship store locations.

•         In some regional towns retail vacancy rates could reach 40% and the issue will turn from vacancy to obsolescence but key locations will stay in high demand for acquisitive retailers positioning themselves for growth.

•         Increasing vacancy rates underlines the need for the retail market to continue producing modern floor spaces, either through recycling existing stock or new development as retailers need new modern floor spaces to be more productive and improve cost bases.

•         However, some stock is never likely to be reabsorbed back into the market in tertiary locations  because it is too old, ill-configured and poorly located and is fundamentally obsolete. The onus will be finding appropriate use classes for them.

•         Proactive asset management is the key to making existing floor space  work hard and needs to follow eight key principles; optimising tenant mix, monitoring changing space requirements, managing occupier churn, maximising space use, extension and expansion, investment in infrastructure, addressing non-retail uses and scheme marketing.

Guy Grainger concluded: “2011 has been a turbulent year and there is speculation that it might end with Christmas sales starting earlier than ever. Most consumers have felt the squeeze and altered their shopping habits and this pressure will continue into Autumn. For retailers, landlords and developers to make strategic decisions it is more important than ever to be in touch with market events at ground level.”