Plymouth identified as one of the retail success stories of SW

Plymouth has been identified as one of the success stories of the South West in adapting to the changing demands of modern consumers.

The town is one of just three out of 36 key locations in the region to enjoy retail rental growth during the 12 months to April 2016, according to the latest Midsummer Retail Report (MSRR) from real estate advisor Colliers International.

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.

Nick Turk, retail director at Colliers International, said: “Plymouth is a good example of what we mean by the ‘New Machine’ – rents in and around Drake Circus have increased whereas what was previously a good retail pitch along New George Street is now only achieving rents at 50% of prime.

“Bookending the main retail area are two mixed use schemes - the new BL bus station scheme with a cinema and 14 restaurants and the old Derry’s department store with 500 student rooms and a 100 bed hotel. Colliers are acting for Thames Bank on the ground floor units here and are talking to a number of A3 and gym operators.

“Therefore poorer or redundant retail is being removed from the picture and replaced with mixed use schemes, responding to demand for centrally-placed student living, budget hotels, gyms and the continuing increase in eating out – especially amongst the under 35 year olds. It also tells us that only the best department stores work in the face of market leader John Lewis – not forgetting the biggest department store: the Internet.”

Plymouth has built upon its success last year, when it was the only location in the region to see retail rental growth, while 97 per cent of the centres experienced no growth or decline. The only other places to experience growth in 2016 have been Gloucester and Cirencester.

In addition, the number of empty retail units in Plymouth city centre decreased significantly between our April 2015 and April 2016 surveys, dropping from 12.5% to 8.6% of units driven by a significant improvement on secondary pitches.

The Colliers report also focused upon the fact that further significant retail development scheduled to take place in Plymouth, with bulky goods schemes planned for Plymouth Gateway Retail Park in 2017 and a 100k sq ft leisure extension to Drake Circus, Plymouth, expected to launch in 2018.

The Midsummer Retail Report (MSRR) – which had its official South West launch at Showcase Cinema de Lux in Bristol - 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.

He added that research by had Colliers identified a number of trends which were leading to a steady rise in the retail out-of-town sector.

“Increasingly, operators see retail park stores in the same space as the rest of their portfolio, as high-street brands have moved heavily into the out-of-town sector. This is on the back of landlords gradually widening planning restrictions on parks to allow non-bulky users,” he said.

“Finally retail warehousing developments on the edge of city centre sites and greater leisure provision on these parks are challenging the concept of retail warehousing as being ‘out-of-town’ – often with a detrimental effect on town centres.”

He said this blurring of the boundary had resulted in increasing demand as more retailers considered retail parks as a viable extension of their portfolio, while at the same time customers have appreciated the benefits of shopping out-of-town shopping - resulting in rising footfall in retail parks over the last two years which is in contrast to both shopping centres and the high street.

“Retail warehousing has weathered the effect of on-line retailing as a result of low fuel prices, the suitability of retail warehousing to Click and Collect and the greater diversity of occupiers in retail parks including restaurants.

“Value retailers have continued to expand but the shortage of cheaper accommodation has slowed this expansion down. Over the last seven to eight years, these value operators absorbed many units between five and 12,000 sq. ft. whereas Homeware brands such as

Plymouth-based The Range and Dunelm Mill occupied many of the larger voids. The number of openings in 2015 was down but still at 63, they form the biggest category of retailers taking space out of town.”