Prime retail rents slip for embattled high street landlords

Troubles for high street landlords deepened in the first three months of 2019, as tough trading conditions and store closures pushed down rents on prime retail properties.

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Rents at prime high street shops fell one per cent in the first quarter of 2019, accelerating from 0.4 per cent drops when compared with the third and fourth quarter of last year.

Shopping centre and retail warehouse prime rents also dipped 1.3 per cent and one per cent respectively over the quarter, according to real estate giant CBRE.

"Falls in the retail sector pulled down the all property results in quarter one of 2019, despite the relative strength of office and industrial performance," said Robin Honeyman, senior research analyst at CBRE UK,

He added: "Our prime rent and yield data continues to show prime retail coming under pressure, both in pricing and rental values."

Despite the drop in retail, rental values of commercial property as a whole edged up 0.1 per cent over the quarter amid continued demand for industrial assets such as warehouses.

CBRE found that the first three months of 2019 marked the ninth consecutive quarter of "industrial outperformance", with prime rental values increasing one per cent.

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Yet it was the sector’s lowest quarterly growth in prime rents since the final quarter of 2015 as "the stellar increase of 8.3 per cent per annum over the previous three years slows to more trend levels".