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South West Retail
Renaissance
Plymouth and Exeter are blazing a trail for the rest of the south west
as the region undergoes a ‘retail renaissance’, according to
a leading property expert.
Stephen Jones of King Sturge, says the south west has traditionally lived
in the shadow of other parts of the UK when it comes to the quality of
shopping facilities on offer.
But he believes that has now changed and that the region can compete with
other regions in the retail stakes – with Plymouth and Exeter leading
the way ahead of the likes of Bristol and Bath.
“For too long, the south west has been the UK’s poor relation
for shopping in comparison to London, Manchester, Leeds and Birmingham,”
comments Mr Jones.
“Now this is increasingly no longer the case as our region enjoys
a retail renaissance, providing facilities on a par with our UK competitors.
And what is most interesting is that it is Plymouth and Exeter which are
leading the way.
Drake Circus in Plymouth has attracted 16.2 million visitors in its first
year and is a key part of the city’s ongoing regeneration. Now we
have Princesshay in Exeter, a city which, ironically, had previously been
singled out as a particularly bad example of ‘clone town’ Britain.
This concept has always been disputed but in any event, the issue had
been addressed and Princesshay, with its cathedral views and striking
architecture, is a superb environment.
Existing big name stores including Next and New Look have been improved,
while new names such as Zara, Apple and the regions largest Fat Face Store,
have also arrived. Just as important, a distinct area has been earmarked
within Princesshay for smaller independent traders.”
Stephen said the south west’s retail revival was now moving up the
M5 to Bristol, where the £500m Cabot Circus scheme is due to open
next summer. Then in 2009, the £350m SouthGate development will
transform the centre of Bath.
“The aim of all four of these new schemes is to provide a complete
leisure experience which will attract today’s increasingly sophisticated
shopper into our town and city centres – as opposed to staying at
home to shop online, or else heading to the local supermarket.” said
Stephen.
“Of course the British love to shop, but that in itself is no longer
enough. And here in the south west, landlords are responding by creating
an environment where people can spend an entire day if they want to –
not just shopping, but also eating out and enjoying a trip to the cinema.”
According to the latest survey by CB Richard Ellis, Bristol has retained its position as one of the top 20 most expensive places in the world to rent prime offices.
The semi-annual report, Global Market Rents survey, also finds that London’s West end, Mumbai, the City of London and Moscow are the top four most expensive office markets in the world. The report tracks the world’s most expensive markets as well as markets with the fastest growing rents over the past 12 months.
Of the 171 office markets monitored, 85% saw rents rise in the 12 months ended September 30, 2007.
In Bristol, average office occupation costs (based on rent plus local taxes and service charges) have gone up to £41.00 psf – up from £36.50 this time last year. This puts the city’s office occupation costs above that of Glasgow, Leeds and Liverpool but not as high as Dublin, Birmingham and Edinburgh.
“The continued growth of Bristol’s rental prices reflects the strength of the city’s prime office market,” commented David Skinner, CB Richard Ellis south west chairman. “We are anticipating this year to be a record year. If one or two deals tip the right side of the line at the year end then the take up is predicted to be close to 900,000 sq ft in the city centre – compared to an average take up for the last five years of 625,000 sq ft pa.”
Warning to Commercial Landlords
People selling commercial property are being urged to speed up the sale process in advance of changes to Capital Gains Tax in April 2008. That’s the view of Tony Moorby, director of taxation at PKF Accountants and business advisers, who says that as the 5 April deadline approaches when the effective rate of Capital Gains Tax rises from 10% to 18% on some properties, buyers are highly likely to negotiate prices down.
“The nearer you get to the deadline the more likely it is that purchasers will hold sellers over a barrel and try to do a last-minute cut-price deal,” he said. For example, landlords letting commercial property to qualifying trading companies can currently pay tax at an effective rate of 10% if they acquired it after 5 April 2000. This will increase to 18% after 5 April under new proposals.
The savings could be even greater where landlords owned the property before 1998, as they are currently able to claim an inflationary increase to their costs, known as indexation. This is to be abolished after 5 April. “My best advice is, ensure you have the right support from your tax advisers and legal advisers”.