30% of all retail stock is now redundant – Jones Lang LaSalle

In its first annual property forecast since its merger with King Sturge it warned that the only in-town locations not to undergo decline would be central London and the top 20 regional destinations.

JLL calculates that 30 per cent of all retail stock is now redundant and needs to be recycled. But on a positive note this will present opportunities for food stores, cinemas and residential to come back into the town centre.

According to JLL research, 50 per cent of all retail leases are set to expire between now and 2015, with half of those expiring in 2012 and 2013. This includes some major chunks of retail real estate including schemes such as Hammerson’s West Quay in Southampton. Some retailers like Arcadia have already signalled their intention not to renew leases. And according to Grainger retailers like Dixons are only renewing if they can negotiate a flexible deal with the landlord, often involving a £1 headline rent with a turnover top-up.

Secondary locations are most at risk, according to JLL, and often landlords’ concessions are not enough to convince retailers to stay. Because rateable values have not been revealed since 2008, in many towns rates payable now exceed the rent on a new letting.

But out-of-town the picture is brighter, and JLL forecast a surge in development activity as landlords redevelop second-generation retail parks built in the 1980s with new units to captalise on strong demand from high street retailers such as John Lewis, Marks & Spencers and Debenhams.

My retail media

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