Soho, Tottenham Court Road, Kensington High Street and Lower Regents Street could see rents rise by up to 50% in the next few years, new research has revealed.
According to Savills estate agents, these shopping destinations stand to benefit because of the knock-on effect caused by astronomically high – and rising – rents in the main West London retail destinations, such as Oxford Street and Bond Street.
Rents on Bond Street are now the highest in Europe and among the highest in the world, forcing many retailers to seek out neighbouring locations.
Footlocker recently agreed to pay £800 per sq ft at its Oxford Street store, while Swiss luxury jeweller Boghossian will pay a record £1,050 per sq ft on Bond Street. This has happened even as a spate of traditional retailers, including HMV and Republic, have gone into administration leaving their stores empty.
“International demand for Regent, Oxford, Sloane and Bond Street has rightly stolen the headlines recently with several high rent and premium deals,” Savills director of Central London retail Anthony Selwyn said.
“Landlords and developers are capitalising on this and creating new opportunities where possible and also investing in areas just off prime which may not have been on the horizon for retailers a few years ago.
“We predict some of these areas in Mayfair and Soho could see rental growth of between 30pc to 50pc in the short to medium term,” he added.
Improving transport links are also assisting the shift, with the opening of Crossrail in 2018 expected to benefit previously fringe shopping areas.