Property investors searching for a safe bet in the retail market should look no further than London’s suburban shopping centres, according to research.
Suburban shopping centres on the outskirts of the capital dominated the top 10 list of the safest investment areas in the BNP Paribas Real Estate rankings.
The rankings, which do not take into account central London areas, found Lewisham to be the least-risky area for property investors in the country. The south London area was followed by Wood Green, Uxbridge and Harrow, while Sutton was also featured in the top 10.
Greater London is ranked significantly higher than the other regions of the UK, the report said.
Many people living on the outskirts of London appear to be happy in their local surroundings. The report found more than half of Londoners do not leave their local area on a daily basis and so shopping is fundamental to their local community.
BNP Paribas head of research Claire Higgins believes people looking to pop out to buy a couple of items from their local store are helping suburban shopping centres in London prosper.
Higgins said: “What the research is saying is that Greater London suburban centres which are providing services to local communities are performing well. Many Londoners – around half, in fact – don’t leave their local area every day, so these retailers are providing all kinds of shopping, including top-up shopping. It makes retailers in these centres healthier.”
Many of the London retail areas to perform well may have been assisted by the comparatively affluent customers they serve, Higgins believes.
“It is partly due to the fact Londoners are more affluent and one of the things to come out of the research is that successful retailers correlate with affluence,” said Higgins. “Providing the sort of retailing that is appropriate to these communities, whether that’s top-up shoppers buying a pint of milk and a newspaper or a fuller service, they have a better appeal.”
Higgins added that London was operating differently to the rest of the UK because its economy on the whole is stronger, so the retail sector within it is performing well.
The report was not as positive for towns in other regions of the UK, with Bradford, Derby and Southampton listed among the locations likely to be hit hardest by further retailer failures. Wolverhampton and Hull were also listed among the most at-risk areas.