Total central London retail investment in Q4 2020 reached £475 mln (€543 mln), more than double the total volume in Q4 2019 which saw £200 mln transacted, according to the latest research from global real estate advisor, CBRE.
Activity in Q4 2020 accounted for 55% of all central London retail investment transactions in 2020, which totalled £860 mln, a decrease of 25% compared to 2019 as a result of the pandemic. This flurry of activity in the final quarter was driven by the availability of quality retail assets of a significant lot size coming to the market for the first since the start of the pandemic.
The current lockdown restrictions had a direct impact on footfall figures across both central London and further afield, particularly in locations that rely on workforce and tourism spend. However, there were some prime locations that saw new leases agreed in Q4.
Regent Street benefited from Free People’s lease of the former Karen Millen site, which will be the brand’s new UK flagship store. Other lettings include Claudie Pierlot, Moose Knuckles, Colourful Standard, The Abstract Bee and Peregrine, the latter three all being the first standalone stores for these brands, signalling interest from newcomers.
Phil Cann, executive director, head of UK Retail Investment at CBRE said: ‘The investment activity we saw in Q4 demonstrates the pent-up demand that exists for prime assets and particular activity in the value-add space. We have also seen increased interest in opportunities close to transport hubs as major infrastructure projects near completion, a trend we expect to continue throughout 2021.’
Luke Holland, senior director, head of Central London retail investor services at CBRE commented: ‘We have seen retailers adapting in various ways to help drive footfall, particularly those in neighbourhood locations. Central London offers strong long-term fundamentals and will therefore remain an attractive location for retailers moving forward.’
