From 2008...
"High Street rents 'to fall 20pc' over three years"
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/2791629/High-Street-rents-to-fall-20pc-over-three-years.html
From...
http://www.bis.gov.uk/ assets/ biscore/ business-sectors/ docs/ u/ 11-1402-understanding-high-street-performance.pdf
"Fig. 10 shows the performance of average town centre prime rents in England (based on
370 locations) from 2000 to 2011 in nominal and real terms (discounting for RPI).
Nominal prime rents grew steadily through to 2008 (up 26%), but then fell back
significantly in 2009 (down 12%) due to the impact of the economic recession before
declining further in 2010 and 2011, but at a much slower rate. The average prime rent for
England at mid 2011 was virtually the same as in 2003."
[Page 45]
One person's perception of economic performance generally, and on the high street, may differ from another's, and be different now from that perceived at the time of the above projection, but it is striking that the rent reductions have not been as 'drastic' as foretold.
Another aspect is this...(from the same document as the last)
"
Investor perspectives
Over the past 30 years there has been a 'homogenisation' of the high street. With high
street units owned by a myriad of landlords, there has been little or no control over the
tenant mix in town centres, apart from some restrictions placed within the 'user' clauses
of leases.
In order to obtain the best possible return on their investment, landlords let their units to
tenants with the strongest covenant, as a result this led to more and more national chains
taking prime high street locations (and indeed in purpose-built shopping centres), which in
turn led to a 'sameness' about many high streets throughout the UK.
There has also been a sense of 'brand grabbing' where institutional landlord/developers
of high street shopping centres wanted the kudos of having fashionable brands, which
might not necessarily fit the local demographic but improved the marketability of the
scheme. This also created little differentiation from other high street shopping venues
within geographical regions.
Historically, developers of retail schemes have offered anchor tenants space at a
peppercorn rent in order to use the anchor's brand to attract additional tenants. This has
created a situation where smaller retailers, who are already having their margins
squeezed, can see their occupancy costs reach as much as 25% of turnover, whilst the
department store is only paying service charges and business rates."