Activity in Q4 2020 accounted for 55% of all central London retail investment transactions in 2020, which totalled £860m, 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 benefitted 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. Chelsea has experienced a bout of new and exciting brands taking space in the area, and despite the pandemic, footfall on King’s Road, Duke of York Square, Sloane Square and Pavilion Road remained strong given the substantial residential population and affluent neighbourhood. This was enhanced by various initiatives including pedestrianising the pavilion, creating picnic areas surrounding Sloane Square, wavering cark parking charges and offering curb side delivery for those shopping with the luxury retailers.
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.”