Suburban surge – Remote working boosts retail and leisure demand across London suburbs and commuter towns.
The pandemic may have taken its toll on the sections of the retail market, but the capital’s boroughs and commuter towns are enjoying a new lease of life. As one of the top performing subsectors, these locations are enjoying a perfect storm of increased mid-week footfall, exciting independent and regional occupiers looking to expand, and landlords keen to attract occupiers aligned to the needs of the local catchment.
The pandemic has caused seismic shifts in Britain’s work patterns. London suburbs have seen a surge in activity with residents wanting to shop, eat, drink and be entertained nearer home, where they are spending more time than ever. As operators jostle to meet demand, these markets are reaping the benefits of our “new normal” way of life.
According to Springboard, in 2020 Central London footfall dropped by 58.7% as the nation locked down and retreated to its living rooms. The “stay local” message breathed new life into suburban high streets. These markets have demonstrated real resilience. The working population still craves the same retail and leisure experience it had in when working from their offices but are now seeking out new places to grab a bite to eat on their lunch hour or meet friends for a drink after work closer to home.
Across London’s suburbs, existing operators are enjoying the boost to trade whilst at GCW we are seeing a growing appetite from both national brands and independents looking to benefit from this increased footfall and consumer spend. Those offering a point of difference which meets the needs of the local demographic are likely to prosper as the final Covid restrictions are eased. We have noted a particular increase in activity across London villages with exciting independent and regional operators looking to maximise the increased midweek footfall.
Occupiers are also following their customers who are spending more time out of central London and nearer their homes and are subsequently repositioning their requirements to the suburbs, with Pret’s new store opening on Clapham High Street being an example of this. Bloomberg’s “The Pret Index” has also highlighted how the stores in London’s suburbs have been trading ahead of pre- Covid levels, compared to the West End stores trading at 73% of pre-Covid levels and the City only at 52%.
In Clapham GCW has just completed two lettings to operators keen to exploit the upturn in mid-week footfall. In May, Clapham Cycles opened its first shop at 255 Lavender Hill on the back of its success as a local cycle club. Meanwhile, Southwest London based Brickwood Coffee have committed to opening its 6th London Australian themed café at 21 Battersea Rise. We managed to retain the rent passing with minimal incentive, whilst securing a long-term lease with an exciting operator more in tune with the needs of the local catchment.
Increased demand for space is putting pressure on supply and supporting rental growth. This new dynamic is reflected right across London’s boroughs, from high streets to shopping centres. We’re seeing a range of start-ups and local independents, particularly in F&B, vie for space. As well as town centre streets, large scale projects such as Edmonton Green and Stratford Centre have proved hugely resilient in recent months, with very few tenant failures and low voids. As Londoners come out of lockdown and home workers seek out new experiences, there has been a real buzz in these busy boroughs. That momentum will continue as more exciting brands and new independents spot the opportunities to set up shop and further enhance the offer.
According to Office for National Statistics, 36% of working adults are working at home exclusively, while 47% are travelling to work, either exclusively or in conjunction with home working. Time will tell just how many people in the post-Covid climate return to the office, but it is doubtful things will return to what we previously regarded as “normal” when the majority of people commuted into central London 5 days a week. The rise of London’s suburbs as retail and leisure hubs is one trend that is surely set to continue, resulting in more resilient and potentially rising rents in these markets.