Talking Shop

    Kevin Mahoney, Director Central London Markets believes retail offers great opportunities to the confident investor.

    Q. Which sectors of London’s retail market are now performing the best?
    A. Retailer demand is still extremely high in central London thanks to tourists filling the gaps that have been left by increasingly nervous UK consumers. There were several deals on Regent Street and Oxford Street in 2011 with competing international retailers continuing to pay premium prices for flagship stores. There are new transactions ongoing now.

    Q. Has the arrival of the Westfeld shopping centres changed the strategies of the luxury brand market?
    A. Not in our experience. The luxury brands are present in the new Westfield Stratford, for example, and remain at Westfield London, but they still want prime central exposure. The only sector showing a lack of confidence is fashion. It dropped 2.1% in Q3 last year but showed a slight recovery by the end of 2011, according to the Office of National Statistics. General UK sales rose in the second half of 2011, giving cause for optimism this year.

    Q. What do you predict for 2012?
    A. Despite the gloom, I believe there are good reasons to be positive. Inflation is beginning to fall and in Q1 2012 dropped to its lowest level for three years. The Bank of England expects this trend to continue over the next 12 months, despite the Eurozone storm, which will help to stimulate domestic consumer confidence. For some retailers, perhaps again especially those in the clothing sector, this year will be tough as banks continue to look at ways of reducing their loan books as historic borrowing arrangements expire. But one retailer’s problem is another retailer’s opportunity – in London’s best locations a new retailer is always waiting in the wings.  


    Q. What are the key opportunities for investors this year?
    A. Bank sales already show every sign of turning from a trickle into a river. There are many good quality high street shops where the business fundamentals remain strong but the banks may feel that they have to intervene in the next few months. This leaves investors with potentially huge opportunities.


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