Leisure & Retail

A round-up of the Leisure and Retail sectors, for both in and out of town.

Leisure - Lease Constancy

The cinema sector has continued its growth during the recession and has sustained a strong performance  throughout the whole of the UK. The largest operators such as Odeon, Vue and Cineworld have all reported increasing admissions and profitability and are respectively improving their market share with active acquisition programmes going forward. 

This is supported by the recent letting of the cinema at Silverburn Shopping Centre in Glasgow to Cineworld, a site that generated strong competition from other operators resulting in a record rent being set. Acting for Fidelity International Real Estate Fund Company, the landlord at Palace Towers in Hamilton, against the tenant, Vue, Savills lease consultancy  achieved an uplift in rent of 9.25%.  A similar uplift was achieved following Savills rent review of the Cineworld at Queens Link in Aberdeen, securing £425,000 pa on behalf of park owners X Leisure.  Other rent reviews being taken forward for Scottish cinema landlords by the Savills team include Vue at Forthside in Stirling for CTP UK Ltd, Odeon Kilmarnock for Henderson and Odeon Springfield Quay in Glasgow. 

Future predictions for the cinema sector is promising with several of the larger operators reporting the desire to expand market share with new openings over the next few years. 

In town retail

Turning to city centre locations, there has been a flurry of activity within Glasgow's secondary retail sector, with many vacant properties being snapped up by national leisure operators.

Locations of particular note are West Nile Street, Gordon Street and St Vincent Street where Patisserie Valerie, Bibi's Bakery, Las Iguanas, Handmade Burger Co and Bread Meats Bread have all taken space. There is also continued interest in both of these locations from leisure operators with two currently under offer who will both augment and complement the already established surrounding traders. Elsewhere in the city centre Hard Rock is now open at the old Athenaeum at 179 Buchanan Street.

With increased demand and a number of active requirements we are noticing that rents are now improving, whilst not up at the levels recorded in 2006/2007 there have been slight annual increases and a pattern is definitely appearing. New developments are currently on site at 1 West Regent Street, which will complete towards the end of 2014. Bam Construction is currently developing its site at 110 Queen Street, which will comprise 143,000 sq ft of office accommodation together with 22,000 sq ft of ground floor retail space.

Out of town retail

Whilst market conditions remain fairly sluggish, there are a number of 2013 highlights within the out of town retail sector as activity continues its modest upturn.  We are now seeing development, which has been absent for the last five to six years returning following what has been a challenging time, particularly in the bulky goods market. Locations where there is an identifiable tenant are now in demand by developers and landlords alike.  

Savills transacted the largest single non-food letting in the Scottish market in the past five years on behalf of Kames Capital in reletting the former Big W extending to 75,000 sq ft at Newcraighall to The Range. We have also welcomed new entrants to the region such as Nike who opened its first Scottish retail warehouse outlet at Craigleith Shopping Park in Edinburgh earlier this year from landlord Henderson Global Investors, advised by Savills. Furniture retailer CSL also opened its first Scottish store on Abbotsinch Retail Park, Paisley from landlord Hammerson, represented by Savills. In addition, Costa has continued its expansion securing five new out of town stores including three Drive Thru formats in Dumfries, Port Glasgow and Newcastle. Lastly, Savills advised Matalan on its letting of a new 20,000 sq ft store at Straiton Retail Park, Edinburgh which opens in 2014.

The redevelopment of Hermiston Retail Park, Consett, anchored by Morrison’s and B&Q, completed in October and is already 95% let or under offer with only 7,500 sq ft remaining available.  A further illustration of development activity picking up is at Abbotsinch Retail Park, Paisley where Phase 2, extending to 54,000 sq ft,  has commenced work on site following lettings to Dunelm, Wren Living and Maplin with practical completion scheduled for June next year.  Working closely with our Residential Development team, we also disposed of a 1.8 acre town centre site in Ellon, Aberdeenshire to Aldi. 

 
 

Key contacts

Suzanne Taggart

Suzanne Taggart

Director
Lease Consultancy

Savills Glasgow

+44 (0) 141 222 4118

+44 (0) 141 222 4118

 

Mike Spens

Mike Spens

Director
Out of Town Retail

Savills Edinburgh

+44 (0) 131 247 3814

+44 (0) 131 247 3814