2018 was another strong year for Glasgow’s Buchanan Street – Scotland`s best shopping thoroughfare – with the arrival of five retailers, including Victoria`s Secret and Nespresso, and over 50,000 sq ft of new retail space.
The level of retailer demand for Buchanan Street saw only one vacant unit as of December 2018 (the former New Look menswear store at 225 Buchanan Street) as the street bucks a national trend of retailer woes and depressing headlines. The street currently has a low vacancy rate of under 2 per cent of retail floorspace, compared with the UK average of 10.4 per cent.
Rental growth has also been evident, although this has largely been reserved for smaller units of under 1,500 sq ft where competition for the best sites has driven rents up to £321 per sq ft Zone A. You will struggle to identify another UK city that has seen comparable rental growth over the last 36 months.
In terms of what is driving this performance and whether it will continue in 2019, the outlook for the UK’s strongest retail destination after London’s Regent Street looks good.
It’s well documented that ‘super prime’ retail in the UK`s largest cities continues to perform best, and Buchanan Street is firmly established in this top tier, being a priority location for expanding international brands considering not only Scotland but the UK as a whole.
Local factors are also shaping the market. The shopping centres in Glasgow city centre are not as dominant as other major UK cities including Birmingham, Leeds and Manchester, and this has helped fuel demand on Buchanan Street.
Savills is presently tracking a number of emerging new store requirements which points to another active year in 2019, as The Ivy, Jo Malone and Three Store all commit to new openings.
Notwithstanding this, rents are expected to stabilise for smaller stores on Buchanan Street in 2019, and there is likely to be downward pressure on rents for larger stores of 5,000+ sq ft, where there are signs that overall property costs are deterring some retailers from opening.
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