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UK retail rents forecast to fall

Rents are set to drop by almost a fifth between now and the end of 2010, according to property consultancy Colliers CRE.

Rents across the UK’s high streets and shopping centres are forecast to have dropped by about 11% by the end of the year, according to Colliers’ annual midsummer report on retail property.

Colliers said overall average rental values are expected to fall by 9 percent in 2010 and 1.3% in 2011, only returning to growth in 2012. That will put extra pressure on retail property owners already struggling with a slump that has wiped out almost half the value of their assets, the Financial Times said.

In total, about 12 billion pounds is expected to be knocked off capital values this year, a decline of 45 billion pounds since the turn of the market in 2007, although there are signs of stability in the prices for the best properties.

Colliers forecasts that the sector will be valued at about 48 billion pounds by the end of 2009, down from 93 billion pounds at the end of 2006.

The report follows figures by the Office of National Statistics on Thursday that showed UK retail sales fell more than expected in May, dropping 0.6%.

This was posted in Bdaily's Members' News section by Ruth Mitchell .