Liverpool One retail rents ‘trailing’ Trafford Centre’s

Sep 24 2008 by Tony McDonough, Liverpool Daily Post

Liverpool One

PRIME retail rents at the £1bn Liverpool One shopping development are trailing Greater Manchester’s Trafford Centre by as much as £80 per sq ft, a new report reveals.

The annual Retail Market Overview report, due to be published next week by property agent Colliers CRE, shows the Trafford Centre can command zone A rents of £400 per sq ft – the most expensive in the North-West.

Headline Zone A rents for Liverpool city centre, including Liverpool One, are £320 per sq ft. This is enough to claim second place ahead of Manchester city centre, which can command rents of £300 per sq ft.

The Colliers report also revealed that the New Mersey Retail Park, in Speke, commands the highest rental value of any out-of-town retail location in the North West with rents of £55 per sq ft.

Liverpool One, which launched its first phase in May and is launching its second phase in the next few days, originally aimed for rents in excess of £350 per sq ft.

But slowing economic conditions have made this impossible to sustain and zone A rents have now fallen to £320 per sq ft.

The development, part owned by the Duke of Westminster’s Grosvenor company, is now offering incentives to retailers to take space.

In an interview aired on radio show LDP Business Week earlier this month, the Duke of Westminster admitted Grosvenor had been forced to offer substantial rent-free periods in a bid to fill its shops.

In its report, Colliers CRE said: “The region’s reputation as a retail destination was boosted by the opening of the 1m sq ft Liverpool One development.

“The scheme is bucking the national downward trend in retail and trading well. The second phase opens soon and will provide a further boost to the city’s trading in the run-up to the crucial Christmas trading period.” A spokeswoman for Liverpool One disputed the £350 per sq ft figure, insisting the target was always around £320 per sq ft.

She added: “We believe the comparison with Manchester city centre is a more accurate one. Comparing us with an out-of-town centre like the Trafford Centre isn’t comparing like-with-like.”

Since Liverpool One opened at the end of May, it has proved a hit with shoppers, many of whom have travelled from way beyond Merseyside.

Tenants include John Lewis, Debenhams, Flannels, Liverpool FC’s shop and Zara. John Lewis, which opened in May as part of the development’s first phase, revealed takings in the first three months of trading were 14% ahead of target.

In his interview, the Duke said that Grosvenor was committed for the long haul, despite the tough retail environment at present.

“Times are tough. They will be tough for a year or so, but 99 years is a long time and I can afford to look at that time length,” he added.

tonymcdonough