Scotland business

'Mixed picture' on Scottish retail space prices

Glasgow centre Image copyright Google
Image caption The price of retail space in Glasgow has jumped by 8% in the last year, according to Colliers International.

The price of retail space in Scotland's biggest shopping destinations has risen in the past year but largely stagnated elsewhere, a report has found.

Property firm Colliers International said Glasgow saw average rents rise by 8%, with prices up by 3% in Edinburgh.

However, average rents in the sector north of the border hardly moved, falling by 0.2% over the year.

Colliers surveyed 27 town and city centres across Scotland.

Of those, three recorded increasing rents, nine saw a decline and the remaining 15 were "stable".

The property firm's Midsummer Retail Report suggested the price of retail space in Glasgow jumped as international chains vied to secure prime locations in Scotland's top shopping destination.

It found the supply of retail space in Scotland's biggest city was struggling to meet demand, with many brands still prepared to pay "top dollar" for a good location.

'Mixed picture'

However, the report recorded a mixed picture across the country.

Edinburgh rents increased but the report said the market for retail space was being "distorted in the short-term" by plans to rebuild the St James Centre, which had left many occupiers seeking a temporary home.

It described Dundee as "simply oversupplied, as it has two shopping centres, which are the prime draw for retailers".

The rate of vacant shop premises there has been increasing since April 2014, with more than 18% of units now unoccupied.

'Gravitational pull'

The "gravitational pull" of Glasgow and its big shopping centres was also thought to be having an impact on some smaller town centres.

Of the nine centres with deteriorating rents, five were located in the west of Scotland - Ayr, Cumbernauld, Greenock, Hamilton and Irvine.

However, Perth was a "star performer", with rents rising by 10% over the last year. The report's authors said that showed small city centre shops could be desirable if the right clientele was attracted.

John Duffy, from Colliers International in Scotland, said: "Glasgow is by far the strongest shopping destination in Scotland and supply is struggling to keep up with demand, even as new space is created.

"While many retail brands are very selective, they will still pay top dollar for a prime destination.

"Smaller high streets have stagnated in recent years and some have moved backwards as retailers leave for larger, out-of-town destinations.

"That decline largely came to an end over the last year, as cafes, convenience stores and new brands fill the gap.

"We may now start to see a return to modest rental growth."

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