Concern as restaurant market slows down in north of England
The report says that the F&B market has been the driver of much of the occupier demand in the last two to four years.
The recent decline has been driven by ‘vanguard’ restaurant concepts taking a step back from further expansion. However, this has given other operators the chance to obtain property on better terms.
The report says that prime rents are up 1.8% year on year – the largest increase since 2008 - while overall prime vacancy has decreased by 0.2%.
In the North East, Humberside and Yorkshire regions the report says the restaurant market has 'cooled'.
It says: “We are seeing less demand for super prime restaurant units paying £175,000pa+ for 3,000-3,500 sq ft. Whilst demand remains, it is only at a rental level of around £100,000-£120,000pa for a restaurant unit – or for the very best pitches.”
Last year in the South West and Wales the food and beverage sector was driving demand. But the report says that the 'faltering steps' of some operators such as the Restaurant Group has slowed for dine-in restaurants, although demand for coffee stores seems 'unquenchable'.
In the Midlands the picture is mixed with the leisure sector 'pausing for breath' while rents for restaurant operations have 'softened'.
In Scotland the restaurant market has also slowed down but demand still remains with Wahaca, Franco Manca and Chaakoo entering the market.
In terms of rental performance Scotland was the strongest region in the year to the end of April 2017 with an average increase of 4.5%. While central London was healthy at 3% this was nothing compared to its double-digit performance in recent years.
