7 / 50
Last year, the RPHI index enabled a
comparison of centre health down
to areas broadly equivalent to
Unitary Authorities (128 areas). This
year, however, we have widened
the index to allow an assessment of
over 2,500 centres.
CURRENT RPHI
At a regional level, once again
we have identified London as the
strongest location. This is supported
by an affluent demographic profile,
strong economic fundamentals
and a low vacancy rate. The index
score of 127 compares to the lowest
regional index scores of the North
East and Scotland at 83 – caused
by less affluent shoppers, lower
economic growth over the past
five years and higher than average
vacancy rates. At a more local level,
the top five areas are York, Outer
West London, Oxfordshire, West
Sussex and Milton Keynes. Of retail
centres with over 100 units classed
as comparison retail, the top rated
centres are Witney, Whitstable,
London – Canary Wharf, St Ives –
Cornwall and Hove.
RPHI OUTLOOK
In order to assess the outlook for
retail locations, we have utilised
economic forecasts for the period
2015-2020 to generate an ‘outlook’
index. The ‘outlook economic’
UK index rises from the current
100 benchmark to 115. Although
the rate of population growth is
forecast to fall in the next five years
compared to the previous five
years, unemployment is forecast
to fall to 5% accompanied by
an increased rate of residential
consumer and retail sales growth.
When we use this with the other
RPHI variables, the region with the
greatest growth from the current
final index to outlook index is the
East Midlands; rising from 94 to
103. This region has a relatively
favourable
demographic
mix
along with a faster improvement
in its economic fundamentals than
corresponding regions. The top
five centres in this outlook index
include Witney, Whitstaple, St Ives
– Cornwall, London – Canary Wharf
and London – Clapham Junction.
These centres already exhibit
very low vacancy rates which we
would expect to continue to fall
supporting strong rental growth.
HOTSPOTS
The RPHI outlook index allows us
to identify centres with higher than
average growth prospects but with
current high vacancy levels. The
top five centres with the strongest
RPHI outlook index but with a
vacancy rate index below 75 (100
being average) are Camberley,
Reading,
Newbury,
Chester
and Croydon. These are places
currently experiencing higher than
average vacancy rates, but forecast
to experience above average
economic growth. Stronger than
average economic growth is likely
to erode vacancy rates relatively
quickly and underpin subsequent
rental growth. We would expect
landlords and retailers to closely
assess these centres given their
potential.
7
Retail Therapy
| 2015
0
50
100
150
200
250
300
350
400
450
Witney
Whitstable
London - Canary Wharf
St Ives - Cornwall
Hove
Economic Indexn (current)
Economic Indexn (outlook)
Demographic Index
Vacancy Rate Index
RPHI
Outlook RPHI
Source : Cushman &Wakefield Research
Top 5 ranking
Source : Cushman &Wakefield Research
Current RPHI NUTS 3 Map
“Retail sales have seen 25 months of consecutive monthly year-on-year growth,
the longest period of sustained growth since May 2008.”
UK