Retail in an online era

27 June 2016

The demise of BHS (Savills advising Duff and Phelps Administrators) and Austin Reed, two institutional retailers, shows how critical it is to be relevant in the current economic climate. In an era where the consumer can buy almost everything online, the high street needs to go beyond its functional retail use to provide a pleasant destination where brands can be experienced and time spent.  

City centres need to provide an environment that attracts the consumer not only just to shop. Glasgow and Edinburgh serve office workers, commuters and shoppers as well as both being big tourist destinations and university cities maintaining enviable footfall numbers. Both are host to John Lewis and House of Fraser/ Jenners which offers point of difference to other regional locations. Edinburgh is also host to Harvey Nichols with a stronger tourist draw.

So how do Scotland’s two key retail centres currently compare?

Glasgow continues to be the location of choice by mass and luxury retailers looking to open their first store in Scotland with examples including Massimo Dutti, Kiko, Belstaff and Vivienne Westwood. This interest has seen rents on Buchanan Street rise to above £280 per sq ft, however a fixation on Buchanan Street is creating a back log of unmet demand from new retailers who won’t consider alternative locations. Savills acted for Hawes and Curtis who waited over five years to get the right unit on Buchanan Street at 131 for a rent of £200,000 per annum. Marketing two prime fashion units on behalf of BAM on Ingram Street, Savills believe retailers can benefit going off Buchanan Street and securing cost effective flagship retail space.

Edinburgh captures a different middle class customer base than Glasgow, highlighted by Joules’ recent upsize to 6,956 sq ft (646 sq m) at 85 George Street, much larger than the retailer’s modest Glasgow store. Savills acted jointly on behalf of the landlord, Standard Life. This sentiment is also reflected by the retailers who choose the Scottish capital city for their first Scottish stores including  Anthropologie, Mint Velvet and Lulu Lemon. George Street provides an aesthetically pleasing location, more affordable than Buchanan Street, at rents sub £200 per sq ft. In Edinburgh, the closure and redevelopment of St James shopping centre, due for completion in 2020, is having a ripple effect with a resurgence of demand for retail space on Princes Street.

Emphasising the need for destination retailing both cities have experienced a high demand for leisure clustering. Edinburgh will welcome a new run of operators at St Andrews Square including Drake and Morgan, Busabi Eathai and Iberica, none of which are yet in Glasgow, with net rents above £60 per sq ft and overall record highs for the city. Carluccios will also be opening its first Edinburgh outlet, off St Andrews Square, in early 2018 advised by Savills. When Carluccio’s opened in Glasgow five years ago, a new leisure cluster emerged around West Nile Street and St Vincent Street as Bills, Las Iguanas, Five Guys and most recently Miller and Carter followed suit. Whilst leisure rents have moved on, they’re unlikely to reach the same rates as Edinburgh anytime soon. 

Every city centre and retail destination needs a point of difference in order to secure ongoing success and it’s imperative that Glasgow and Edinburgh hold onto their own identity. The future for Edinburgh will be the success of St James and what the redevelopment will mean for retail and leisure pitches westwards. Glasgow’s future expansion relies on its ability to attract new retailers beyond Buchanan Street.

 
 

General Enquiries

Savills Edinburgh

 

Key Contacts

Estelle Forrester

Estelle Forrester

Director
Retail

Savills Glasgow

+44 (0) 141 222 5851

 

Beth Hocking

Beth Hocking

PR Manager
Press Office

Savills Edinburgh

+44 (0) 131 247 3739