Signs of a slow rental recovery on Princes St

By JIM DOW

PRINCES Street in Edinburgh is showing some positive, if hesitant, signs of a market-led revival, according to agents.

Jones Lang LaSalle director Sandy Gray says there are pockets here and there in Princes Street which show positive signs. “There are still requirements for the right thing but Princes Street is a mish-mash of buildings so what is the right thing?

“I have done rent reviews recently which show a positive situation. Some of the occupiers have extended their leases on more flexible terms. These occupiers are happy enough to stay in Princes Street.”

John Buchanan of Colliers CRE, says Princes Street has never had progressive year-on-year growth, tending to be relatively static for a few years before taking a “leap forward2.

He went on: “Arguably it did that five years ago when the zone A rent mark reached £200. Now if a landlord comes out of a rent review with £220 or marginally less he would be doing quite well.

“If you go back 10 years H&M was paying £235-£240 a square foot. It was a flash in the pan

Princes St - 'positive' rent reviews

and five years later rents had dropped back to £200, although it is now arguably £220. By contrast, George Street gas moved progressively forward in the last five years from £110-£115 and I am finalising a review where it is going to be between £135 and £140. We have not seen that kind of movement in Princes Street.”

Mr Buchanan confesses to not being a fan of Princes Street. He does not think is should be one-sided and some of its units are questionable. “George Street is Edinburgh’s Bond Street and Princes Street is its Oxford Street – although not as good.

“You will always have the larger stores in Princes Street but that is because that amount of space is not available elsewhere.

“It would be interesting to see what sort of demand there would be if 100,000 sq ft was on offer in George Street – but that is not going to happen.”