Research reveals restaurant sector slowing in Yorkshire as operators’ appetite shrinks

THE RESTAURANT market has cooled significantly in Yorkshire as operators are becoming increasingly more cautious, particularly around central prime pitches, according to research from global real estate adviser Colliers International.

The annual Midsummer Retail Report 2017, published today, explores the issues affecting the retail sector and provides an analysis of forecasting and trends both in and out of town.

Tom Cullen, director, Retail Agency North, in Colliers International’s Leeds office, said: “For the past few years, the food and beverage (F&B) sector has bolstered transactions in the retail industry, but it is no longer the solid driver that it once was.

“We are seeing less demand for super prime restaurant units paying £175,000 pa or more for 3,000-3,500 sq ft.

“Only the very best pitches or restaurant units costing £100,000-£120,000 pa to rent are seeing any significant demand.

“Carluccios on St Helen’s Square in York was the last super prime restaurant deal to open in the region in 2016.

“The market modus operandi has changed; where once operators would be confident in taking out 25-year leases, more and more are now negotiating fiveyear break clauses into their contracts to future-proof their business.”

However, the report also demonstrates that the F&B offering within leisure parks and shopping centres has proven to be more resilient than the high street, as they have ‘round the clock’ footfall.

Confidence in this type of retail unit is demonstrated at the White Rose Shopping Centre in Leeds which will open a 65,000 sq ft food and leisure extension.

The retail market as a whole remains strong for the most part. Across the region, there has only been a marginal decline in rental growth of -0.6 per cent since 2016.

Greg Styles, head of retail development at Colliers International, said: “During the past year, there has been a push towards flagship deals by bigger retailers in cities across the Yorkshire and Humberside regions.

“More than 500,000 sq ft of shopping centre space opened in Yorkshire and Humberside in 2016, and a further 1.5 million sq ft is expected to open over the next five years.”