Retail property values have fallen by 16% compared to their peak in the fourth quarter of 2007, according to brokers Christie + Co’s latest Business Outlook publication.
The annual publication, which uses average price information derived from retail transactions brokered by the company, showed that average retail property prices for 2009 dropped by 9.8%, compared to a decline of 6.5% in the previous year.
Tony Evans, head of retail at Christie + Co, said: “The retail sector, like all sectors, has not been immune to the economic downturn. However, it has remained more robust, with property values falling less than in other markets. The recession has undoubtedly changed the way that we shop, with the acceleration of long-running trends, such as discounting and the introduction of value ranges.”
The report predicts that the next 12 months will bring further downward pressure on gross profit margins, continued growth of on-line shopping, the introduction of further value ranges and more consolidation across the sector.
David Rugg, chairman, added: “Although trading conditions proved tough across all sectors, operators successfully mitigated losses by focusing on reducing costs and providing value for money goods and services. It is worth noting that most of the business failures in our sectors were due to overleveraging, or unsustainable rent commitments, rather than as a result of poor trading.”