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Shopping demand in Glasgow sees rise in retail space prices

Published 29/06/2016

Retail space prices Princes Street are predicted to rise as a result of the St James Centre being closed temporarily
Retail space prices Princes Street are predicted to rise as a result of the St James Centre being closed temporarily

The price of retail space in Glasgow has jumped by 8% in a year as international chains vie to secure prime locations in Scotland's top shopping destination, according to a new report.

Colliers International found the supply of retail space in Scotland's biggest city is struggling to meet demand, with many brands still prepared to pay top dollar for a good locations.

Their 2016 Midsummer Retail Report recorded a mixed picture across the country, with rents increasing in places but stagnating or decreasing in other centres.

The real estate services company surveyed 27 town and city centres across Scotland.

Of those, three recorded increasing rents, nine saw a decline and the remaining 15 were stable.

Perth had a 10% rise over the last year - proof, the report's authors said, that small city-centre shops can be desirable if the right clientele can be attracted.

Edinburgh saw an increase of 3% but the report said the market for retail space is being distorted in the short-term by plans to rebuild the St James Centre, which has left many occupiers seeking a temporary home.

Colliers predicted that prices on nearby George Street and Princes Street will rise as a result.

In Dundee, the rate of vacant shop premises has been increasing since April 2014, with more than 18% of units now unoccupied.

The "gravitational pull" of Glasgow and its big shopping centres was also thought to be having an impact on some smaller town centres. Of the nine centres with deteriorating rents, five are located in the west of Scotland - Ayr, Cumbernauld, Greenock, Hamilton and Irvine.

Overall, the report found, average rents in the sector north of the border have hardly moved over the last 12 months, down 0.2% since June last year.

John Duffy, director of in-town retail with Colliers International in Scotland, said: "Glasgow is by far the strongest shopping destination in Scotland and supply is struggling to keep up with demand, even as new space is created.

"While many retail brands are very selective, they will still pay top dollar for a prime destination.

"Smaller high streets have stagnated in recent years and some have moved backwards as retailers leave for larger, out-of-town destinations."

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