The North East’s rental growth figures for 2014 are up more than four per cent since 2013 to -0.8 per cent.
This uplift reflects the improving picture of the region’s retail sector as it outperforms the national average of -1.2 per cent, according to the latest figures from Colliers International’s annual Midsummer Retail Report.
Despite the positive figures, the North East is experiencing its sixth consecutive year of rental decline after suffering some of the worst rental growth figures as a result of the recession.
During the downturn the region experienced a drop of 19 per cent, compared to the national figure of just 13 per cent; average rents remain 31 per cent below 2008 levels of £92 in 2008 at £67 per sq ft, with only Wales witnessing a deeper decline in rental growth.
The main driver behind the improving picture in the North East is the increasing number of centres with stable rents; centres with stable rents are up from 33 per cent in 2013 to 83 per cent in 2014, compared to the 2014 UK average of 59 per cent, demonstrating signs of recovery in the North East’s retail sector.
Greg Styles, head of Retail Development and Leeds Office, Colliers International said:
“The North East is on the road to recovery and this year’s results paint a very positive picture of region’s retail sector.
“Newcastle is performing particularly well with a rental growth of five per cent.”
“Despite the North East’s poor performance on a national level, the region is showing early signs of recovery.
“It was one of the worst affected regions during the recession and has experience a number of significant falls in rental growth since 2008 as it has struggled to recover.
“We do, however, expect to see increased rental growth in the coming years with the region expected to reach flat growth in 2015 as it continues to mirror the national trend of post-recession recovery.”