Posts from June 2023

UK high street sales declined in May 2023 for the first time in 26 months, according to the latest BDO High Street Tracker. Like-for-like (LFL) sales on British high streets fell by 1.5%, following on from a 14% increase for the same month in 2022. In-store sales increased by 1%, up from last year’s base increase of 26.3%. However non-store sales dipped by 3.3%, following on from two consecutive months of growth. This was down against last year’s base increase of 4.9%. Despite a fall in inflation, LfL sales remain below price growth. The report found that total LfL sales were generally low in May, which was affected by an additional bank holiday due to King Charles III’s coronation. The additional two holidays may have contributed to lower spending as consumers prioritised holiday or experiential spending over general high street retail. General views towards spending may also have contributed, with inflation remaining abnormally high. Inflation grew by 8.7% in the 12 months to April, which was higher than expected. However, footfall increased during May, exceeding 3% in every week except the second, likely due to festivities surrounding the Coronation Weekend. The final week produced the strongest footfall figures, which was...

Insights News

Mothercare boss leaves after five months

The CEO of Mothercare has stepped down from his post after just five months in the position. Daniel Le Vesconte joined the struggling parenting retailer on January 16, becoming Mothercare’s first CEO in two years. The retailer’s profits had been significantly hampered by COVID-19 and the War in Ukraine, which saw it pull out of a significant Russian market. Prior to joining, Le Vesconte had held senior roles at retailers such as Abercrombie and Fitch, Hollister and Gilly Hicks, as well as the Wolverine Worldwide Group, Vans and Reef. He will now leave Mothercare with immediate effect. The retailer’s chair Clive Whiley and chief financial officer Andrew Cook will lead the board until a replacement is found. “The board believes that a change in CEO is in the best interests of the company and its shareholders”, Mothercare said in a statement. The news comes a month after the company held discussions with its lenders to renegotiate its debt facility, as it struggles with higher interest rates.

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Iconic Isle of Wight hotel goes to market

An iconic Isle of Wight hotel has gone to market, as its long-standing owner steps aside. William Bailey has operated the 51-bedroom Royal Hotel in Ventnor since 1994, but feels now is the right time to hand over to new owners. During his time at the hotel, it received a number of accolades including four silver star 2023 AA hotel accreditations and a 2023 AA two Rosette awards for culinary excellence. The site is host to numerous function facilities and sits close to Ventnor’s town centre amenities as well as the coast. It is being brought to market by specialist business property advisor Christie & Co. Ed Bellfield, regional director at Christie & Co, said: “The sale of The Royal Hotel represents an exceptional opportunity to acquire a highly successful hotel business with significant repeat patronage, largely due to its continued ownership and continuity within the same family since 1994.”

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Barkby downsizes pub estate as it pushes for profit

Barkby Group has conducted a review of its pub estate, as the real estate and hospitality group looks to return to profitability within the next financial year. The group has agreed “cash neutral” early lease surrenders the Harcourt Arms in Witney and the Ebrington Arms in Chipping Campden. Barkby also said it had received an offer for The Plough Inn, Gloucestershire, which has been accepted in principle and is currently in the conveyancing process. Following this sale, Barkby expects its pub estate to consist of six sites in the Cotswolds, Oxfordshire, and West Sussex. The group said it is aiming to return its pubs business to profitability by improving labour planning and efficiency, stock control processes, and reporting systems. In November of last year, the group said it looking to dispose of its pub business to focus on building and scaling a portfolio of roadside real estate investments. Barkby is looking to explore synergies between its pub business and its roadside real estate strategy via the installation of electric vehicle charging hubs. The group hopes this would boost revenue and draw footfall to its remaining roadside pubs.

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Huddersfield Radisson RED plans given green light

Kirklees Council has given the go-ahead for proposals which would see a £20m refurbishment of the historic George Hotel in Huddersfield. The plans for the 91-bed hotel – which will be operated by Radisson RED – are part of the wider Huddersfield Blueprint, a ten-year project looking to transform the town centre. Kirklees Council purchased the site in March 2020 as it looked to secure the site’s future and incorporate it into its regeneration programme. The hotel sits adjacent to Huddersfield Railway Station and was the first building constructed on St George’s Square when it was erected in 1851. The development will consist of a basement, ground floor, and four upper levels and will undergo an extensive refurbishment. The hotel’s façade along John William Street will be preserved while the existing internal structures behind will be replaced. A reception lobby, lounge, and a 70-seater restaurant and bar will make up the site’s ground floor. There will also be a conference room and banqueting suite for business events, receptions, and weddings. Councillor Shabir Pandor, leader of Kirklees Council, said: “Alongside our wider Huddersfield Blueprint plans and Our Cultural Heart, the George will act as an impressive gateway to the town centre...

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West End properties with “rare” planning consent acquired for £40m

A set of three adjoining properties in London’s West End have been acquired for £40m by Melford Capital Partners. The sites contain a variety of commercial uses, including a theatre, retail and gallery space, offices, and education facilities. The properties at 5-9 Great Newport Street comprise 44,725 sq ft of space and benefit from “rare” planning consent, said Savills, who completed the sale on behalf of Consolidated Development. Consented proposals detail the delivery of a 322-seat theatre, a 66-room hotel with a rooftop bar and pool, as well as restaurant, bar and gallery space. Situated within the West End, the properties are surrounded by a number of famous theatres, restaurants and shopping destinations. Joshua O’Rourke, associate in the hotel capital markets team at Savills, said: “We’re delighted to complete the sale of this prime site in one of London’s strongest leisure destinations. The transaction shows that in spite of recent economic headwinds, investor appetite remains strong for freehold Hotel development opportunities in Central London.” Savills acted jointly with Hanover Green LLP on the transaction.

Deals News

Frasers Group ups ASOS stake amid takeover speculation

Mike Ashley’s Frasers Group has upped its stake in ASOS for the second time in a week, as speculation over the fashion retailer’s future continues to swirl. On Tuesday, the group increased its total holdings in ASOS to 8.8% and increased them again on Thursday to 9.9%, suggesting a potential takeover could be on the cards. News broke earlier in the week that ASOS had became the target of a £1bn takeover bid from Turkish retailer Trendyol in December. Despite the offer being rejected, the retailer’s low share price may make it an attractive prospect for any potential buyers. Frasers Group is no stranger to an acquisition, having picked up brands including Missguided, I saw It First, Amara, and Gieves & Hawkes last year. In 2023, the group has also purchased a number of shopping centres. The group would likely need the support of ASOS’s two largest shareholders, Anders Holch Povlsen and Camelot Capital Partners, who own stakes of 26% and 15% respectively. This is not a given, as Povlsen has been a long-term stakeholder of the retailer and dismissed rumours over any involvement with the Trendyol bid. ASOS has seen its share prices plummet by over 95% since its peak in...

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Slim Chickens seeks drive-through sites

Slim Chickens is seeking drive-through locations across the UK. The restaurant chain is looking to open new sites between 1,400 sq ft and 2,400 sq ft in size on or near retail parks, food stores, or leisure destinations. Ideal sites would total between 0.4 and 0.5 acres in size to accommodate the building and around 30 car parking spaces. Slim Chickens will accept freehold or leasehold properties, and also operates a franchising system. The restaurant operates over 30 sites nationwide, and is looking to open more in out-of-town locations in major cities. The chain has instructed Richard Shuttleworth and Will Hepplewhite of Pudney Shuttleworth to find suitable properties in the north of England. Richard Thomas and Finley Day of Shelley Sandzer are searching for locations in the south.

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Marston’s on top in pub landlord-tenant relationships

Marston’s pubs have the highest overall tenant satisfaction rate within the UK’s top six pub companies, a government survey has shown. The Pubs Code Adjudicator (PCA) found that 85% of Marston’s tenants were satisfied with their relationship with the company, a 12% increase on last year. An average of 62% of tenants said they were happy with their relationship with their respective companies, a figure unchanged from last year’s survey. In second place was Greene King, scoring 75% (+8% year-on-year), followed by Admiral (75%, -5% YOY), Punch (60%, +13% YOY), and Star (55%, -5% YOY). The lowest scorer was Stonegate, scoring only 50%. This was down 9% year-on-year. In terms of tenant satisfaction, 62% of respondents are currently satisfied, while 19% are unsatisfied. Tenants with a tied lease agreement are the least satisfied (56%) whereas tied tenancies, franchises and other agreements are generally more satisfied (67%). Fiona Dickie, the Pubs Code Adjudicator, said: “It’s encouraging to see overall tenant satisfaction is in line with last year’s survey, despite the increasingly challenging and demanding market conditions that continue to plague the industry. There is, of course, some way to go to improving this figure from 62%, with some individual pub companies...

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Two national brands sign up to Rutland roadside development

Property developer Godwin has secured both Costa Coffee and restaurant brand Wendy’s to its Rutland roadside development, Ram Jam Services. Costa has taken a 1,788 sq ft unit, while Wendy’s has signed up for a 3,305 sq ft space through its franchisee Blank Table. The signings at the Rutland development follow the recent letting to Loungers, which agreed to open in a 4,500 sq ft unit for its new Brightside roadside dining concept. The service station sits alongside the main route between Peterborough and Grantham, adjacent to an existing petrol station and a new bakery. The site is also 15 minutes away from Rutland Water, one of Europe’s largest man-made lakes. Godwin says the site sees around 41,500 vehicles pass by daily, with the area and wider county attracting nearly 1.9 million annual visitors. Following the recent lettings, there is now only one unit comprising 754 sq ft available on the site. Claudine Tracey, associate director of commercial development at Godwin, said: “The site has always been prime for a thriving roadside destination, therefore it is fantastic to be able to bring new amenities and consumer choice for the local community and passing motorists here.” Construction of the development is...

Deals News

Agents instructed to roll-out pizza restaurant

A London-based pizza restaurant has instructed agents as it looks to open between five and ten restaurants throughout the UK over the next three years. Founded in 2018 by Italian-born Claudio Vescovo and Gianluca D’Angelo, Zia Lucia currently operates in 10 sites across the capital, with another site in West Hampstead due to open very soon. The restaurant has now appointed Savills to help find its next locations, with an initial focus on the south, east, and south west of the UK. Zia Lucia’s ideal sites are between 1,000 and 1,500 sq ft in size and in high street locations. Carlene Hughes, head of UK restaurants and leisure at Savills, said: “Zia Lucia has become a hugely successful pizza brand in London, offering truly authentic Italian pizza in many areas throughout the city. We’re delighted to have been exclusively retained by them as they now embark on their rollout into other parts of the UK and look forward to seeing their business grow even further.”

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New spending halted in Woking as Council incurs £1.2bn deficit

Woking Borough Council has imposed emergency measures after a spending spree left the local authority with a deficit of £1.2bn. The council’s interim director of finance issued a Section 114 Notice on Wednesday in response to “unprecedented financial challenges”. For the 2023/24 financial year, the Woking Borough Council has just £16m of core funding available. The Council expects its debts to hit £1.2bn, and has written down the value of its investment portfolio by £600m. “The notice is required because the expenditure of the Council is set to exceed the financial resources available, and therefore it can no longer balance its budget for the current financial year nor subsequent years”, the council said. A series of costly investments into the local infrastructure saw the deficit increase, including the development of the Victoria Square shopping centre. This was partially funded by £750m of borrowed money, although the development was reportedly worth just £200m. Other investments include a number of towers, with Woking now home to the tallest buildings outside of a big city in England. A Hilton hotel, public plazas, shops, and parking facilities were also constructed. The local authority also failed to put enough cash aside to pay for debts...

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Lakeside expansions bolster luxury offering

Lakeside Shopping Centre in West Thurrock has enhanced its luxury offering with three of its tenants upsizing at the destination. Fashion brand BOSS will move into a 4,218 sq ft unit later in the summer while watch brand TAG Heuer has recently opened a larger 431 sq ft showroom. Jewellery retailer Goldsmiths has also relocated into a 3,714 sq ft space to create Goldsmiths Boutique. The news follows the arrivals of a number of recent additions to the scheme, such as Pull & Bear, H&M Home, and Stradivarius, while M&S also relocated at the shopping centre. The new tenancies mean that the Essex shopping destination has let 170,000 sq ft to permanent occupiers within the last 12 months. Rob Detheridge, asset manager at Global Mutual, said: “These upsizes are testament to the strength of our relationship with the brands involved and to strong performance across existing stores to date. “It also speaks to the compelling offer here at the centre more broadly. Retailers continue to target prime space like our own – where the location and the tenant mix is strong, meaning healthy footfall is guaranteed.” P-Three and Lunson Mitchenall worked with Global Mutual as joint agents on the deals.

Deals News

UK “ripe for franchising” says bubble tea boss

The CEO of bubble tea brand Gong cha has set a target to open 500 stores in the UK, describing the market as “ripe for franchising”. Paul Reynish said that bubble tea could become the drink of choice for British consumers, describing the UK coffee shop market as “very saturated”. The chain made its UK debut in 2019 and now operates 13 stores in the country, and is expecting to open a further eight by the end of the year. Speaking to Sky News, Reynish described the UK as a “popular vehicle for investment”. “We have a partner already who has 13 stores, and they’re going to grow with us, but there’s more opportunity”. Gong cha was founded in Taiwan in 1996 and operates over 2,000 stores across 22 countries, including the US, Canada, Australia, Japan, and South Korea. Reynish, who has held senior positions at Burger King, Dunkin’ Donuts, Subway, and Five Guys, said the chain opened 245 net new stores last year and achieved revenue growth of 25%. He added: “Our franchisees are profitable and customer demand is strengthening. We will open in the Middle East this year; we have France and the Netherlands opening just before the...

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Kachori spices up F&B offering at Elephant Park

Kachori has opened on Ash Avenue at Lendlease’s Elephant Park neighbourhood in Elephant & Castle. The all-day dining Indian restaurant has opened in a 2,850 sq ft unit, with both indoor and outdoor seating able to accommodate up to 132 covers. Inspired by northern Indian cuisine, the concept is led by experienced restauranteur Sorowar Khan – the founder of Mango in nearby Borough Market – and the Kachori creator and project manager, hospitality consultant Humayun Hussain. The restaurant offers a menu of small and large dishes and a collection of drinks including beers, sprits, cocktails, and mocktails. Guy Thomas, head of retail and place assets at Lendlease, said: “From day one, we’ve focused on bringing best-in-class local businesses and independents to the neighbourhood, while delivering a huge amount of variety in one place. Elephant Park’s dining spans five continents and more than a dozen countries, and Kachori fits right in, as a brand with a community feel from hugely experienced restaurateurs.” Lendlease has now commenced the latest phase of development at Elephant Park, with ten new retail and restaurant units on the market. Set to be finished by 2024, the new phase is bounded by three areas, Sayer Street, Heygate...

Deals News

Wilko renews lease at newly-purchased shopping centre

Wilko has renewed its lease at Ortongate Shopping Centre, not long after the struggling shopping centre was snapped up by new developers. The discount retailer’s lease was due to expire in September, but it has now renewed for five years at its 23,436 sq ft unit at the out-of-town Peterborough shopping centre. The renewal will be seen as a victory by ALB Group, which acquired the “depressed” scheme earlier this year looking to reverse its fortunes. The developer said it is planning to spend £1m on improvements and looking to create a cheaper and more flexible renting structure for tenants. Property agent Prime Retail completed the negotiations with Wilko on behalf of ALB. Joe Bryan, senior surveyor at Prime Retail, which completed the negotiations with Wilko on behalf of ALB, said that the shopping centre seemed to be gaining a new lease of life since ALB’s takeover. Other businesses in discussions with Prime Retail about taking space at Ortongate Shopping Centre include an Indian restaurant, a pets store, and an arts, crafts, and garden store. ALB has managed to turn around some struggling areas such as Bridlesmith Gate in Nottingham, Albion Street in Derby and Sailmakers Shopping Centre in Ipswich....

Deals News

Consultation launched over Newcastle quayside hotel

A planning consultation has been opened regarding the conversion of a former office scheme on Newcastle’s riverside into a luxury hotel. Proposals from Dakota Hotels look to transform St. Ann’s Wharf, 112 Quayside, into an 115-bedroom hotel spanning five floors of accommodation. The designs, submitted by planning specialist Lichfields, also show the development of a ground floor bar and restaurant. Alterations to the building façade have also been proposed, with a ground floor extension designed to provide a central entrance lobby. Dakota Hotels currently operates sites in Glasgow, Leeds, and Manchester. The site was originally constructed in 1997 as a purpose-built office, and operated as a commercial premises up until Autumn 2022 when it became vacated and has remained so since. The surrounding area has become a hub for development in recent years, with the construction of developments such as the Gateshead Millennium Bridge, Sage Gateshead and the Baltic Centre for Contemporary Art. Dakota Hotels said that sustainability will be at the heart of the development, with improvements to the building’s thermal efficiency to be achieved through the installation of rooftop solar panels. The hotel group added that the development would create a £1.5m boost in economic output, provide £5.4m...

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Zara owner reports “very robust” Q1 performance

The owner of Zara has reported a “very robust” operating performance in the first quarter of the financial year. Inditex, which also owns brands such as Pull & Bear, Bershka, and Massimo Dutti, said its Spring/Summer collections had been very well received. In the three months to April 30 2023, sales at Inditex increased by over 13% to €7.6bn (£6.53bn), and were positive “in all geographic areas and in all concepts”. On a constant currency basis, sales grew by 15%. The group’s gross profit and earnings (ebitda) both increased 14% to €4.6bn (£3.95bn) and €2.2bn (£1.89bn) respectively. Inditex said that during the first quarter, openings had been carried out in 17 markets. By the end of April, the group was operating 5,801 stores worldwide. The report also gave details on a new Zara store design, created by Inditex’s architectural studio. The concept looks to integrate sophisticated interiors with functional and digital sections such as fitting rooms, self-checkout areas, click-and-collect points, in-store silos, and stockrooms. This new concept has already been seen at some stores including at London Stratford City.

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River Island upsizes at Trafford Centre

River Island has relocated and upsized at Manchester’s Trafford Centre, opening a new concept store. The fashion retailer has opened in a 21,000 sq ft former TopShop store, and looks to create an integrated service with self-checkout tills and interactive changing rooms. River Island’s new store will offer a range of menswear, womenswear, and kidswear, as well as a range of accessories. Russell Loveland, the director of UK asset management at Pradera Lateral, Trafford Centre’s asset manager, said: “River Island is a high street giant and a significant tenant for us here at Trafford Centre. We are delighted that the brand has decided to invest in its presence at the centre with the opening of this impressive new concept store.” Gemma Scarfe, digital and marketing director at River Island, said Manchester has been on the retailer’s radar for some time. “We’re delighted to have identified a new, larger retail space that will deliver a fun and refreshing shopping experience to our loyal customers as well as complement the thriving city”, she added.

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Young business woman calculating business rates

How to calculate business rates