Discount stores cash in on Woolies sites

Published on Monday 21 September 2009 18:59

WHAT'S happened to the 800-odd Woolworths stores which had to close their doors in December?

Good question, and CB Richard Ellis (CBRE) has provided the answer in its latest report – so far around 60 per cent have either been let or are under offer, and, in true pick 'n' mix Woolies style, discount retailers, grocery and fashion retailers have been snapping up what suits them

Discount retailers have been leading the way, with B&M Bargains, 99p stores and Poundland taking 134 stores; followed by grocery outlets, including Iceland and Tesco, with 110 stores, and fashion operators such as New Look and Peacocks taking up 53.

In Scotland, 40 per cent of the total portfolio of 75 Woolworths stores are now let with a further 25 under offer. New occupiers for the stores include high street fashion survivors New Look, H&M and M&Co as well as Scotmid and Tesco. In line with the rest of the UK, discount retailers Poundland, Home Bargain and Wilkinsons have gobbled up the space. Tony Devlin, CBRE director of retail in Scotland, said: "For the Scottish retail sector, the pace with which this space has been let represents improved confidence and strength in the market. It also reinforces the fact that there is now demand for larger, well- configured space."

The growth of the discount stores has seen them move into areas described by the British Property Federation (BPF) as "posh" or "more affluent".

The number of discount retailers has increased by 60 per cent during the past two years and there are 1,423 in Great Britain, 86 of them in Scotland.

Liz Peace, chief executive of the BPF, said: "Whatever opinions people may have about pound stores, they are growing in popularity and generate jobs and footfall that benefits other retailers. This is good for landlords who would rather have a discount retailer than an empty store.

"The rise has also been fuelled by the demise of Woolworths leaving more prime spots available. Some of our biggest members including British Land, Land Securities, Prupim, St Modwen and Westfield all have pound store tenants.

"The increase in discount stores represents a marked change in the psychology of shoppers. People are going out with a set sum of cash knowing that they will be able to get a specific number of items. And in practice they often end up buying more."

&#149 Cushman & Wakefield has turned its Edinburgh occupational clock back and did what it advises clients to do – took advantage of a lease break to ensure it gets the best value for money. Five years ago it moved out of 66 Hanover Street where it was paying 24,275 a year for 1,360sq ft and into 3,500sq ft at Ten George Street.

Expansion of the business was very much in mind but it did not take place in a market which changed rapidly so it is now moving out of George Street.

And back to the same office in Hanover Street, paying a slightly increased rent of 27,160 but one that is "substantially" less than it paid in George Street.

Stuart Moncur, who heads the Edinburgh operation, said: "It is simply good financial housekeeping. Now is an exciting time in the retail industry as there is a lot of interest in the Scottish market from international brands who are keen to test the water in the UK and take advantage of the clever incentives being offered by landlords."

Cushman, needless to say, managed to negotiate the incentive of an initial rent-free period in a deal in which GVA Grimley represented the landlord, West Coldstream.

Keiller Group sells warehouse for 4.7m

ONE of the largest industrial sales so far this year has been completed, with the Keiller Group selling the distribution warehouse known as Nexus, Drumhead Road, Cambuslang, to construction business CCG Group for 4.7 million. The warehouse had been occupied by a distribution company which went out of business. Jones Lang LaSalle's industrial team handled the sale, Davidson Chalmers did the legals for Keiller and Anderson Strathern for the purchaser.

TEN new industrial lettings totalling almost 55,000sq ft have been concluded at the MEPC Hillington Park estate outside Glasgow. The largest transaction – a refurbished 10,000sq ft on a five-year lease – was by a government body which, for some reason, wishes to remain anonymous.

WHAT must be close to the lowest industrial rents around are bringing them in to St Modwen's 31-acre Pegasus Business Park on the former Rolls-Royce factory at Hillington, Glasgow. Recent lettings total 56,000sq ft, Reid Furnishings taking 5,000sq ft in addition to the 52,000sq ft it already has, 20,000sq ft of refurbished space has been let to architectural metalwork and glazing systems company Charles Henshaw and MTM Transport has signed up for 31,000sq ft on a three-lease. The rents? 2 per sq ft, described by joint agent (with BNP Paribas Real Estate) Iain Davidson of Colliers CRE as "exceptional value".

AT THE Mall, Aberdeen, existing tenants Schuh, Timpson and Signet Group have made a long-term commitment with new leases, Schuh taking 1,500sq ft at 128,600 a year, with H Samuel paying 56,700 for its extended lease and Ernest Jones 55,500. Montagu Evans acted for the landlord, The Mall Limited Partnership.

AUSTRALIAN retailer Howards Storage World is set to open its first UK store at The Centre in Livingston. The company, which specialises in storage and organisation solutions for the home, has agreed a 15-year lease on a 5,000sq ft unit at an undisclosed rent. Montagu Evans acted for the landlord, Land Securities.

IMAGE Estates has completed the letting of the first office suite within Enterprise House at Galabank Business Park, Galashiels, a speculative development of high quality open-plan offices totalling 15,045 sq ft. Care at home service provider, Independent Living Services, has taken a five-year lease on a 1,068sq ft first floor suite. The quoted rent was 15.30 a sq ft. Edwin Thompson and Ryden acted for Image.

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