Lambert Smith, Hampton - Retail Letting - London, Oxford Street

Date: 12 Nov 2002

RENTS REACH THEIR PEAK ON OXFORD STREET AS GLUT OF SHOPS KEEP SUPPLY ABOVE DEMAND.

Rents on London's Oxford Street may have peaked and the world famous shopping street won't see growth again until 2004 says a new report out this week.

Lambert Smith Hampton's Oxford Street Market Review predicts that despite the 11.1 per cent rental growth seen this year, rents in 2003 will not go higher than the £500 zone A level paid by Carphone Warehouse for 272-274 Oxford Street during the summer.

Michael Perkins, Head of Retail for Lambert Smith Hampton's West End Office says: "Confidence is strong with continued interest from overseas retailers and the mobile phone sector in particular. However, there are a dozen units in good pitches available right now and we anticipate a glut of properties coming to the market over the coming months. Consequently fewer landlords and retailers will be prepared to pay the large premiums which have marked the recent market"

Lambert Smith Hampton's 16-page Oxford Street Market Review, which is published this week, charts Zone A rents along the length of Oxford Street as well as supply and demand levels, investment activity and an overview of the health of Britain's favourite shopping street. It also includes a survey into shoppers buying habits. Findings include:

- Consolidation is a key trend with retail operators opening even larger stores. Within the last 18 months new flagship stores have opened for Allders (90,000 sq ft),Zara (35,000 sq ft), Benetton (20,000 sq ft) and French Connection (15,000 sq ft). JJB Sports will soon be opening its 35,000 sq ft flagship.

- International retailers have been leading the recovery in demand with new names like Aldo (Canada) and Expensive (Italy) opening flagships on the street.

- Investment activity on Oxford Street is returning after a period of uncertainty. Retail is now the investor's choice. LSH predicts investment activity will increase as the sector's performance improves.

- 79 per cent of shoppers rate Oxford Street as the UK's 'Number One' shopping destination in spite of the threat of out-of-town sites like Bluewater and Lakeside and in spite of concerns about losing customers to internet/on-line shopping.

- Overall, average retail spend on Oxford Street has increased by 44 per cent from £80.84 in 2000 to £116.50 today.

- The Oxford Street Market Review 2002 is available by calling Arezou Said in LSH's Research department on 020 7494 4000.

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