09/10/2021 | Press release | Distributed by Public on 09/10/2021 05:31
Retail and food and beverage (F&B) occupiers in the City of London have been hit hard by the Covid-19 pandemic. With the vast majority of the City's workforce working from home some or most of the time since March 2020, and with only a small residential population within its boundaries to generate passing trade, many operators have not reopened or pivoted away from focusing on the central London market to look at a more regional and neighbourhood model.
But as we go into autumn 2021, and an anticipated meaningful return of office workers now back into the City, what is the current situation and is now an opportunity to break into, or expand, in the market on more favourable terms?
Exit numbers from City tube stations from Transport for London show that footfall is still roughly down 50 per cent on pre-pandemic flows, but these will have been affected by the usual summer slow-down. With lockdown restrictions only easing on 19 July, just as the summer holidays started, the City has not yet been able to assess what the numbers will look like when it's 'business as normal'.
There's been a bit of a catch-22 for operators here: do they wait until footfall returns and demand rises before they re-open, or will numbers only rise when enough shops and restaurants are open to draw people back?
The autumn should hopefully resolve this issue as companies begin the formal return to work and more of the office population returns. Long term, the City certainly looks like it will bounce back: our office agency team has reported that July was the third consecutive month in which demand for companies for space in the City grew.
Also encouraging is that we're seeing some activity by new and expanding operators: we have recently completed a letting to Gordon Ramsey's burger restaurant on South Place, adjacent to Broadgate, at a rent in line with pre-pandemic levels, albeit with increased incentives. In addition, Five Guys has acquired a unit on Bishopsgate, opposite the entrance to Liverpool Street Station, at a healthy £426,000 per annum rent.
We are also seeing an increase in the number of new companies, free of historic costs, seeking better terms than would have been possible 18 months ago in anticipation of the City reopening towards the latter part of the year. Kojo, a new concept who's first store in Hampstead has been a hit with the locals, offering healthy, vegan grab-and-go food, has identified that this is a gap in the market in the City and is therefore due to open later in September in Nuveen/We Work's Devonshire Square development.
As the footfall numbers rise, and confidence returns, we don't think Kojo will be the last. We anticipate that other new ventures will take advantage of opportunities in the City, seeing the long-term potential of the market.