As 2024 unfolds, London’s retail sector is set to continue its recovery, supported by increasing visitor numbers, major redevelopment projects, and rising confidence in the market.
London’s Retail Resurgence: Footfall Trends, Redevelopments, and a Promising 2024
The retail landscape in Central London has faced a challenging few years, with footfall numbers significantly impacted by the pandemic. Unlike other UK cities, London’s heavy reliance on overseas visitors—both tourists and business travellers—meant that the city’s retail sector struggled more than most. However, recent data and upcoming developments paint a brighter picture for the future of retail in the capital.
Footfall Recovery: Signs of a Resurgence
Visitor numbers in Central London have been on a slow but steady increase since 2022, and December 2023 marked a significant milestone. London was one of only two UK cities to record an increase in footfall compared to the same period in 2022. This uptick suggests that the city is on a path to recovery, with further improvements expected in the near future.
Looking ahead, the forecast for 2024 is promising. VisitBritain predicts that international visitor numbers will be just 3% lower than in 2019, a remarkable rebound considering the circumstances. Even more encouraging is the expectation that overall visitor spending will surpass 2019 levels by 20%. This surge in spending is poised to inject much-needed growth into London’s economy, particularly benefiting the retail sector.
Key Redevelopments Driving Retail Growth
Several significant redevelopment projects across London are set to bolster the retail sector further in the coming years:
- Oxford Street and the West End: Oxford Street, one of the world’s most famous shopping destinations, is set for a continued recovery. Westminster Council has announced initiatives to support small businesses, including making shops, vacated by American candy stores, available rent-free and reducing business rates by 70%. In 2024, the area will welcome new arrivals like a relocated Uniqlo store and the much-anticipated IKEA at Oxford Circus. A proposal to increase pedestrian space on Oxford Street, with added greenery, seating, and improved lighting, will enhance the shopping experience.
- Stratford: Major changes are on the horizon; Unibail-Rodamco-Westfield has begun consultations on building student accommodation on an unused upper deck of its car park, a move that could unlock more value from the asset. Nearby, Frogmore has put the 320,000 sq. ft Stratford shopping centre up for sale at a guide price of £105 million, with plans for a £180 million redevelopment that includes a hotel, office space, and 423 homes.
- North London: Camden Lock Market is set for a significant transformation, including new exhibition spaces, shopfronts, a canal jetty, and even a ferris wheel. Meanwhile, the £8 billion Brent Cross masterplan will deliver new retail and leisure spaces, along with residential and office developments.
Beyond Central London: Revitalizing Local Areas:
Redevelopment is not limited to Central London. Various projects across the city are aimed at repositioning local areas and creating vibrant community spaces:
- Wandsworth’s Ram Quarter: This recently redeveloped area will soon welcome a mix of new food, retail, and leisure occupiers, enhancing its appeal.
- Elephant & Castle: A new town centre is being created, including the replacement of the existing shopping centre, which will transform the area.
- Lewisham: The redevelopment of Lewisham town centre will deliver up to 1,700 new homes and a reimagined shopping centre, offering a diverse range of occupiers.
- Ladbroke Grove (Kensal Canalside): A large development is planned, including a new Sainsbury’s supermarket, high street shops, cafes, restaurants, and over 2,500 new homes.
- Walthamstow: The Mall shopping centre will be redeveloped to provide new homes, retail spaces, and an enhanced town square, rejuvenating the main public space.
Rising Rents and Declining Vacancy Rates in 2024
As the retail market in London continues to recover, rents are expected to rise across most locations in 2024, with vacancy rates continuing to decline.
The prime zone A rent on Bond Street has nearly returned to its pre-pandemic level, and in the West End, zone A rents are forecast to grow by an average of 2.3% in 2024. Covent Garden is expected to see the highest rent increase at 3%. Despite previous declines, the overall trend is one of growth.
London’s retail vacancy rate stood at 10.4% at the end of 2023, the lowest regional vacancy rate across the UK. This represents a 0.4% improvement from the previous year, signalling growing confidence in the market.
The city’s ability to adapt and reinvent itself remains one of its greatest strengths and this resilience will be key to navigating the challenges and opportunities that lie ahead.
How can your business can benefit from geolocation data and demographics? Get in touch with us today and request your free demo.
Get in touch!
Interested to read more about Visitor Insights? Check our related posts…