Retail rents are expected to drop by almost a fifth by the end of next year, as struggling retailers demand cheaper leasing deals in the recession.
Rents are forecast to drop 11% by the end of the year, as retailers are demanding better deals from landlords who are desperate to stop shops becoming empty in the economic downturn, according to property consultancy Colliers CRE.
The report identifies 60 retailers that requirements for new shops which are demanding lower rents and other incentives such as long rent-free periods. Some landlords are offering rent-free periods of up to six years to attract tenants.
The report says that this is the first drop in prime rents since the recession in the early 1990s.
Around £12 billion is expected to be knocked off capital values this year, and landlords inclduing Land Securities, British Land, Hammerson and Liberty International have all had to write down billions of pounds from the value of their retail assets.