Retail Needs Assessment Study - City of London · pattern of retailing in the City. • Maintain a...

Retail Needs Assessment Study FINAL REPORT

NOVEMBER 2017

COLLIERS INTERNATIONAL

COLLIERS INTERNATIONAL 2 of 62

COLLIERS INTERNATIONAL Registered office: 50 George Street London W1U 7GA T: +44 20 7935 4499 www.colliers.com/uk CONTACTS

Matt Thompson Associate Director Retail Strategy T: +44 20 7344 6817 E: [email protected] Cat Stevenson Senior Retail Research Analyst T: +44 20 7487 1732 E: [email protected]

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TABLE OF CONTENTS Table of Contents 3

1 Executive Summary 4 1.1 Key Headlines 4

2 Introduction 5 2.1 City of London Today 5 2.2 Current Planning Policy Context 5

3 The Brief 7 3.1 Purpose of the Study 7 3.2 Answering the Brief 7

4 Data & Methodology 9 4.1 Summary 9 4.2 Data 10 4.3 Methodology 11

5 PSC Overviews 20 5.1 Summary 20 5.2 Cheapside 21 5.3 Fleet Street 25 5.4 Liverpool Street and Moorgate 29 5.5 Leadenhall Market 32 5.6 Rest of The City and Links 35

6 Future Retail Trends 38 6.1 Trends and Implications for the City of London 38

7 Appendix 43 7.1 Map 1 - PSC Catchment Boundaries 43 7.2 Map 2 - Leadenhall Market – Work Locations of Survey Respondents 44 7.3 Map 3 - Cheapside – Work Locations of Survey Respondents 45 7.4 Map 4 - Liverpool St / Moorgate – Work Locations of Survey Respondents 47 7.5 Map 5 - Fleet Street – Work Locations of Survey Respondents 48 7.6 Methodology Flow Chart 49 7.7 Map 6 - Prime PSC Streets surveyed in Audit 50 7.8 Central London Office Pipeline 51 7.9 Map 7 - Benchmark Locations - Boundaries 52 7.10 Retail category Look Ups 53 7.11 On Street Survey Results 54 7.12 Retailer Requirements Matrix 58 7.13 Map 8 - Retail Stock and Office Pipeline Map 59


1 EXECUTIVE SUMMARY 1.1 KEY HEADLINES

• Retail demand in the City of London is largely driven by workers. The Square Mile contains approximately 8.7m sqm of quality office space, resulting in a daily commuter population over 65 times higher than the residential population. There is also an additional revenue stream from tourists, which is set to grow 3-4% every year to 2025.

• Demand for office space in the City of London remains high and is a driving force behind the significant amount of space currently under construction or at the planning stage. The backdrop to this is significant investment both in transport infrastructure and public realm which have, in turn, given the City of London the strongest platform from which retail can continue to flourish up to 2036.

• The worker-centric nature of the City today results in a typically five-day trade for its occupiers. Looking forward - opportunities for a seven-day trading week, through an extension of the evening and weekend economy, lend themselves to the locations with the strongest transport connectivity and high F&B demand.

• There is currently 0.81sqm of retail floorspace per person across the City of London as a whole (the ‘Retail Supply Ratio’). Cheapside is the only PSC in the City which has a Retail Supply Ratio greater than 1sqm/person, largely due to One New Change. The remaining PSCs all currently provide less than 1 sqm per head of population.

• Based on the existing Retail Supply Ratio and an anticipated rise in total daily population of 169,000, it is forecast that the City of London should seek to deliver a minimum of 196,000sqm of additional retail space, to adequately meet future demand.

• Whilst bricks and mortar retail will not be fully replaced by online, the role of the physical store is changing into two polarised functions; convenience and destination shopping missions. Due to the nature of shopper behaviour in the City of London, it is likely that there will be more of a requirement to accommodate functional, convenient retail space than the larger store footprints which are home to a full product range.


2 INTRODUCTION 2.1 CITY OF LONDON TODAY

The City of London is a unique location with a world leading reputation as an international financial and business services centre. Central to this position is a core of c.8.7m sqm of high quality office space, the key driver behind retail demand in the area.

The residential population in the City is known to be less than 10,000 and with a daily worker population over 65 times this figure, the nature of retail demand in the Square Mile is vastly different to that seen elsewhere in the UK.

The significant worker population in the City drives a predominantly five-day trading week for its occupiers. Outside of the peak Monday-Friday lunchtime hours, a number of locations in the City cater well for evening trade with a high number of A3-A5 operators; however, a large proportion of these businesses, coupled with the A1 operators, close at weekends owing to considerably lower levels of footfall.

Workers and residents aside, another revenue stream for occupiers in the City is from tourism – particularly in key retail locations in close proximity to major attractions such as St. Paul’s Cathedral. It is estimated that the City attracts a c.3% share of London tourist visits, with over 10 million visits recorded in 2015, many of which were day visitors. The City of London Corporation has set out plans to develop Cultural Mile, a concentration of cultural and artistic activities in the Smithfield area which will include a new home for the Museum of London and a new concert hall on London Wall. This will further improve the draw of the City of London to both day and overnight visitors, at a time when tourist visits to London are estimated to grow between 3-4% every year to 2025.

In an increasingly uncertain market, the City of London has remained buoyant and has continued to evolve. Q2 2017 witnessed over 110,000 sqm of take up of office space which represented the second highest quarterly figure in 12 months. Furthermore, the Media & Tech sector is driving this demand in face of weakening take-up from the Financial Services sector.

Demand for office space in the City of London remains high and is a driving force behind the significant amount of space currently under construction or at the planning stage. The backdrop to this is significant investment both in transport infrastructure and public realm which have, in turn, given the City of London the strongest platform from which retail can continue to flourish up to 2036.

2.2 CURRENT PLANNING POLICY CONTEXT The London Plan 2016 and the City of London Local Plan 2015 currently form the backbone of the existing development plan for the City up to 2026. In context of a full review of the London Plan, the City of London Corporation are preparing a full review of their Local Plan up to 2036.


The existing Local Plan for the City of London sets out the following policies:

• Designate Cheapside, Fleet Street, Moorgate, Liverpool Street and Leadenhall Market as “Principal Shopping Centres” (PSC’s).

• Focus new retail development in Principal Shopping Centres to ensure a coherent pattern of retailing in the City.

• Maintain a predominance of A1 shops in Principal Shopping Centres whilst promoting a variety of A1 shop types elsewhere in the City to increase choice and diversity.

• Improve links between Principal Shopping Centres by encouraging additional retailing along identified retail links which connect them.

• Strengthen retail character and pedestrian environment within Principal Shopping Centres and the links between them.

• Encourage the development of the City as a retail destination in the evenings and at weekends.

• Protect existing local retail facilities outside the Principal Shopping Centres but discourage a significant increase there.

It is intended that this retail needs assessment review will support the City of London in its review of these core policies and will provide evidence to support the growth, development and enhancement of retail provision across the City up to 2036.


3 THE BRIEF 3.1 PURPOSE OF THE STUDY

Colliers International have been instructed by the City of London Corporation to undertake this study, assessing existing and future retail provision within the City up to 2036.

Supporting the review of the City of London Plan, the purpose of the study is to:

1. Identify and assess the existing supply and future needs (in quantitative terms) for new retail floorspace in the City of London.

2. Identify the capacity of the City of London’s Principal Shopping Centres to accommodate this demand or the need for further provision on the fringes of these centres or elsewhere in the City.

3. Establish the type of additional retailing that should be provided in the City as a whole and in each Principal Shopping Centre to 2036.

4. Provide advice to the City of London Corporation on future retail trends and how they will impact on the retail offer in the City of London.

Alongside the delivery of this study, the GLA have also commissioned a retail study to assess trends across London up to 2041. This study will address the scale and nature of retail expenditure in London at a borough and individual centre level.

3.2 ANSWERING THE BRIEF Colliers have summarised the key aims of the assessment into four key areas, for each PSC. More detail on the data sources and the techniques employed can be found in Section 4.

• Purpose

o Led by primary data collected through on-street surveys. This gives evidence as to the purpose of each PSC and how it serves its catchment, by providing key insights such how each location is shopped, by who and when.

• Supply

o Following an audit of each PSC, this section provides an up to date assessment of current retail supply and a breakdown of existing provision by occupier type.

• Demand

o This section combines multiple data sources to estimate and benchmark the current and future population within each PSC catchment, split by visitor type.

• Recommendations


o For all PSCs, Rest of The City / links with market facing input from agency team.


4 DATA & METHODOLOGY 4.1 SUMMARY

Due to the unique nature of The City of London, a ‘typical’ capacity study methodology in which recommendations are underpinned by an assessment of current and future expenditure would deliver an ineffective output.

Expenditure based capacity studies depend both on an accurate forecast of population and expenditure, by visitor type. Reliance upon measures of expenditure by visitor type, in a location where the diversity in visitor types and shopping missions is considerably greater than a ‘typical’ UK shopping destination, would not deliver a meaningful output and would be further exacerbated up to 2036.

Therefore, an assessment and forecast of expenditure has not been used to support the policy recommendations in this study. The bespoke approach adopted in this study leverages City of London, GLA and Colliers data to best inform the nature of population change for each PSC and provide an up to date view of existing retail and leisure stock to form a ‘retail supply ratio’ to assess over / under supply up to 2036.

Central to the approach for this study is an assessment and forecast of the working population, both in the City of London as a whole and within the catchments of each PSC. This approach puts the key driver of demand for retail space (City of London workers) at the centre of the analysis, and is supplemented with further analysis of retail demand driven by residents and tourists. This methodology also enables a review of existing stock in light of current and future demand outside of each PSC catchment, including ‘links’.

Given the unique nature of this study, a qualitative approach has also been adopted to support the final recommendations. The Colliers Central London Retail Agency team have given market facing input, from the occupier side, providing insights on demand, availability and operator requirements to support future policy.

As set out in sections 4.2 and 4.3, the data and methodology used in the study draws on accurate and readily available data from a range of sources including the City of London Corporation, third party providers, in-house data available to Colliers and primary data collected through on-street surveys at each PSC.


Leadenhall Market Cheapside Liverpool St /

Moorgate Fleet Street Rest of City Total

Worker Interviews 54 33 59 60 46 252

Workers in KCP Boundary 45 22 54 57 - 178

% Workers in KCP Boundary 83% 67% 92% 95% - 71%

City of London Workers: 252

4.2 DATA

4.2.1 DEFINING PSC CATCHMENTS

Central to the study is a review of the office worker population both across the City and in close proximity to each PSC. To assess retail demand and future need at each PSC, a clear definition of the worker catchments they serve must be achieved (referred to as the ‘PSC catchments’).

Through ‘Key City Places’ and their subsequent sub-areas, the City Corporation has defined the core areas for office stock across the City. The Key City Places are distinct areas in their own right, with their own set of characteristics, both in terms of their total office stock/pipeline and retail demands.

Key City Places boundaries, or a combination of sub-areas serve as the most effective method of defining the spatial extent of each PSC catchment and have been adopted in this study. The primary justification for this is the results of the on-street surveys at each PSC which are stated in the table below. This analysis, of all City of London workers interviewed in the on-street surveys confirmed that over two-thirds of respondents at each PSC work within the respective Key City Place boundary (see figure 1 below).

Maps have been provided in the appendix which state the work location of all workers who took part in the on-street surveys at each PSC (see maps 2-5). The darker dots on these maps indicate where the same work place postcode has been given in more than one interview.

Figure 1 – Percentage of Workers Within Each KCP Boundary

Secondly, the KCP boundaries are approximately 500m from the central point or ‘prime pitch’ of each PSC. This also makes them credible boundaries for an assessment of retail demand as this distance is often considered as the maximum catchment size for a retail operator trading in The City.

Although it is recognised that Liverpool Street and Moorgate serve different functions today, for the purposes of this analysis Moorgate and Liverpool Street have been combined into one PSC, primarily due to geographical proximity. However, significant development both above and below ground, will also see greater connectivity between these two areas up to 2036 - a cohesive view, from a planning perspective should look to reflect this.

For reference, the PSC catchments used in this study are outlined in Figure 2 below and in Map 1 in the appendix.

Figure 2 – PSC Catchment Definition


4.2.2 STUDY DATA SOURCES

The data used in the quantitative element of this study is set out in Figure 3 below. The study draws upon a range of sources, at varying levels of granularity. Where necessary, Colliers have sought data for London boroughs to serve as a benchmark, in order to place the City of London’s retail and office stock into wider context.

Figure 3 – Study Data Sources and Granularity

4.3 METHODOLOGY In order to achieve key aims 1-3 of the study, as set out in section 3.1, a five stage methodology has been adopted which uses all data and PSC catchments set out in section 4.2.

A methodology flow chart has also been provided in the appendix (section 7.6), for reference.

4.3.1 STAGE 1 – FORECASTING DAILY POPULATION AND THE RETAIL SUPPLY RATIO

Prior to the quantitative analysis, a retail audit was undertaken for all key PSC streets in the study. Using Experian Goad data as the base, the audit provided a fully up-to-date view of retail


PSC CatchmentCurrent Office

Floorspace (Sqm)

Current Total Workers

Office Floorspace /

Worker (Sqm)

Pipeline Office Floorspace 2026 (Sqm)

Worker Population

(2026)

Worker Population

(2036)

Cheapside 862,292 35,595 24.2 94,832 39,306 41,161

Liverpool St & Moorgate 2,162,371 117,596 18.4 334,731 134,854 143,482

Leadenhall Market 1,243,917 55,867 22.3 470,199 75,887 85,897

Fleet Street 1,152,732 76,048 15.2 97,020 82,116 85,150

Rest of the City 3,237,539 197,893 16.4 986,103 255,034 283,605

Total 8,658,851 483,000 17.9 1,982,884 587,196 639,295

stock and the occupier mix present across prime shopping streets within each PSC boundary (by unit count and sqm of floorspace).

Map 6 in the appendix outlines the prime streets surveyed in each PSC in the audit. All streets that have not been regarded as prime within each PSC boundary have still been included in the retail stock figures for analysis and have been audited by Experian within the last 12 months.

WORKER POPULATION

Data has been provided by The City of London which states current office floorspace and worker population within each PSC boundary. This is based on BRES data for 2016, which indicates City employment at 483,000. This data gives a view on floorspace / worker density and forms the base of the worker population forecast up to 2036.

Using the Colliers Central London Office Pipeline, which tracks all developments up to 2026, net new office floorspace has then been mapped across The City and summed for all PSC catchments and ‘Rest of The City’. The worker population, up to 2026 has then been calculated using the net additional office floorspace figures from the pipeline and 2016 floorspace density, for each PSC (see figure 4).

Beyond 2026, this study assumes growth in the office stock will not be as high. Whilst it is likely that further developments will emerge and / or the timings of planned developments may slip, a significant number of major towers are in the pipeline for completion prior to 2026 (see appendix 7.8). A realistic scenario has therefore been made for the delivery of new office stock between 2026-2036 at half the space delivered in the 10 years prior, subsequent estimations of additional workers have then been estimated using 2016 office floorspace densities.

The estimated worker population figures have also been sense checked against evidence provided by the GLA. For reference, GLA 2017-based employment projections suggest City employment in 2026 at 569,000 and 643,000 in 2036. Whilst there is not a precise match, there is a consistency in terms of significant projected growth in employment to 2026 and through to 2036.

For parity against the 2016 BRES data - the worker population forecast for the City and for each PSC up to 2036 is inclusive of an office vacancy rate of 5.2%. This figure is the latest vacancy rate for the City today, provided by the Colliers Research team.

The output of this analysis is summarised in figure 4 below and the Colliers Central London Office Pipeline can be found in appendix 7.8, for reference.

Figure 4 – Worker Population Forecasts by PSC


PSC CATCHMENT Cheapside Fleet StreetLiverpool Street /

Moorgate

Leadenhall Market Rest of City Total City

Residential Stock (No. of Units) 111 746 409 49 5,764 7,079Residential Population (2015) 113 762 418 50 5,891 7,235

Projection to 2026 128 1,188 505 52 7,583 9,457Projection to 2036 141 1,303 554 57 8,315 10,370

Proportion of Total City Pop 1% 13% 5% 1% 80%

RESIDENTIAL POPULATION

Current residential population figures and total housing stock for the City as a whole have been provided by the GLA and City Corporation, for use within the analysis.

GLA 2015-based projections indicates a total residential population for The City of 7,235 and City Corporation data states a total of 7,079 residential units, providing an average of 1.02 residents per unit. Residential population for each PSC catchment and Rest of The City for 2015 has then been estimated using the total residential units and The City average residents / dwelling.

Residential population projections from the GLA for The City as a whole for 2026 and 2036 are 9,457 and 10,370 respectively. Based on the proportion of the overall City residential population within each PSC in 2015, the GLA forecasts for 2026 and 2036 have then been allocated to each PSC / Rest of City catchment. See figure 5 below.

Figure 5 – Residential Population Forecasts by PSC

TOURIST POPULATION

The most recent estimate for tourist visitors to The City of London as a whole is 10.34m (2015) and data is not available on visitor numbers by attraction. However, insights have been taken from the surveys at each PSC in order to provide a view of tourist visitor numbers within each PSC catchment.

Figure 6 provides a breakdown of the total number of interviews which took place at within each PSC and splits these interviews between UK residents and Non-UK residents. A total of 715 interviews took place of which 138 (19%) were Non-UK residents, however the proportions of Non-UK residents varied across the PSCs.

The proportions of Non-UK residents, as set out in the ‘Study Assumptions’ column in figure 6 have been used to allocate total visitor numbers to The City across each PSC, these are inclusive of a small allocation of 10% to non-PSC locations where no interviews took place but visitor attractions are present such as Barbican, Smithfield Market and Tower of London which falls just outside The City boundary in the south east.


PSC Total Tourists %£0 % >£5 %>£10

Cheapside 40 10% 85% 78%Fleet Street 36 50% 42% 28%Leadenhall 78 55% 35% 21%

Liverpool St / Moorgate 61 33% 61% 54%City of London 215 40% 53% 42%

% Spend

Study Assumptions

UK Resident

Count

Non-UK Resident

Count

Non-UK Resident

(%)

Non-UK Resident (%)

Cheapside 116 22 16% 14%Fleet Street 140 21 15% 13%

Leadenhall Market 143 50 36% 34%Liverpool St / Moorgate 178 45 33% 30%

Rest of City (Est.) - - - 10%Total City of London 577 138 100% 100%

Survey Results

PSC Catchment

Total Cheapside Fleet StLiverpool Street &

Moorgate

Leadenhall Market Rest of City

Tourists 10,340,000 1,402,831 1,327,903 3,500,802 3,126,164 982,300 Spending Tourists 5,500,391 1,192,406 557,719 2,135,489 1,094,157 520,619 Spending Tourists / Day 15,070 3,267 1,528 5,851 2,998 1,426 Tourists 17,474,600 2,370,784 2,244,157 5,283,217 5,916,355 1,660,087 Spending Tourists 9,131,045 2,015,166 942,546 3,222,763 2,070,724 879,846 Spending Tourists / Day 25,017 5,521 2,582 8,829 5,673 2,411

2015

2036

Figure 6 – Non-UK Residents Interviewed at PSC

The

next stage of the analysis leverages insights from the on-street surveys to understand what proportion of tourist visitors at each PSC actually spend on their visit to The City. The table in figure 7 below states the number of tourists interviewed at each location and the proportion of which have spent / will spend £0, greater than £5 and greater than £10.

A ‘spending tourist’ population for each PSC and rest of The City has then been calculated based on the proportion of visitors that spent over £5. Adding in this ratio is an important part of the analysis as it is vital that any policy recommendations made relating to future retail demand, that is inclusive of tourist visitors, acknowledges only those who spend.

Figure 7 – Tourist Spending Behaviour by PSC

Figures quoted in the worker and residential population tables above (figures 4 & 5) refer to an approximate daily population for each PSC and rest of The City. The final stage for forecasting current tourist population by PSC is to divide the assumed annual number of spending tourists in each location through 365 days of the year. The final tourist numbers by PSC and rest of The City, for use within the analysis, are stated in figure 8 below.

Figure 8 – Forecast Tourist Population by PSC


Group Total Cheapside Fleet StLiverpool Street &

Moorgate


Workers 483,000 35,595 76,048 117,596 55,867 197,893Residents 7,235 113 762 418 50 5,891

Spending Tourists / Day 15,070 3,267 1,528 5,851 2,998 1,426Total Daily Population 505,305 38,975 78,338 123,865 58,915 205,210Total Retail Stock (m2) 410,773 97,050 35,070 67,930 40,900 169,823

Retail Supply Ratio (m2/head) 0.81 2.49 0.45 0.55 0.69 0.83

Looking ahead to 2036, a cautious approach should be taken when accounting for tourism spend in a context of an assessment of future retail capacity. Tourist visits can be volatile and reliant on a number of external market conditions such as the value of the pound, visa restrictions and the cost of travel. The growth assumptions used in this analysis also don’t take account of the Culture Mile initiative and the potential impact this will have in generating increased tourism visits to The City.

Visit Britain forecast an annual growth rate of tourist visits to London of 3.5% up to 2025, which has been assumed in the base of the forecast by PSC. Average annual growth rate of London tourist visits over the last 10 years (2006-16) has been 1.5%, this rate has then been applied to the tourist population forecasts beyond 2025.

TOTAL DAILY POPULATION AND RETAIL SUPPLY RATIO

A retail supply ratio (sqm / head) has then been established for the City of London as a whole and for each PSC using the calculated population figures and retail stock data from Experian / Colliers audit.

The ratio provides the first measure of retail supply for each PSC, for comparison against the City of London average and is stated in figure 9 below.

Figure 9 – Total Daily Population and Retail Supply Ratio

The final component of this stage blends worker and residential population counts, with a calculation of daily tourist visitors and total retail stock data for three other Central London locations. The three benchmark locations - Fitzrovia, Holborn and Victoria – provide credible benchmarks for the City retail supply ratio based both on their high workforce densities and the subsequent mix of retail that serves their respective worker population catchments.

Figure 10 below states the workforce population per m2 and the total retail stock, per head across the different retail sectors, for The City and the selected benchmark locations. Whilst The City is unique both in terms of workforce density and retail mix, similarities can be drawn – particularly in terms of workers per m2 where the City is in line with Fitzrovia and Holborn. Total area as indicated in figure 10 below refers to the total size in m2 of The City as a whole and within the set boundaries of the benchmark locations, as outlined in map 7 in the appendix. The boundaries used for the benchmark locations in this analysis are based on groups of postcode sectors and are recognised districts throughout all Colliers research reporting.

High provision of F&B against comparison goods space is typical for a retail mix that serves a predominantly worker based catchment. This is evident across all benchmark locations, with the


Location Workers Total Area (m2) Workers / m2 Comparison F&B Services Grocery

City of London 483,000 3,152,906 0.15 0.13 0.31 0.12 0.03Fitzrovia 135,460 781,062 0.17 0.41 0.30 0.08 0.06Holborn 126,113 687,476 0.18 0.09 0.14 0.06 0.02Victoria 123,105 2,166,281 0.06 0.21 0.22 0.06 0.07

Worker Density Retail Mix (m2/head)

LocationRetail

Floorspace (sqm)

Workers Residents Tourists Ratio

Fitzrovia 142,520 135,460 10,215 5,808 0.94City of London 410,773 483,000 7,235 15,070 0.81

Holborn 85,270 126,113 3,047 8,712 0.62Victoria 97,320 123,105 39,774 1,597 0.59

exception of Fitzrovia which includes a high number of comparison goods operators trading on Tottenham Court Road.

Figure 10 – Worker Density and Retail Mix – The City vs Benchmark Locations

Total annual tourist visits to Fitzrovia, Holborn and Victoria are available on the websites of their respective BID’s and form the base of the calculations for daily tourist visitors in figure 11 below.

Retail stock data for each location has then been extracted from Experian Goad in order to calculate the retail supply ratio for direct comparison against The City of London ratio. See figure 11 below.

Figure 11 – Daily Population and Supply Ratio for City of London Benchmarks

4.3.2 STAGE 2 – ESTABLISHING THE FUTURE SUPPLY RATIO

The second stage of the analysis is an assessment of the City of London’s existing retail supply, in the context of the selected benchmark locations.

The retail supply ratio for The City as a whole and for individual PSCs cannot be used in isolation to establish over / under supply of retail space today. These measures require context against comparable locations, both in terms of proximity and the nature of demand, to make the best assessment of over / under supply of stock. Placing retail capacity for The City today into wider context acts as a control to ensure that recommendations up to 2036 are realistic and in-line with similar / neighbouring retail locations.

As outlined in figure 11, The City of London as a whole has a supply ratio of 0.81 which places it at the higher end when compared against the benchmark locations. However, as shown in figure 9, this ratio is largely driven by a high level of supply in Cheapside against all other PSCs and rest of The City.

Whilst the retail supply ratio is at the higher end, the benchmark locations still provide evidence that there is scope for further growth in retail supply in the City today. However, it should be noted that a future supply ratio that exceeds the benchmark locations (i.e. an oversupply) in practice will see occupiers in The City trade at lower sales densities when compared to other


Group CURRENT 2036 CHANGEWorkers 483,000 639,295 156,295 Residents 7,235 10,370 3,135 Spending Tourists / Day 15,070 25,017 9,947 Total Daily Population 505,305 674,682 169,377 Total Retail Stock 410,773 607,213 196,440

Retail Supply Ratio 0.81 0.90 11%

locations. Therefore, a selective approach is necessary when addressing future retail stock across the individual PSCs - delivery of future stock focussed in areas where future population growth is highest and / or supply is low.

It is recommended that the supply ratio target for The City as a whole in 2036 should be 0.90. There are four core justifications behind this:

• A future supply ratio of 0.90 would keep The City in line with the benchmark locations whilst strengthening total provision for the current population.

• A selective increase in delivery of new retail stock across the PSCs will allow new demand to be adequately met but will strengthen positioning and quality of retail provision of the City against the benchmark locations.

• A c.10% increase in the retail supply ratio, when spread across four PSCs and in context of a large growth in demand up to 2036, is considered to be both achievable and sustainable.

• A rise to 0.90 results in the delivery of a significant volume of new stock up to 2036. This will place The City in line with benchmark locations, some of which have undergone considerable and recent redevelopment thus provide credible benchmarks for a future supply ratio.

Retail supply ratios, by PSC and rest of The City are underpinned by the future ratio of 0.90 for the City as a whole and are addressed in 4.3.4.

4.3.3 STAGE 3 – ESTABLISHING FUTURE CITY OF LONDON RETAIL STOCK

Stage 3 of the analysis blends both the total population figures (current and future) calculated in Stage 1 and the retail supply ratio (current and future) calculated in Stage 2.

Combining these two stages provides a figure for total retail stock requirements in the City as a whole up to 2036, taking account of the future growth in worker, residential and tourist populations, and the subsequent demand for retail.

Figure 12 below outlines the assumed change in total daily populations today, following completion of all known office schemes under construction and in the pipeline and further assumptions up to 2036.

With a future retail supply ratio of 0.90 sqm/head and an anticipated rise in total daily population of 169,000, the City of London Corporation should target the delivery of a minimum of 196,000 sqm of additional retail space, to adequately meet future demand.

Figure 12 – Future Retail Stock Requirements for The City of London


Category City of London Cheapside Fleet St

Liverpool Street &

Moorgate


Current 0.81 2.49 0.45 0.55 0.69 0.83Future 0.90 2.36 0.69 0.74 0.74 0.87

Variance 0.09 -0.13 0.24 0.19 0.04 0.04

4.3.4 STAGE 4 – FUTURE RETAIL STOCK BY PSC

The penultimate stage of the analysis is to allocate the additional retail stock required for the whole of the City across its PSCs and rest of The City.

To determine these allocations, two considerations have been given;

1. The existing Retail Supply Ratio for each PSC, against the City of London average;

2. The location of new retail demand, driven primarily by office developments.

Figure 13 – Current and Future Retail Supply Ratio by PSC

In light of current PSC Retail Supply Ratios outlined in figure 9, and accounting for the location of future office stock across the City, the allocation of the additional retail stock has been weighted towards the PSCs carrying the greatest worker / resident catchment size. This ensures that new retail stock best meets future demand from new office developments and improves provision in the PSC catchments which currently sit below the City of London average.

This stage of the analysis is purely quantitative and does not account for the ability to deliver additional stock in each PSC nor does it account for the current nature of demand and need in terms of occupier mix. Initial comments on the new stock allocations above are listed out below, final recommendations for new retail space are made in the PSC overviews in section 5.

Cheapside is the only PSC which has a retail supply ratio greater than The City average, largely due to One New Change. The remaining PSCs all currently provide <1 sqm per head of population.

The Liverpool St/Moorgate and Leadenhall Market PSCs have densely populated catchments, resulting in a greater demand for retail and a below average Retail Supply Ratio. There remains an opportunity to increase retail supply, particularly in light of the significant office developments which are due to be completed within their respective catchments.

The Retail Supply Ratio for Fleet Street is low compared to the City of London average, driven by a high worker population, particularly when compared against Cheapside. However, its proximity to Cheapside should be considered when assessing future allocation of retail stock.

The current retail supply ratio for Rest of the City sits broadly in line with the City average. However, this area covers a large geography and includes 44% of the total population for the City. A significant volume of new stock has been allocated to this area, driven by a high number


Total Cheapside Fleet StLiverpool Street &

Moorgate

Leadenhall Market

Rest of The City

Workers 639,295 41,161 85,150 143,482 85,897 283,605 Residents 10,370 141 1,303 554 57 8,315 Spending Tourists / Day 25,017 5,521 2,582 8,829 5,673 2,411 Total 674,682 46,823 89,035 152,865 91,627 294,331

7% 13% 22% 14% 44%

Additional Retail Stock (sqm) 196,440 13,633 25,924 44,508 26,678 85,698

Proportion of CoL Workers, Residents & Tourists

of new developments. New retail stock in Rest of the City should be prioritised in locations where new developments will be delivered and will witness a rise in demand for retail – this is analysed in more detail in Section 5.

Figure 14 provides a breakdown of the future population within each PSC catchment and the proportion of the overall City of London population which they carry. These proportions have been used to weight the total allocation of 196,440sqm of additional floorspace by PSC.

Figure 14 – Future Population and Retail Stock Requirements by PSC to 2036

4.3.5 STAGE 5 – FUTURE RETAIL MIX BY PSC

The final stage of the retail needs assessment methodology is to determine the appropriate future mix of retail and leisure across each PSC.

A quantitative assessment alone would be a less effective methodology to determine the optimum retail mix. This would overlook key insights such as how each PSC is shopped by its local population and current trends in the occupational market. Building in qualitative insights into future assumptions on retail mix ensures that future strategy is bespoke to each PSC, targeted directly at how shoppers use the location and will drive a more efficient use of new space.

Stage 5 of the methodology, summarised for each PSC in section 5 of this report, combines quantitative evidence such as existing provision by category for comparison against both the City of London and benchmark location averages to give an initial view on existing over / under provision of retail category by PSC.

In the qualitative assessment for optimum future retail mix within each PSC, key insights have been taken from the surveys regarding visitor demographics, visit purpose, frequency and tourist demand, combined with an assessment of the nature of occupier demand from the Colliers Central London Retail agency team.


Current Floorspace (Sqm)Pipeline Floorspace (Sqm)Future Stock (Sqm)Workers (2016)Residents (2015)Spending Tourists / Day (2015)TotalWorkers (2036)Residents (2036)Spending Tourists / Day (2036)Total

Change to 2036

Current FloorspaceFuture Floorspace

Change to 2036 (Sqm) Benchmark Av.

2017 SQM / POP 2.49 207% 0.45 -44% 0.55 -32% 0.69 -15% 0.83 2% 0.72036 SQM / POP 2.36 162% 0.69 -23% 0.74 -18% 0.74 -18% 0.87 -3% -

Comparison 0.61 372% 0.06 -54% 0.09 -31% 0.15 15% 0.08 -38% 0.23F&B 0.71 129% 0.18 -42% 0.21 -32% 0.29 -6% 0.35 13% 0.22Services 0.48 301% 0.12 0% 0.10 -17% 0.05 -58% 0.10 -17% 0.07Grocery 0.13 341% 0.03 0% 0.02 -33% 0.01 -67% 0.04 33% 0.05

City of London Total Cheapside Fleet St Liverpool Street &

MoorgateLeadenhall

Market Rest of The City

Office Supply8,658,851 862,292 1,152,732 2,162,371 1,243,917 3,237,5391,982,884 94,832 97,020 334,731 470,199 986,10310,641,735 957,124 1,249,752 2,497,102 1,714,116 4,223,642

Demand

483,000 35,595 76,048 117,596 55,867 197,8937,235 113 762 418 50 5,891

15,070 3,267 1,528 5,851 2,998 1,426505,305 38,975 78,338 123,865 58,915 205,210639,295 41,161 85,150 143,482 85,897 283,60510,370 141 1,303 554 57 8,31525,017 5,521 2,582 8,829 5,673 2,411674,682 46,823 89,035 152,865 91,627 294,331

Retail Mix - Supply Ratios

0.810.900.130.310.120.03

169,377 7,848

196,440 13,633

89,121

Retail Supply

410,773 97,050 35,070 67,930 40,900 169,823607,213 110,683 60,994 112,438 67,578 255,521

25,924 44,508 26,678 85,698

10,697 29,000 32,712

5 PSC OVERVIEWS 5.1 SUMMARY

This section provides a summary of both the quantitative and qualitative analysis relating to future retail demand for each City of London PSC. As set out in section 3.2 and for each PSC below, the approach to achieving the key aims of the brief has been to split into four areas – Purpose, Supply, Demand and Recommendations.

For each PSC and Rest of The City, a summary key headlines from the on-street surveys has been provided in addition to the outputs from the quantitative supply/demand analysis and market facing commentary from the Colliers Central London Retail Agency team. A matrix has also been produced which outlines themes across all PSCs for the key metrics collected from the on-street surveys, this is located in the appendix alongside a full breakdown of the survey results (see appendix 7.11). The appendix also includes a table by the Central London Retail Agency team which provides a detailed breakdown of the type of requirements by operator type today, this is to be considered alongside the recommendations for future mix and within the final plan (see appendix 7.12)

Figure 15 below provides a full breakdown of the quantitative outputs for reference throughout this section. All retail types included in the retail mix assessment in Figure 15 below have been defined in the appendix along with respective sub-categories (see appendix 7.10).

Figure 15 – Quantitative Supply / Demand Output by PSC, including Retail Mix Comparisons


5.2 CHEAPSIDE

5.2.1 PURPOSE

Key Points

• Cheapside is ‘The City’s High Street’, the biggest draw to the PSC is for shopping.

• Whilst the worker population is the main driver of demand in Cheapside, the visitor profile is more diluted than other PSCs due to higher proportions of tourists.

• Cheapside is in a good position to establish a truly 7-day economy; a third of visitors already visit in the evening at least once a month and there is demand to create more of a retail/F&B destination.

Survey Summary

Cheapside plays a vital role in the retail landscape of The City, its primary purpose is as a destination for comparison goods shopping. With over 97,000sqm of retail floorspace currently, the Cheapside PSC ranks the highest in The City for overall retail provision, outlining its function as The City’s High Street.

The visitor surveys also provide evidence which support Cheapside as the primary shopping destination in The City, whilst highlighting key differences against other PSC’s.

• Cheapside serves a wider catchment than other PSC’s. 33% of workers interviewed on

Cheapside worked outside of the PSC catchment boundary – higher than any other PSC and driven by the strength of the comparison goods offer.

• The main draw for visitors to Cheapside is for Shopping. 38% of all visitors to Cheapside were there to shop compared to The City average of 15%.

• Average spend per visitor on retail goods at Cheapside was £91.40, considerably higher than the survey average of £64.36. In reflection of One New Change’s offer, the largest spend category is Comparison Goods, with less being spent on F&B and Grocery.

Whilst the worker population is the main driver of demand in Cheapside, the visitor profile is more diluted than other PSCs due to tourists, given the proximity to St Paul’s Cathedral. This is also reflected in the below-average frequency of visit (108 visits per year, 9% below the survey average).

Average spend is much higher at the weekend; £108 versus £34 during the week. Although volumes of shoppers will be significantly higher during the week, this indicates that Cheapside (and more specifically, One New Change) is serving a functional purpose for workers during the week and becomes more of a destination for visitors at the weekend. This is important to note as it demonstrates that the area is a strong location to create a seven-day economy. Additionally, it also affects the type of retail that would be recommended in this location.


Cheapside’s catchment is less tight than the likes of Fleet Street and the area can accommodate more Comparison Goods, F&B, retailers that encourage browsing etc. rather than being limited to serving a much more functional role of other locations.

Currently, 30% of respondents visit the area in the evening at least once a month; the second most popular PSC to do so (after Liverpool Street). The biggest draw for people to visit more often during the evenings or weekends would be more retail and more events/attractions.

5.2.2 SUPPLY / DEMAND

Key Points

• Estimated change in total daily population of 7,848 to 46,823 up to 2036, driven by delivery of c.95,000sqm pipeline of offices in the PSC catchment and a significant growth of spending tourists due to proximity to St Pauls.

• Ranked 1st in the City of London based on current retail floorspace (97,050sqm).

• Based on quantitative analysis, the future additional floorspace requirement is a minimum of 13,633sqm to deliver adequate provision for a rise in the daily worker and tourist population.

• The quantitative analysis results in a minimum additional floorspace requirement for Cheapside, based on the future demand from the daily population within the catchment. Future policy should consider this requirement as a minimum, particularly in light of the wider catchment compared with other PSC’s (see page 21).

• Above average provision of Comparison Goods space against the City of London ratio (0.61 vs 0.13) and against the Central London benchmark locations (0.61 vs 0.23).

• Above average provision of F&B space against the City of London ratio (0.71 vs 0.31) and against the Central London benchmark locations (0.71 vs 0.22).

5.2.3 RETAIL AGENCY VIEWPOINT

SUMMARY

Our view is that Cheapside has the capacity for more retail and restaurant space, particularly in light of its broader catchment size in comparison to other locations in The City and its role as the primary shopping destination. Furthermore, there is scope for Cheapside to become a truly 7 day-a week location following the delivery of Culture Mile which will draw more tourists from St. Pauls towards Barbican via Cheapside. However, in the short term Liverpool St / Moorgate presents a stronger case 7 day-a week trading for occupiers given the proximity to Shoreditch and Spitalfields and the delivery of Crossrail on its doorstep.


AVAILABILITY NOW

Availability at present is very limited and the last significant letting, the former Banana Republic, demonstrate active demand from good quality retailers in the area (Nespresso, Body Shop and Molton Brown).

Availability of space over the past 10 years has increased significantly with the opening of One New Change, this is now fully let to a range of retail and restaurant operators.

Crossrail should also benefit Cheapside and with the continued significant investment (Bloomberg and The Ned) should serve to ensure availability is absorbed relatively quickly.

QUALITY OF STOCK

Due to the significant amount of development on Cheapside over the past 10-15 years, the quality of stock is good, with buildings constructed with retail and restaurant uses at ground floor taken into account at the design stage.

Bow Lane offers a very good differential to Cheapside by offering characterful small retail and restaurant units on an attractive pedestrian street, which helps to vary the overall tenant mix, and enable smaller independent operators to trade in the location – all key to appealing to the consumer.

QUALITY OF DEMAND

The quality of demand is varied and encompasses most types of uses. A1 food remains very prominent, but One New Change, Cheapside and Bow Lane all have a relatively good mix demand from fashion and accessories and beauty operators.

ACCOMMODATING FUTURE DEMAND

Our view is that the area between the western part of Cheapside and Farringdon should be monitored closely. This area is set to benefit from the opening of Crossrail (eastern entrance) and the development of the Culture Mile initiative, which should create a new pedestrian flow to Cheapside through Aldersgate and Little Britain.

5.2.4 RECOMMENDATIONS FOR CITY OF LONDON

• Current retail supply ratio of 2.49m/head is considerably above the City of London average. Cheapside has therefore been allocated a relatively low proportion of the total future new retail stock through the quantitative analysis, which will reduce its retail supply ratio to 2.36m/head.

• Therefore, a minimum target of 13,633sqm should be considered up to 2036 to satisfy new demand from the uplift in daily population in this PSC alone. Future policy should consider this a minimum, particularly in light of the broader nature of the Cheapside catchment compared with other PSC’s.


• There is a significant number of pipeline developments in the neighbouring Fleet StreetPSC. Considering the feasibility of delivery of new stock in this area, future policy forCheapside should be flexible to accommodate additional stock in Cheapside to alsoserve Fleet Street.

• New retail stock in Cheapside must focus on delivering F&B operators, withComparison Goods stock less of a priority.

• The key recommendation for the area is to accommodate new retail stock between theWestern part of Cheapside and Farringdon Crossrail Station. This is an area thatshould experience an increase in pedestrian flow, and therefore represent anopportunity to increase the retail and restaurant accommodation to meet demand.


5.3 FLEET STREET

5.3.1 PURPOSE

Key Points

• Fleet Street is a worker-centric location which is currently limited to serving a tight,convenience-driven catchment.

• Visitor behaviour is characterised by high weekday frequency and relatively low retailspend.

• There is some demand to create more of a retail hub in this PSC; however, given theproximity of Cheapside and nature of behaviour within the Fleet Street catchment, thescope for new retail stock is limited.

• Future focus should be to strengthen the F&B offer to cater for a very high workerpopulation and reduce leakage to neighbouring locations.

Survey Summary

Out of all of the PSCs, Fleet Street contains the second highest proportion of visitors who are in the area for business and the second highest proportion of people who visit five times a week (both behind Moorgate). This PSCs primary use is therefore focussed on workers and is expected to be the most challenging location to adopt a 7-day economy. Limited provision and relative lack of late opening hours means that there is minimal trade occurring during the evenings or weekends.

The retail mix on Fleet Street is centered around F&B; this is reflected in the average retail spend which is lowest out of all of the PSCs for all categories apart from Grocery. Additionally, no respondents that were interviewed used the area in evenings or weekends as many of the occupiers are closed outside of working hours. On this basis, the area would need significant development in order to create a real evening and weekend destination. Fleet Street is further challenged with a lack of pedestrianisation and the busy main road creates a barrier from one side of the street to the other, making it feel like less of a cohesive area.

Survey research shows that there is demand to create more of a retail hub in Fleet Street, however given the proximity of Cheapside it is unlikely that there is scope to establish a similar offer. Current demand is likely to be leaking to the relatively newly established link between Fleet Street and Cheapside PSCs which features a good quality F&B offer. Therefore, strengthening F&B provision and investment in public realm should be the central vision for the street in order to meet a significant growth in worker population and reduce leakage to neighbouring locations.


Key Points


• Estimated change in total daily population of 10,697 to 89,035 up to 2036, driven by delivery of c.97,000sqm pipeline of offices in the PSC catchment.

• Smallest PSC in terms of total retail floorspace, a total of 35,070sqm. • Future additional floorspace requirement of a minimum of 25,924sqm to deliver

adequate provision for rise in worker population. This is based purely on the quantitative analysis and is a reflection of its low retail supply ratio of 0.45 – lowest of all PSCs.

• Delivery of future retail stock up to 2036 in this location should be made flexible in future policy and should be considered alongside growth at Cheapside to ensure a point of difference is maintained in terms of nature of future provision.

• Whilst there is currently some evening and weekend trade, due to the nature of the location it is minimal, and is not expected to significantly grow. Therefore, the future retail floorspace requirement is not expected to be satisfied with an extension of opening hours. Rather, the area is expected to operate in a similar function and any further requirement is likely to be needed largely to serve the weekday worker population.

• The largest proportion of floorspace is F&B (0.18m2/head) and whilst this does sit below the City of London average, this should be considered to be the best positioning and the target for any future stock delivery for the street in light of the dominance of comparison goods space on Cheapside.


Retail Agency Summary

• Unique position in local retail market as an F&B destination made up of a mixture of

multiples and new concepts whom are attracted by comparatively lower rents vs other major City locations.

• Fleet Street currently serves the local worker catchment well. Any future growth in retail stock should prioritise F&B and A1 food to manage impact to Cheapside and remove risk of duplicating a comparison goods offer.

SUMMARY

Given the close proximity of Cheapside with One New Change, and Holborn (which includes retail units within Camden) with a greater critical mass of restaurant and retail operators, we anticipate some leakage from Fleet street to alternative locations. However, with investment in public realm, there is considerable potential to improve visitor experience and reduce this leakage to neighbouring locations.

Furthermore, one can walk to the Southbank and the West End, the former is benefitting from considerable investment and has established itself as an attractive destination for workers and


tourists. This can be viewed as an opportunity to grow visitor numbers to Fleet Street through the delivery of a compelling F&B offer.

The key for Fleet Street moving forward is to improve visitor experience through a programme of public realm improvements and add to the retail stock where possible. New stock should seek to build on existing tenant mix which is largely A1 food led – and should look to capitalise on the attractively low rents to attract new concepts to give the area a genuine point of difference.

AVAILABILITY NOW

Limited.

QUALITY OF STOCK

Generally, the quality of retail and restaurant space on Fleet Street is poor as there have been no significant new developments, and most of the stock is made up of traditional office buildings from various eras.

New Street Square is the exception to this, constructed about 10 years ago, which is fully let.

QUALITY OF DEMAND

Demand is limited to service type operators, and A1 food and restaurant operators this is mainly due to this being very much limited to 5-day a week trade.


The main fringe location to monitor is the area between Holborn and Fleet Street and should be targeted for future growth in stock. With the right tenant mix, this area can act as a key gateway to Fleet Street.


• Quantitative analysis provides a view of a need for 25,924sqm of new retail stock

should be delivered to meet demand from pipeline office developments.

• It is viewed that Fleet Street does not have the capacity to deliver the significant space requirement resulting from the quantitative analysis. This requirement should be met where possible and a flexible policy should be adopted which sees further growth in Cheapside where stock requirements cannot be met in the Fleet Street PSC

• Any delivery of new stock should be focussed between Holborn and Fleet Street.

• Retail development for Fleet Street should also focus on improving the quality of existing stock. F&B requirements outlined in the summary found in appendix 7.12 should be considered.


• Maintaining a high level of F&B and mix of multiples and independent operators should be of high priority. Limited Comparison Goods space is required.

• Public realm improvements, to reduce the impact of traffic on visitor experience on the street should also be targeted and is likely to drive an improvement of visitor frequency, dwell time and spend and drive greater occupier demand.


5.4 LIVERPOOL STREET AND MOORGATE

5.4.1 PURPOSE

Key Points

• Moorgate is the most worker-centric PSC – three out of four visitors interviewed were in area for business.

• Moorgate had the lowest average spend of all areas and had the highest proportion of visitors requesting more shops and F&B.

• Liverpool Street has a more balanced profile, driven by Liverpool Street station and high levels of international visitors.

• There is strong demand to improve on retail and F&B around Liverpool Street. It has the highest proportion of visitors requesting better F&B, visitors here are also most likely to be encouraged to visit on evenings and weekends.

Survey Summary

As previously outlined, for the purposes of this analysis Moorgate and Liverpool Street have been combined into one PSC due to geographical proximity.

The visitor profile of Moorgate is the most dominated by workers compared to all other PSCs. Many aspects from the on-street survey also indicate how worker-centric this location is; characterised by high frequency, long dwell times (including work hours) and an affluent, professional demographic profile. In Moorgate, three out of four people are in the area for business, and the PSC also contains the highest proportion of UK residents who work in London (88% compared to the survey average of 77%). There is a very low proportion of respondents passing through or shopping, reflected in average spend (£21, the second lowest average spend after Fleet Street).

By way of contrast, Liverpool Street’s visitor profile is more balanced. London Liverpool Street is one of the busiest stations in London, serving local, regional and national train lines as well as the Stansted Express. As such, Liverpool Street attracts a large proportion of tourists, has the youngest demographic profile and has the lowest frequency of visit due to the influence of the transient population (81 visits per year).

Given the transport links, location and current offer, the Liverpool Street PSC contains a large proportion of visitors who are in the area to meet up with family and friends. One in five respondents requested better catering (19%), significantly higher than in any other location. 30% of respondents also requested events – again, much higher than any other location – indicating untapped demand and a strong opportunity to further boost the area with developments such as British Land’s plans for Broadgate.



Key Points

• Estimated change in total daily population of 29,000 to 152,865 up to 2036, driven by delivery of c.335,000sqm pipeline of offices and a 50% rise in spending tourists/day.

• Current retail floorspace of 67,930sqm gives this PSC a below average retail supply ratio (0.55) in light of highest worker population of all City of London PSC catchments.

• Future additional floorspace requirement of a minimum of 44,508sqm to both deliver greater provision for existing worker population and provide adequate supply for high worker population growth.

• Below average provision of F&B space against City of London average (0.21 vs 0.31).

• Under provision of Comparison Goods space against City of London average (0.09 vs 0.13) and benchmark Central London locations (0.09 vs 0.23).


SUMMARY

We anticipate continued strong demand for this location, and therefore the capacity for more retail and restaurant space. There is also an opportunity to capitalise on the close proximity to Spitalfields and Shoreditch and Liverpool Street mainline station and Crossrail to make this a true 7-day week location.

One of the key initiatives to ensure that this area reaches its full potential is to ensure that adequate retail and restaurant accommodation is available, and the public realm is enhanced to encourage higher visit frequency and dwell time. This should be done with emphasis on the existing heritage and the ability to attract workers Monday to Friday and London residents and tourists at the weekend.

AVAILABILITY NOW

Availability is very limited in terms of existing building stock. British Land are due to complete further redevelopment of their ownership in the area with 100 Liverpool Street in 2019, with 90,000 sq ft of retail space. There are further redevelopment projects planned including 4-10 Bloomfield Street, 12 Wilson Street, the Moorgate Crossrail station and 60 London Wall.

Historically demand for this location has been consistently strong, driven primarily by Liverpool Street and Moorgate Stations, and availability limited so we anticipate the new stock to be fully absorbed without delay.

We anticipate demand to increase going forward, driven by the increased connectivity from Crossrail, the extensive investment in the location which will increase the density of office workers and contribute to a greater critical mass of retail and restaurant operators. In addition


to the location itself, further investment in the fringe areas close by in particular Shoreditch and Spitalfields will appeal to a growing number of London residents and tourists at the weekend, which will potentially make this area a truly 7-day-a week trading location for the first time.

QUALITY OF STOCK

The existing building stock varies in quality with a good example of well configured attractive space being Broadgate Circle where in addition to providing well configured restaurant units, the public realm, and landscaping have all been enhanced to create a location which will draw people from across the City.

Liverpool Street and parts of Bishopsgate, although very busy, still have some outdated buildings with poorly configured retail and restaurant space which could be improved.

QUALITY OF DEMAND

There is a very wide range of demand for this location, in particular A1 food, and restaurants, service type uses.


The traditional fringe locations, in particular Spitalfields and Shoreditch have already undergone significant transformation and will witness further growth in demand from the delivery of new office stock. These areas are continuing to benefit from significant investment, with developments such as the London Fruit and Wool Exchange offering in the order of 40,000sqft on new retail and restaurant accommodation together with over 300,000sqft of office accommodation due to complete in 2018. Other future developments include Principal Place – 20,000sqft of retail and restaurant accommodation, located just outside The City which completes in 2019. Seamlessly blending these fringe locations with the Liverpool Street PSC will have cross boundary implications with Hackney / Tower Hamlets but presents a significant opportunity to create a diverse and vibrant retail location whilst delivering new retail stock to meet demand.

Other fringe locations we feel that will potentially become more attractive to retailers and restaurant operators are the ‘Culture Mile’ area between Barbican and Moorgate, and Wilson Street/Sun Street area, both areas are within easy walking distance of the main amenities in the area. The Culture Mile area in particular has huge potential to capitalise on its cultural amenities.


• Merging Liverpool St & Moorgate PSCs in light of significant development both aboveand below ground. Prioritise public realm improvements, streetscaping anddevelopments delivering large and well configured units that meet local demand.

• Increase total retail stock in the PSC by a minimum of 44,508sqm to serve a highdensity worker catchment and to serve the forecast growth in worker population. New


stock should seek to improve both Comparison Goods and F&B provision across key pitches within the PSC.

5.5 LEADENHALL MARKET

5.5.1 PURPOSE

Key Points

• Compared to other PSCs, the Leadenhall Market PSC attracts a relatively large proportion of tourists and non-UK visitors who are sightseeing at the historic market.

• It is important to maintain the heritage, style and format of the iconic market, which is a major draw for visitors to the PSC.

• For the PSC as a whole the quality of retail and visitor satisfaction is high and these standards should be maintained.

Survey Summary

Leadenhall Market PSC attracts the largest proportion of non-UK visitors (26%), driven by the historic market. Many visitors are attracted to the market for the elegant Victorian market place, as well as Harry Potter fans looking for where the film was shot.

Given the large proportion of tourists and sightseers at the market, a third of visitors to the PSC are on their first trip. It is therefore important to provide excellent first impressions by retaining the heritage, style and format of the market and provide first class modern retail stock across the key PSC streets outside of the market to further improve worker, visitor and resident spend.

There is a high level of visitor satisfaction in this PSC, achieving a Net Promoter Score of 27% - significantly higher than any other PSC.

Leadenhall Market PSC attracts the largest proportion of groups with children - which will influence the type of retail and facilities that are required across the entire PSC and not just inside the historic market. Average retail spend is in line with the overall survey average at £35.

Far fewer respondents requested better quality retail at than any other PSC, indicating the high quality of the current mix, and suggesting that future floorspace should be of a similar standard. There was also fairly low demand to improve the catering mix, however these requirements are likely to change given significant office pipeline developments over the next twenty years.


Key Points

• Estimated change in total daily population of 32,712 to 91,627 up to 2036, driven by delivery of c.470,000sqm pipeline of offices in the PSC catchment This is the highest growth of all PSCs and will see it overtake Fleet Street in terms of catchment size.


• Current retail floorspace of 40,900sqm gives this PSC a retail supply ratio (0.69), second behind Cheapside, in light of a relatively low total daily population of 58,915.

• Future additional floorspace requirement a minimum of 32,712sqm to both deliver greater provision for existing worker population and provide adequate supply for high worker population growth.

• F&B provision sits broadly in line with the City of London average (0.29 vs 0.31m2/head)

• Over provision of comparison goods space against City of London average (0.15 vs 0.13m2/head)


SUMMARY

We anticipate ongoing demand for more restaurant and retail space. The key is ensuring that this is well configured with good prominence and allows an occupier to stamp their identity. Enhancing the gateway locations (set out below) will be important in ensuring the Leadenhall PSC positioning in the City retail landscape, both in terms of the units themselves and landscaping and streetscaping.

AVAILABILITY NOW

The historic Leadenhall Market building is currently 100% let, with only Chopd and Tiger marketing their leases. Availability outside the market, on key streets across the PSC (Leadenhall Street, Gracechurch Street, Fenchurch Street and Houndsditch) is also limited.

QUALITY OF STOCK

Inside the market, units are constrained in terms of size, configuration and prominence. While retailers like the history and character of the market, many feel this is offset by the lack well configured units. Prominence and signage is also restricted – largely because Leadenhall is listed. Outside of the market building, unit size, configuration and prominence greatly improves and is more conforming to modern retailer requirements.

QUALITY OF DEMAND

Recent deals in the Leadenhall PSC include CoCo di Mama, Thomas Pink, Oliver Sweeny and Goods Yard. Moleskine have an active requirement in this area of The City outlining a broad range of demand by way of occupier types, many of whom will target a location in close proximity to the market to capitalise on high visitor numbers and trade from a more conforming unit.



Two key fringe locations are Whittington Avenue and Lime Street/Cullum Street. Both locations are gateways into Leadenhall Market, and have the potential to complement and enhance the occupier mix as key gateways from Leadenhall Street and Fenchurch Street. Both locations also have the ability to redevelop existing building stock to provide retail and restaurant units that will suit a range of today’s requirements.

In addition to strengthening the gateways surrounding the market, future stock should seek to be delivered in neighbouring streets to the major office schemes taking place in the area – at the southern end of Bishopsgate, Undershaft / St. Mary Axe.


• Any further growth in retail stock in the PSC should primarily seek to enhance the drawof Leadenhall Market as an F&B destination.

• Enhance Whittington Avenue and Lime Street, two key gateways into LeadenhallMarket and strengthen retail provision around major office developments onBishopsgate through a programme of public realm improvements and delivery of highquality retail and restaurant space.

• In light of the limited feasibility to deliver new stock outside of the historic market, futurepolicy should be flexible enough to accommodate additional stock in the neighbouringLiverpool St/Moorgate PSC to meet demand driven by new office developments in thearea.


5.6 REST OF THE CITY AND LINKS

5.6.1 PURPOSE

On-street surveys were only undertaken at each PSC and as such there is no visitor behaviour data from which to draw from as to how key locations in the rest of The City are used.

However, 40% of the retail stock in The City of London falls outside of PSC boundaries thus ‘Rest of The City’ plays a significant role in meeting demand outside of the primary shopping destinations and should be accounted for in the revised City plan.

To best understand the current and future dynamics of retail demand in locations outside of PSCs, a map has been produced to show all future office pipeline developments up to 2026 alongside existing retail stock. This has been designed to spatially identify current under provision of retail stock in locations where new office is to be delivered outside of PSC boundaries, in order to advise on priority areas of focus for the delivery of new retail space.

The office pipeline and retail stock map can be found in the appendix (Map 8) and is referred to throughout this section.

5.6.2 SUPPLY / DEMAND - OVERALL

Key Points

• Estimated change in total daily population of 89,121 to 294,331 up to 2036, driven bydelivery of c.986,000sqm pipeline of offices.

• Current retail floorspace of 169,823sqm, concentrated largely in south of FenchurchStreet / Lombard Street and between Cheapside & Fleet Street PSCs.

• Future additional floorspace requirement a minimum of 85,698sqm primarily to provideadequate supply for high worker population growth.

5.6.3 PRIORITY AREAS

FARRINGDON / CULTURE MILE

The most significant under provision in context of future office stock delivery is in the north west of The City.

New office developments at Bartholomews Hospital site and 1 Bartholomew Close are set to deliver close to 47,000sqm of new office stock to this area of The City and there is currently an under provision of retail stock in the area to meet future demand.

In addition to the expected increase in worker population driven by these developments, there will be a greater demand for retail driven by a rise in tourist visitors to the Culture Mile. Whilst still in its infancy today, this area of The City will be completely transformed through the launch


Crossrail StationDaily

Passengers (Today)

Assumed Passengers

(Post Crossrail)

Crossrail Uplift

Bond Street 155,000 225,000 45%Farringdon 53,000 102,000 92%Liverpool Street 200,000 249,500 25%Paddington 165,000 248,000 50%Tottenham Court Road 150,000 200,000 33%

of a new Museum of London and Centre for Music which is expected to draw an additional two million visitors a year.

Alongside the delivery of these developments is the launch of the Elizabeth Line at Farringdon in 2019. This coupled with the upgrade of the Thameslink line will bring 1.5 million additional visitors a year within a 45-minute journey of the area. Figure 16 below shows the expected change in passenger numbers across key Central London stations following the launch of Crossrail, from a 2014 study by Arup.

Figure 16 – Forecast Change in Entry & Exits Pre and Post Crossrail Launch

Total footfall through Farringdon station is expect to witness a greater increase than all other key Elizabeth Line stations. This places even greater emphasis on the delivery of good quality retail stock to meet demand, particularly for the Culture Mile area given its strategic location between both Farringdon and Moorgate/Liverpool Street.

EASTCHEAP / MONUMENT

Whilst this area of The City is not witnessing the scale of change seen in Farringdon / Culture Mile, Eastcheap / Monument sits centrally between four new office developments in the pipeline.

This area is currently well served in terms of existing retail provision however consideration should be given to additional stock and improvements to existing retail stock where possible, to best accommodate a rise in future worker numbers.

This location is also in close proximity to the Leadenhall PSC which is expected to deliver a considerable uplift in new office stock up to 2026. Delivery of new retail stock in Eastcheap / Monument can also expect to meet growing Leadenhall demand in light of limited capacity for new retail stock in this PSC.

5.6.4 RETAIL LINKS

As set out in CBRE’s 2006 retail capacity study, the purpose of the retail links in The City was to encourage foot flow and improve connectivity between all PSCs.

The primary purpose of the retail links in context of the retail market in The City today is to meet convenience driven shopping trips – each link serving a localised office worker population. In light of the very high working population throughout The City, links still have an important role to


play in adequately meeting demand. However, the key point for future policy is to have distinction in terms of occupier mix between PSCs and retail outside of PSC boundaries.

A distinction in terms of occupier mix in links and PSCs is crucial to maintaining the health of the core offer within the prime streets in the City. In practice, this means restricting the delivery of comparison goods space outside of the prime streets within each PSC. There are two locations, regarded as links, that could be considered exceptions to this rule – or could be defined as ‘Priority Links’. Both Cornhill and Ludgate Hill, as shown on map 8 in the appendix, feature very high concentrations of retail stock and fall outside a PSC boundary but are located on the main thoroughfare between two PSCs. Crucially, these locations also provide a bridge between a major transport hub and a PSC and therefore act as key gateways into their respective PSCs – in both of these instances, a similar occupier use to that found within the prime streets of the PSC could also be considered.

Retail outside of PSC’s and links are typically convenience driven, often focussed on F&B or services. This type of retail, often development led, still has a vital role to play in serving very localised worker catchments. Clearly in areas of very high worker concentrations, these type of retail developments do succeed and improve the convenience and quality of provision available to workers. However, a balance should be recognised in future policy for this type of retail and should not detract visitors away from using prime PSC streets. Future policy should not restrict the delivery of new space but should seek to achieve an occupier mix that differentiates it from the prime PSC streets. Ensuring the retail mix delivered in this type of new stock does not mimic that found in the prime PSC streets will ensure that demand both from visitors and occupiers is maintained in the key PSC shopping streets.


6 FUTURE RETAIL TRENDS 6.1 TRENDS AND IMPLICATIONS FOR THE CITY OF LONDON

6.1.1 ONLINE RETAIL

UK retail is becoming an extremely competitive environment, due to unprecedented growth in online retail, an unstable global marketplace and rapidly developing technology. The annual rate of growth in online sales is slowing, but the value of online sales continues to rise as total retail expenditure grows in response to population growth and the wealth effect (as shown in Figure 14).

Figure 14 - Online Expenditure Growth

Source: Global Data 2017

Despite a fifth of purchases now being made online, the more that online retail grows, the more crucial the role of the physical store becomes. It is estimated that up to 90% of all retail transactions touch a physical store at some point during the buying process, whether it is for inspiration, research or Click & Collect.

Whilst bricks and mortar retail will not be fully replaced by online, the role of the physical store is changing into two polarised functions; convenience and destination shopping missions. It is crucial for retailers, landlords and local planning authorities to recognise these evolving shopping habits in order for physical retail to trade successfully alongside online retailing.

Due to the nature of shopper behaviour in the City of London, it is likely that there will be more of a requirement to accommodate functional, convenient retail space rather than the larger store footprints which are home to a full product range.

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6.1.2 CLICK & COLLECT

The Click & Collect market is currently worth £6.0bn and is expected to grow to £8.8bn by 2021, with growth waning as the market matures (Figure 15). Click & Collect refers to all goods (not services) where payment is made online and the goods are collected by the purchaser at the retailer’s location.

Figure 15 – Click & Collect Expenditure Growth

Source: Global Data 2017

Two retail categories dominate Click & Collect expenditure; Clothing and Footwear (56% of spend), followed by Electricals (23%).

Another growing channel is the ‘Pick-Up, Drop-Off’ (PUDO) market, such as Collect+, Amazon lockers and Doddle. As well as being channelled through existing retail stores, entire units are also being dedicated for these services such as the Doddle outlet next to Liverpool Street station. PUDO hubs provide convenience for the consumer and are a way in which to integrate a physical shopping location into the online buying process and encourage footfall.

The value of the PUDO channel is currently worth £650m and is expected to surpass £1.0bn by 2020, boosted further by tie-ups such as eBay’s recent partnership with Doddle. This will enable customers to Click & Collect at any Doddle store across the country, extending eBay’s footprint and enabling the online marketplace to become more competitive with Amazon.

Shoppers aged between 35-44 have the highest penetration in Click & Collect usage, making this a key service for City of London workers. It is expected that the growth of the channel will require further retail space in the City to be dedicated to these services in future.

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6.1.3 CHANGING REQUIREMENTS

Historically there has been limited supply and availability of retail space in some areas of the City of London. In order for retail to thrive in the future, the City will need to offer a quality provision of well configured units in prominent locations. It will be important to provide a range of unit sizes; for some retailers the role of technology may lead to requirements for smaller unit space as retailers can offer the whole stock inventory on a tablet. For a more detailed overview of requirements by occupier type, see the requirements matrix in appendix 7.12.

The new retail landscape is being defined by an increasing trend of retailers moving away from secondary pitches and taking a smaller quantity of prime quality space. There will, however, be retailers that require larger units to use the space for showrooms.

6.1.4 SHOWROOMING

The lack of retail space, growing business rates and increasingly tight margins are forcing retailers to reconsider how floor space is being occupied. Physical outlets are now increasingly being used to showcase a brand, rather than purely to sell products; also known as ‘Showrooming’. The exponential growth of online retail means that often physical retail space is better used to drive traffic online, rather than providing point of sale retail space.

Showrooms provide pureplay online retailers the opportunity for consumers to experience the brand, and to see, touch and feel products that online-only retail prevents. An example is online furniture and homewares retailer Made.com, which has opened bricks and mortar showrooms. The stores use physical space to display products and provide interior inspiration, and as customers are not able to purchase anything in-store, demonstrates how retail is shifting away from conventional P&L outlets.

Showrooms are also used by traditional bricks and mortar retailers such as Apple, Tesla and Dyson. Whilst these brand’s products are available to purchase in store, the function of the showroom is primarily to increase brand awareness, showcase innovative products and provide excellent customer service to promote brand loyalty.

6.1.5 BLURRING OF USE CLASSES

A growing number of retailers are creating store-within-stores; renting out space inside their shops to other brands. The store-in-store concept is popular as it provides convenience and variety for the consumer, the host earns additional income from often under-utilised space and the kiosk reduces costs by renting a smaller footprint.

A classic example is coffee shops in book store, such as Costa Coffee in Waterstones. The concept is now widening, with cafés now featuring in fashion retailers, for example independent coffee shop Brwd in French Connection and Thomas’ Café in Burberry. Fashion retailer Next has announced a partnership with chef Gino D’Acampo to open prosecco bars and restaurants in its stores.


As well as Food & Beverage in A1 retail, there is an increased presence of D2 leisure in A1 units, exemplified by Sweaty Betty’s flagship on Carnaby Street. Traditionally an athleisurewear retailer, the new store features fitness classes, a healthy café and a blow dry and braid bar.

As the store-within-store concept widens, traditional property use classes become redundant, presenting a challenge for future planning. Use classes will need to be reviewed or an alternative system will need to be adopted.

6.1.6 TECHNOLOGY

New technology is continuing to shape retail, and is supporting the polarisation of physical stores towards both convenient and experiential retail.

Many technology advances centre around convenience, and making payment for goods as seamless as possible. Sainsbury’s has begun testing checkout-less technology, where customers pay for their shopping using a mobile phone app. This is an extension of Amazon’s introduction of checkout-less stores across its new physical retail estate, which use ‘virtual baskets’. Most recently, Costcutter has become the first supermarket to enable customers to pay by using the touch of a finger. Customers use their fingerprint’s unique vein pattern to identify themselves and pay for their goods. This is likely to affect space requirements and store configurations in the future, as stores will no longer require payment desks.

Technology is also supporting the experiential side of retail, with Artificial Intelligence, Augmented Reality and Virtual Reality. These immersive experiences, from virtual showrooms and malls to the creation of virtual experiences for customers in order to sell products, are becoming more accessible and are expected to be an integral part of retail in the future.

6.1.7 CONSUMER SPENDING

Recent retail sales performance has been turbulent, owing to economic and political uncertainty, increasingly squeezed household budgets and stagnated wage growth. Currently in the UK consumer spending is slowing as wage growth sits below inflation (Consumer Price Index). Medium to long term performance remains unclear however the City of London is expected to remain fairly resilient due to the nature of the market and affluent consumer demographic.

6.1.8 RETAILER AFFORDABILITY

An increasingly challenging issue for occupiers is affordability. Whilst London benefits from a very high sales potential, occupancy costs are higher in the capital than any other European city. Other outlays such as business rates and occupancy costs are also seeing sharp growth.

The impact of rising costs on retailers and restaurants is more visible in the West End, where rents and rates are significantly higher than the City. All Zone A rents Colliers monitor in the City sit between £200-£300 and all sit below the Central London average of £464.


So whilst retailer affordability today should not be considered a threat to vitality of the retail offer in The City, if it was - then the most successful brands will adapt their formats, downsize or move to a less prime location to continue trading.


7 APPENDIX 7.1 MAP 1 - PSC CATCHMENT BOUNDARIES


7.2 MAP 2 - LEADENHALL MARKET – WORK LOCATIONS OF SURVEY RESPONDENTS


7.3 MAP 3 - CHEAPSIDE – WORK LOCATIONS OF SURVEY


RESPONDENTS


7.4 MAP 4 - LIVERPOOL STREET / MOORGATE – WORK LOCATIONS OF SURVEY RESPONDENTS


7.5 MAP 5 - FLEET STREET – WORK LOCATIONS OF SURVEY RESPONDENTS


7.6 METHODOLOGY FLOW CHART


7.7 MAP 6 - PRIME PSC STREETS SURVEYED IN AUDIT


Earliest 'Exp Comp month

Earliest 'Exp Comp year Building No. Address Postcode 1 Postcode 2 Boundary Flag M2 Devt type

Q3 2017 Bloomberg Place EC4 EC4R 1BB Cheapside 35,290 NewQ3 2017 Bloomberg Place EC4 EC4N 6LY Cheapside 46,452 NewQ3 2017 1 London Wall Place EC2 EC2Y 5DA Not In Boundary 28,800 NewQ3 2017 2 London Wall Place EC2 EC2Y 5DA Not In Boundary 11,055 NewQ3 2017 2 London Wall Place EC2 EC2Y 5DA Not In Boundary 5,574 NewQ3 2017 15 Bishopsgate EC2 EC2N 3NW Leadenhall 5,295 NewQ3 2017 Spectrum 160 Old Street EC1 EC1V 9HE Not In Boundary 5,574 NewQ3 2017 Spectrum 160 Old Street EC1 EC1V 9HE Not In Boundary 9,290 NewQ3 2017 21 Lime Street EC3 EC3M 7HB Leadenhall 2,847 NewQ3 2017 Bridge House 181 Queen Victoria Street EC4 EC4V 4DD Not In Boundary 1,587 NewQ4 2017 30-32 Lombard Street EC3 EC3V 9BQ Not In Boundary 5,110 NewQ4 2017 The Scalpel 52 Lime Street EC3 EC3M 7AF Leadenhall 24,295 NewQ4 2017 The Scalpel 52 Lime Street EC3 EC3M 7AF Leadenhall 7,553 NewQ4 2017 The Scalpel 52 Lime Street EC3 EC3M 7AF Leadenhall 1,123 NewQ4 2017 The Scalpel 52 Lime Street EC3 EC3M 7AF Leadenhall 2,921 NewQ4 2017 10 Fenchurch Avenue EC3 EC3M 5BN Leadenhall 39,948 NewQ4 2017 London Fruit & Wool Exchange 39 Brushfield Street E1 E1 6AA Not In Boundary 10,372 NewQ4 2017 London Fruit & Wool Exchange 39 Brushfield Street E1 E1 6AA Not In Boundary 19,357 NewQ4 2017 Fleet Building 70 Farringdon Street EC4 EC4A 4AP Fleet Street 83,613 NewQ1 2018 Atlas House 145 City Road EC1 EC1V 1AR Not In Boundary 7,618 NewQ1 2018 One The Thames 2 Arundel Street WC2 WC2R 3DA Not In Boundary 36,975 NewQ1 2018 Blossom Street 3-10 Shoreditch High Street E1 E1 6PG Not In Boundary 22,854 NewQ1 2018 Can of Ham 70 St Mary's Axe EC3 EC3A 8BF Leadenhall 27,871 NewQ2 2018 51 Eastcheap EC3 EC3R 5AZ Not In Boundary 10,591 NewQ2 2018 120 Moorgate EC2 EC2M 6UR Liverpool Street & Moorgate 9,624 NewQ3 2018 100 Bishopsgate Bishopsgate EC3 EC2M 1GT Liverpool Street & Moorgate 23,226 NewQ3 2018 100 Bishopsgate Bishopsgate EC3 EC2M 1GT Liverpool Street & Moorgate 10,963 NewQ3 2018 100 Bishopsgate Bishopsgate EC3 EC2M 1GT Liverpool Street & Moorgate 23,690 NewQ3 2018 20 Farringdon Street EC4 EC4A 4BL Fleet Street 8,436 NewQ3 2018 100 Bishopsgate Bishopsgate EC3 EC2M 1GT Liverpool Street & Moorgate 22,761 NewQ3 2018 1 Bartholomew Close EC1 EC1A 7HH Not In Boundary 25,548 NewQ4 2018 6-8 Alie Street E1 E1 8DD Not In Boundary 3,602 NewQ4 2018 2 Farringdon Road EC1 EC1M 3HN Not In Boundary 12,077 NewQ4 2018 One Braham 1 Braham Street E1 E1 8EP Not In Boundary 27,871 NewQ4 2018 1 Southbank Place SE1 SE1 7HD Not In Boundary 25,357 NewQ4 2018 2 Southbank Place SE1 SE1 7HD Not In Boundary 24,805 NewQ4 2018 Minories Estate EC3 EC3N 1LJ Not In Boundary 18,116 NewQ4 2018 18 Blackfriars Road SE1 SE1 8NY Not In Boundary 20,439 NewQ4 2018 101 Moorgate EC2 EC2M 6SL Liverpool Street & Moorgate 5,276 NewQ4 2018 The Wave 119 Farringdon Road EC1 EC1R 3DA Not In Boundary 8,826 NewQ1 2019 21 Moorfields EC2 EC2M 6TX Liverpool Street & Moorgate 52,397 NewQ1 2019 80 Fenchurch Street EC3 EC3M 4BR Not In Boundary 22,761 NewQ2 2019 The Stage, The Hewett Hearn Street EC2 EC2A 3LS Not In Boundary 22,297 NewQ2 2019 6-8 Bishopsgate EC2 EC2N 4DA Leadenhall 55,742 NewQ3 2019 100 Liverpool Street EC2 EC2M 2RH Liverpool Street & Moorgate 41,806 NewQ3 2019 22 Bishopsgate EC2 EC2N 4BQ Leadenhall 116,779 NewQ4 2019 Elizabeth House South 39 York Road SE1 SE1 7NQ Not In Boundary 17,652 NewQ4 2019 Elizabeth House North 39 York Road SE1 SE1 7NQ Not In Boundary 51,097 NewQ4 2019 London Bridge Station Tooley Street SE1 SE1 2PR Not In Boundary 49,982 NewQ4 2019 40 Leadenhall Street EC3 EC3M 2RY Leadenhall 82,684 NewQ1 2020 60 London Wall EC2 EC2M 5NG Liverpool Street & Moorgate 29,729 NewQ1 2020 2 Finsbury Avenue EC2 EC2M 2PP Liverpool Street & Moorgate 61,966 NewQ3 2020 Butterfly 1 Portsoken Street E1 E1 8PH Not In Boundary 37,161 NewQ4 2020 1 Undershaft EC3 EC3A 8EE Leadenhall 83,613 NewQ4 2020 1 Crown Place EC2 EC2A 2ER Not In Boundary 13,145 NewQ3 2021 Sumner Street SE1 SE1 9HZ Not In Boundary 12,449 New

TBC TBC Bankside Quarter 245 Blackfriars Road SE1 SE1 9UY Not In Boundary 36,232 NewTBC TBC 111 Cannon Street EC4 EC4N 5AD Not In Boundary 2,002 NewTBC TBC 64-66 Coleman Street EC2 EC2R 5BT Liverpool Street & Moorgate 2,337 NewTBC TBC Kildare House 15-16 Dorset Rise EC4 EC4Y 8AE Fleet Street 4,972 NewTBC TBC 20 Hatfields SE1 SE1 8DJ Not In Boundary 9,290 NewTBC TBC Windsor House 39 King Street EC2 EC2V 8DQ Cheapside 2,118 NewTBC TBC 10 King William Street EC4 EC4N 7TW Not In Boundary 11,574 NewTBC TBC Leadenhall Court 1 Leadenhall Street EC3 EC3V 1AB Leadenhall 10,498 NewTBC TBC Bankside House 107-112 Leadenhall Street EC3 EC3A 4AA Leadenhall 9,030 NewTBC TBC Fur Trade House 25 Little Trinity Lane EC4 EC4V 2AD Cheapside 10,972 NewTBC TBC Matheson House 142-144 Minories EC3 EC3N 1NT Not In Boundary 2,555 NewTBC TBC Tenter House 45 Moorfields EC2 EC2Y 9AE Liverpool Street & Moorgate 17,652 NewTBC TBC Moorfields House Moorfields EC2 EC2Y 9AE Liverpool Street & Moorgate 33,303 NewTBC TBC Hop Telephone Exchange Nebraska Street SE1 SE1 4JU Not In Boundary 5,944 NewTBC TBC Royal Mail House 148 Old Street EC1 EC1V 9HE Not In Boundary 13,471 NewTBC TBC 250-254/ 32 Old Street/ Cowper Street EC2 EC1V 9DD Not In Boundary 5,379 NewTBC TBC 54-80 Ossory Road SE1 SE1 5AN Not In Boundary 9,513 NewTBC TBC Union Works 60 Park Street SE1 W1K 2JN Not In Boundary 2,600 NewTBC TBC 185 Park Street SE1 W1K 2JN Not In Boundary 6,503 NewTBC TBC 21 Prescot Street E1 E1 8BB Not In Boundary 4,645 NewTBC TBC 44-65 Prescot Street E1 E1 8BB Not In Boundary 15,483 NewTBC TBC Mermaid House 2 Puddle Dock EC4 EC4V 3DS Not In Boundary 19,722 NewTBC TBC Baynard House 135 Queen Victoria Street EC4 EC4V 4AA Not In Boundary 18,581 NewTBC TBC Royal Mint Court Royal Mint Court EC3 EC3N 4QN Not In Boundary 51,097 NewTBC TBC 15-23 Southwark Street SE1 SE1 1RQ Not In Boundary 5,574 NewTBC TBC London College of Printing St. George's Road SE1 SE1 6ER Not In Boundary 4,645 NewTBC TBC Seal House 1 Swan Lane EC4 EC4R 3TN Not In Boundary 14,671 NewTBC TBC S G House 41 Tower Hill EC3 EC3N 4DX Not In Boundary 42,889 NewTBC TBC 195-201 Union Street SE1 SE1 0LN Not In Boundary 3,252 NewTBC TBC London Television Centre 58-72 Upper Ground SE1 SE1 9LT Not In Boundary 9,290 NewTBC TBC Enterprise House 80-100 Upper Ground SE1 SE1 9LT Not In Boundary 2,601 NewTBC TBC Vaughn Way/ The Highway E1 E1W 1YN Not In Boundary 95,755 NewTBC TBC Site 45-47 Westminster Bridge Road SE1 SE1 7JB Not In Boundary 3,525 NewTBC TBC Barts Hospital Site EC1 EC1A 7BE Not In Boundary 21,368 New

7.8 CENTRAL LONDON OFFICE PIPELINE


7.9 MAP 7 - BENCHMARK LOCATIONS - BOUNDARIES


7.10 RETAIL CATEGORY LOOK UPS

Colliers Category Goad Category

Colliers Category Goad Category

Comparison Antique Shops

F&B Grocers & Delicatessens

Comparison Art & Art Dealers

F&B Public Houses

Comparison Booksellers

F&B Restaurants

Comparison Carpets & Flooring

Grocery Butchers

Comparison Catalogue Showrooms

Grocery Confectionery, Tobacco & News

Comparison Chemist & Drugstores

Grocery Convenience Stores

Comparison Childrens & Infants Wear

Grocery Greengrocers

Comparison Clothing General

Grocery Off Licences

Comparison Crafts, Gifts, China & Glass

Grocery Supermarkets

Comparison Cycles & Accessories

Services Building Societies

Comparison Department & Variety Stores

Services Building Supplies & Services

Comparison DIY & Home Improvement

Services Dry Cleaners & Launderettes

Comparison Electrical & Other Durable Goods

Services Financial Services

Comparison Florists

Services Legal Services

Comparison Footwear

Services Opticians

Comparison Furniture Fitted

Services Other Retail Services

Comparison Furniture General

Services Photo Processing

Comparison Greeting Cards

Services Post Offices

Comparison Hardware & Household Goods

Services Printing & Copying

Comparison Health & Beauty

Services Repairs, Alterations & Restoration

Comparison Health Foods

Services Retail Banks

Comparison Jewellery, Watches & Silver

Services Shoe Repairs & Key Cutting

Comparison Ladies & Mens Wear & Acc.

Services Travel Agents

Comparison Ladies Wear & Accessories

Services Vehicle & Motorcycle Sales

Comparison Leather & Travel Goods

Services Vehicle Repairs & Services

Comparison Mens Wear & Accessories

Services Business Goods & Services

F&B Fast Food & Take Away


7.11 ON STREET SURVEY RESULTS

7.11.1 SUMMARY OF RESULTS

Overall: City of London Cheapside Fleet Street Leadenhall Market Liverpool Street Moorgate

User Type

Workers dominate the City’s profile. International tourists account for 19% of visitors, mainly from the USA, France and Germany.

More of a mixed visitor profile; large presence of workers but also tourists given the proximity to St Paul's.

Dominated by workers; second highest proportion out of all PSCs.

Above average proportion of international visitors due to the market being a popular tourist attraction.

Largest proportion of international visitors than any other PSC, influenced by travel links

Dominated by workers; highest proportion out of all PSCs.

Demo-graphics

The dominance of the workforce is exemplified by high proportions of lone respondents (76%, rather than adult groups or families) and a higher proportion of males than females.

Equal split of males and females due to the higher weighting of residents and tourists.

Largest proportion of males and the highest proportion of lone respondents, due to the dominance of workers.

Largest proportion of groups with children.

Largest proportion of adult groups due to tourism and the social visits that this PSC encourages.

Heavy influence of workers; lone respondents, fewest children.

Reason for Visit

Largely business (39%) followed jointly by passing through and sightseeing (19%).

The biggest draw is shopping, driven by One New Change shopping centre.

Mainly business (the second highest proportion after Moorgate).

Largest proportion of sightseeing.

Second highest proportion of sightseeing, linked to the high levels of tourists. Many visitors are using this location to meet with family and friends.

3 out of 4 visitors are in this PSC for business. Lowest proportions of passing through and shopping, reinforcing the PSCs primary function for work.

Frequency and Dwell Time

High frequency of 119 visits per year, driven up by the City's workforce. Average dwell time of 84 minutes.

Slightly below average frequency (108 visits p.a.), pulled down by infrequent visits from tourists. Slightly below average dwell time of 82 minutes.

Second highest proportion of visitors who come to this PSC five days a week; average frequency of 143 visits p.a. Average dwell time of 60 minutes.

A third of visitors are on their first trip to Leadenhall Market. Lowest dwell at 41 minutes.

Lowest annualised frequency at 81 visits p.a., driven down by tourists. Average dwell time of 71 minutes.

Highest frequency at 186 visits per year. 57% of visitors come to this PSC five days a week. Longest dwell at 225 minutes.

Spend

Average total spend of £34. Spend is highest on retail goods (£64) followed by F&B (£15) and grocery (£12).

Highest total average spend (£54) due to One New Change. Joint lowest F&B spend (£13); correlates with this PSC having the lowest provision of F&B floorspace.

Lowest total average spend (£18); relatively limited retail offer.

Total spend is slightly above average at £35. Highest average spend on F&B and Grocery.

Total spend is above average at £37. Second highest spend on F&B at £18, driven up by social visits.

Low total average spend of £34. Very low spend on grocery at £4.

Increasing Visitation

Respondents would visit more often if there were more events (19%). Expanding and improving the retail offer would also drive up frequency.

More shops and more events would encourage more visits to this PSC.

Relatively limited retail offer, therefore the joint highest proportion of visitors requesting more shops, alongside Moorgate.

Highest proportion of visitors who stated that 'nothing' would encourage them to visit more often; linked to tourists.

Highest proportion of visitors requesting events and better F&B. Visitors here are most likely to be encouraged to visit on evenings and weekends.

Limited retail and catering offer, therefore the highest proportion of visitors requesting both more shops and more F&B.

NPS Overall Net Promoter Score of -14%.

NPS of -9%. Balanced proportions of Promoters, Passives and Detractors.

Lowest NPS at -53% due to the highest proportion of 'Detractors'. Unlikely to recommend the area due to it being a place of work.

By far the highest NPS at +27%, due to the highest proportion of 'Promoters'.

Second highest NPS at +1%. Highest proportion of 'Passives'.

Second lowest NPs, closely behind Fleet Street at -52%. Unlikely to recommend the area due to it being a place of work.


7.11.2 RESULT TABLES

Total Cheapside Fleet Street Leadenhall

Market Liverpool

Street Moorgate

Count % Count % Count % Count % Count % Count % Total Respondents 715 - 138 19% 161 23% 193 27% 124 17% 99 14%

Qualifier: Are you a UK resident? UK Resident 577 81% 116 84% 140 87% 143 74% 93 75% 85 86% Non-UK Resident 138 19% 22 16% 21 13% 50 26% 31 25% 14 14% Base 715 138 161

193 124

99

Qualifier: Do you work in London? Yes 447 63% 87 63% 116 72% 117 61% 52 42% 75 76% No 130 18% 29 21% 24 15% 26 13% 41 33% 10 10% Base 577 116 140

143 93

85

Qualifier: Do you work in London? Yes 447 63% 87 63% 116 72% 117 61% 52 42% 75 76% No 130 18% 29 21% 24 15% 26 13% 41 33% 10 10% Base 577 116 140

143 93

85

Q1. What is the main purpose of your visit? Sightseeing 137 19% 20 14% 19 12% 57 30% 32 26% 9 9% Business 282 39% 28 20% 86 53% 68 35% 26 21% 74 75% Shopping 105 15% 52 38% 12 7% 26 13% 12 10% 3 3% Passing through 138 19% 27 20% 28 17% 35 18% 36 29% 12 12% Other 84 12% 17 12% 20 12% 18 9% 26 21% 3 3% Total 746 144 165

204 132

101

Base 715 138 161

193 124

99

Q2. How often do you visit [Location X]? Everyday 44 6% 7 5% 13 8% 3 2% 13 10% 8 8% Five days a week 224 31% 37 27% 64 40% 53 27% 14 11% 56 57% Twice a week 66 9% 17 12% 9 6% 27 14% 7 6% 6 6% Once a week 41 6% 10 7% 7 4% 12 6% 9 7% 3 3% Once every 2 weeks 17 2% 8 6% 2 1% 2 1% 4 3% 1 1% Monthly 45 6% 6 4% 11 7% 9 5% 16 13% 3 3% Once every few months 46 6% 14 10% 8 5% 5 3% 15 12% 4 4% A few times a year 54 8% 12 9% 14 9% 6 3% 13 10% 9 9% Once a year 44 6% 7 5% 8 5% 12 6% 17 14% 0 0% My first visit 134 19% 20 14% 25 16% 64 33% 16 13% 9 9% Base 715 138 161

193 124

99

Q3. How long have you spent at this location (minutes)? Average Minutes 84 82 60

41 71

225

Q4 & Q5: How much have you spent/will you spend today? Retail £64.36 £91.40 £25.35

£48.00 £64.22

£49.83

Eating & Drinking £15.28 £12.12 £11.98

£22.89 £17.57

£13.75 Grocery £11.56 £8.97 £17.00

£34.33 £9.41

£3.50

Total Average Spend £34.16 £54.06 £17.84

£35.32 £36.81

£20.56


Total Cheapside Fleet Street Leadenhall Market Liverpool Street Moorgate

Q6. What would make you visit [Location X] more often? More shops 109 15% 24 17% 34 21% 18 9% 12 10% 21 21% More F&B outlets 75 10% 10 7% 6 4% 18 9% 18 15% 23 23% Better Quality shops 88 12% 15 11% 27 17% 6 3% 22 18% 18 18% Better Quality F&B outlets 62 9% 7 5% 8 5% 10 5% 24 19% 13 13% Local events / attractions 134 19% 23 17% 26 16% 27 14% 37 30% 21 21% Other 77 11% 18 13% 17 11% 27 14% 13 10% 2 2% Nothing 331 46% 62 45% 76 47% 109 56% 44 35% 40 40% Base 715 138 161

193 124

99

Q7. Why would you not visit more often [Verbatim]

Q8a. How often do you visit [Location X] in the evening? Everyday 9 1% 0% 3 2% 1 1% 4 3% 1 1% Five days a week 22 3% 7 5% 4 2% 7 4% 3 2% 1 1% Twice a week 46 6% 9 7% 11 7% 10 5% 7 6% 9 9% Once a week 46 6% 11 8% 6 4% 10 5% 10 8% 9 9% Once every 2 weeks 28 4% 5 4% 7 4% 7 4% 5 4% 4 4% Monthly 44 6% 10 7% 7 4% 12 6% 9 7% 6 6% Once every few months 41 6% 9 7% 11 7% 8 4% 9 7% 4 4% A few times a year 95 13% 22 16% 11 7% 15 8% 26 21% 21 21% Once a year 67 9% 8 6% 22 14% 23 12% 14 11% 0% My first visit 106 15% 28 20% 10 6% 29 15% 23 19% 16 16% Never visit 211 30% 29 21% 69 43% 71 37% 14 11% 28 28% Base 715 138 161

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99

Q8b. What is your main purpose for visiting in the evening? Work/business 28 35% 6 32% 5 38% 0 0% 14 40% 2 29% Sightseeing 3 4% 0 0% 0 0% 0 0% 1 3% 1 14% Shopping 8 10% 3 16% 0 0% 0 0% 3 9% 1 14% Eating/drinking 24 30% 4 21% 4 31% 0 0% 12 34% 3 43% Events / attractions 3 4% 2 11% 0 0% 0 0% 0 0% 0 0% Other 14 18% 4 21% 4 31% 0 0% 5 14% 0 0% Base 80 19 13

0 35

7

Q8c. What is your main purpose for visiting at the weekend? Work/business 27 31% 5 25% 6 40% 0 0% 12 31% 3 38% Sightseeing 7 8% 1 5% 1 7% 0 0% 2 5% 2 25% Shopping 11 13% 3 15% 0 0% 0 0% 6 15% 1 13% Eating/drinking 24 27% 5 25% 3 20% 0 0% 14 36% 1 13% Events / attractions 4 5% 1 5% 0 0% 0 0% 1 3% 1 13% Other 15 17% 5 25% 5 33% 0 0% 4 10% 0 0% Base 88 20 15

0 39

8

Q9. What would make you visit Location X more in the evening or weekend? More shops 57 10% 11 10% 20 18% 4 3% 9 8% 12 14% More F&B outlets 63 11% 13 11% 8 7% 16 14% 13 11% 12 14% Better Quality shops 51 9% 7 6% 20 18% 1 1% 15 13% 7 8% Better Quality F&B outlets 47 9% 6 5% 10 9% 7 6% 14 12% 9 11% Local events / attractions 138 25% 37 32% 24 21% 13 11% 39 33% 24 29% Other 39 7% 14 12% 5 4% 11 9% 7 6% 1 1% Nothing 156 28% 26 23% 27 24% 64 55% 20 17% 18 22% Base 551 114 114

116 117

83


Total Cheapside Fleet Street Leadenhall

Market Liverpool

Street Moorgate

Q10. Do you regularly shop / use services at any of these locations? Leadenhall Market 99 14% 14 10% 24 15% - 0% 18 15% 14 14% Fleet Street 67 9% 5 4% - 0% 12 6% 4 3% 5 5% Cheapside 141 20% - 0% 30 19% 41 21% 24 19% 17 17% Moorgate 87 12% 17 12% 16 10% 21 11% 19 15% - 0% Liverpool Street 226 32% 42 30% 46 29% 56 29% - 0% 33 33% Elsewhere in the City 242 34% 50 36% 57 35% 77 40% 45 36% 33 33% Base 715 138 161

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99

Q11. How likely are you to recommend [Location X] to family and friends, on a scale of 1-10? (Net Promoter Score) 1 38 5% 7 5% 14 9% 1 1% 1 1% 15 15% 2 10 1% 4 3% 1 1% 1 1% 1 1% 3 3% 3 22 3% 2 1% 7 4% 3 2% 3 2% 7 7% 4 14 2% 1 1% 6 4% 2 1% 2 2% 3 3% 5 157 22% 31 22% 61 38% 17 9% 22 18% 26 26% 6 54 8% 9 7% 19 12% 10 5% 6 5% 10 10% 7 77 11% 15 11% 12 7% 22 11% 19 15% 9 9% 8 145 20% 28 20% 19 12% 51 26% 34 27% 13 13% 9 85 12% 16 12% 6 4% 41 21% 17 14% 5 5% 10 113 16% 25 18% 16 10% 45 23% 19 15% 8 8% Base 715 138 161

193 124

99

Detractor 295 41% 54 39% 108 67% 34 18% 35 28% 64 65% Passive 222 31% 43 31% 31 19% 73 38% 53 43% 22 22% Promoter 198 28% 41 30% 22 14% 86 45% 36 29% 13 13% Base 715 138 161 193 124 99

Net Promoter Score

14% -9%

-53% 27%

1% -52%

Q12a. Gender Male 415 58% 69 50% 102 63% 111 58% 75 60% 58 59% Female 300 42% 69 50% 59 37% 82 42% 49 40% 41 41% Base 715 138 161

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99

Q12b. Age 18-24 121 17% 20 14% 27 17% 27 14% 33 27% 14 14% 25-34 223 31% 47 34% 43 27% 58 30% 40 32% 35 35% 35-44 165 23% 23 17% 47 29% 40 21% 23 19% 32 32% 45-54 110 15% 25 18% 22 14% 37 19% 13 10% 13 13% 55-64 70 10% 15 11% 16 10% 26 13% 8 6% 5 5% 65+ 26 4% 8 6% 6 4% 5 3% 7 6% 0% Base 715 138 161

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99

Average Age 38 39 38

39 35

36

Q13. Party Size and Composition Alone 540 76% 99 72% 140 87% 142 74% 77 62% 82 83% Adult Group 137 19% 32 23% 11 7% 36 19% 43 35% 15 15% Adult(s) and Kids 38 5% 7 5% 10 6% 15 8% 4 3% 2 2% Base 715 138 161

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99

Average Party Size 1.4 1.4 1.2 1.6 1.5 1.2


7.12 RETAILER REQUIREMENTS MATRIX

Use Approximate Size (sq ft)

Positioning Typical Characteristics

A1 Food 400 – 2,000

High Footfall locations, on or close to prime

high streets, transport interchanges.

Generally, a preference for corner units, but can trade effective from in-line units.

Outside seating is an advantage for both increasing

number of covers, and prominence.

Restaurants

1,500 – 4,000

Depending on style, near or very close to

high densities of officer workers, shoppers and

tourists. Certain restaurant can be

successful as destinations in their own

right.

Open well configured restaurant space, with outside

seating a major advantage. Period buildings with

character internally and externally can be advantageous.

Fashion and Accessories

500 – 2,500 (standard shop)

2,500 – 6,000 (flagship)

10,000 sq ft + (large flagship, e.g. TK Maxx, New Look Top

Shop etc)

Prime or close to prime high street locations. Clustering of similar

uses is very important for fashion and accessories.

The ability to incorporate the retailers style with the building

is an advantage but not always possible, especially

with new modern units. Character buildings can offer

this, but may not offer the same advantages in terms of

configuration.

Signage and prominence, and the ability to install a

prominent display are important.

Generally for a flagship unit, a double height shop front is


required.

For flagships and large stores, the ability to trade multiple

levels is important.

Service Retail ( E.g chemists,

metro style food stores,

banks)

1,500 – 5,000



Prominence is important, so corner locations are an

advantage. Surrounding users are not as important as

they are for fashion for example, but high pedestrian

flow is important.

Stationary / Gifts / News

etc 500 – 2,000



Adaptable to most building types and locations, but high

footfall levels are key.

Phone Shops

1,000 – 2,500



Areas with high levels of pedestrian flow, but can adapt to close proximity to a variety

of surrounding uses.

7.13 MAP 8 - RETAIL STOCK AND OFFICE PIPELINE MAP

CONTACT DETAILS

Matt Thompson Associate Director Retail Strategy Tel: +44 7344 6817 [email protected] Cat Stevenson Senior Retail Research Analyst Tel: +44 20 7487 1732 [email protected] Colliers International 50 George Street London W1U 7GA www.colliers.com/uk

This tender is submitted by Colliers International. The information in this tender is the intellectual property of Colliers International. The individuals, companies, partnerships, unincorporated associations and other bodies to whom it is submitted may neither publish, disclose to another, expose for library access nor in any other way communicate any part of it without the prior written consent of Colliers International. Colliers International is the licensed trading name of Colliers International Property Advisers UK LLP (registered no. OC385143) and/or Colliers International Property Consultants Ltd (registered no. 7996509), in each case trading as Colliers International, registered in England and Wales. Our registered office is at 50 George Street, London W1U 7GA.

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