London suburbs dine out on new restaurant openings
In recent Perspectives, such as our focus on fitted units, we have drawn attention to the fact that, for various reasons, the restaurant sector has been the most active coming out of lockdown in terms of new lettings. We have also previously commented on the revival of London’s suburbs as local consumer numbers have swelled due to the fact that more people than normal are working and living from home.
Sourdough Sophia is a real success story of its time. The family-run microbakery set up to serve the local community during the first lockdown and local people responded by raising over £30,000 in crowdfunding for a permanent bricks and mortar presence. This has been a real hit, with queues forming along the pavement.
As lockdown restrictions are beginning to ease, the P-THREE team has been able to survey some parts of the capital first-hand and can report on how change is manifesting itself on the ground. We start in west London, where the leafy streets of Chiswick were – pre-pandemic – much sought-after by retailers and restaurant operators alike.
A supply/demand imbalance had pushed rents up to lofty heights, but even so, when vacancies arose there was no shortage of tenants willing to pay handsomely for a premium location. Covid changed the rules of the game, however, and with lengthy periods of no indoor trading and some tenants finding their business no longer viable, rents have fallen back significantly as landlords have by and large responded pragmatically.
This rebasing of rents has brought in a wave of new, predominantly leisure/restaurant sector, tenants. They include:
* Byron -> Chipotle
* Le Pain Quotidien -> Megan’s
* A previously vacant block -> Chiswick Dental Practice
* Jackson & Rye -> Five Guys
At the time of writing two units, including the former Patisserie Valerie, are on the market at Turnham Green Terrace. On a showery weekday there was still plenty of bustle on the pavements and the shopfronts are generally bright and well-kept, giving no outward clue of the turbulence of the past year.
Heading over to north London, we find a similar story in Crouch End, where there is a renewed sense of vibrancy. Recent new additions to the tenant mix include:
* (Local newsagents) -> Sourdough Sophia
* Monkey Nuts -> Allora Hall by Albion & East
* (Local Italian) -> Kalimera
Sourdough Sophia is a real success story of its time. The family-run microbakery set up to serve the local community during the first lockdown and local people responded by raising over £30,000 in crowdfunding for a permanent bricks and mortar presence. This has been a real hit, with queues forming along the pavement.
Finally, we move close to the Thames, at Battersea. As the amazing redevelopment of the Power Station continues, the tenant mix of the food & beverage first phase has shifted to include:
* Street Pizza by Gordon Ramsay replaces Mother
* Black Sheep Coffee replaces Coffee Works Project
And, away from the Power Station, at Battersea Rise, Amiga has opened in the former Southsider Cocktail Club.
As our pictures clearly illustrate, London’s inner and outer suburbs are flourishing in a way we would have found remarkable just over a year ago. But having found a new footing these suburban locations are likely to hold on to the extra footfall – an increased sense of localism and the probability that many former full-time office staff are likely to be working on a hybrid (home/office) basis for the foreseeable future are likely to ensure that.
To what extent retail will follow in the restaurant sector’s footsteps is less clear. New restaurant openings are being driven by the fundamental human desire to socialise and enjoy experiences that can’t be replicated at home. At the same time, the sudden availability of fitted and semi-fitted units, along with a recent relaxation in the planning regime (class E effectively allows restaurant use in any commercial space), has been seized on by opportunistic and entrepreneurial operators, including international brands, who also recognise London’s role as a gateway to European expansion and are reassured by the UK’s swift Covid vaccine roll-out.
These factors are not widely mirrored in the retail sector, which was already grappling with the structural changes brought about by an omni-channel environment, forcing retailers to reassess the role of bricks and mortar stores. These globally-applicable challenges have also seen a reduction in new arrivals of international retail brands. Unlike the restaurant sector, retail isn’t benefitting from a boost in consumer excitement as establishments re-open. In fact, rather the reverse is happening, as the return of shoppers to enclosed shopping environments has so far been tentative.
However, that doesn’t mean that the restaurant-led revival in London’s suburbs won’t include new retail openings. As we’ve previously suggested, for retailers who can tap into a reinvigorated sense of localism and attract a suitable demographic (for example, older shoppers who previously frequented now-closed department stores) London’s suburbs offer a potential wealth of long-term opportunities.
Article by Kate Sadler, Director P-THREE
