Analysis of growth within key commercial property sectors across the regional economies between 2010 and 2017 has revealed a significant value uplift for the café/restaurant market, whilst office and retail growth floundered.
Research by HARNESS Property Intelligence analysed changes in the value per square foot across shop, office and café/restaurant classes in Birmingham, Manchester, Liverpool, Leeds, Bristol and Cardiff between 2010 and 2017, with the café/restaurant market experiencing an average uplift of 8.5%.
The research serves as further evidence of the increasingly buoyant restaurant and cafe market, which was the recipient of £85bn of U.K. consumer spending in 2017 according to findings from Statista.
Birmingham led the way with a 15.8% increase, with Cardiff in second at 10.8%. Manchester and Liverpool saw rises of 9.9% and 9% respectively, whilst Bristol recorded a 6.2% rise. Leeds was the only city to post a fall of 0.52%.
In 2017, Leeds’ cafes/restaurants were valued at £11.10 per square foot, making it the most affordable city, whilst Manchester commanded the highest expense at £19.90.
Leeds also experienced the most significant decline in the office market. Values fell by 25.5% in the seven year period, whilst Liverpool, Cardiff and Birmingham also posted significant declines of 18.33%, 17% and 12.5% respectively. Bristol and Manchester fell by 6.5% and 5%.
The widely-documented challenges faced by the retail sector were also reflected in the findings. Cardiff and Leeds were the worst hit in terms of changes to shop values, which fell by 17% and 10.8%. Liverpool, Bristol and Manchester decreased by 7.8%, 7.2% and 1.4% respectively.
Birmingham was the exception to the rule, where the average value increased by 11.2%.
Ben Mein, CEO of HARNESS Property Intelligence, comments:
“Analysing the changes in values of commercial property across categories and regions provides a useful bellwether for the health of different sectors. The eat out culture has long been a firm favourite amongst the British population and has remained resilient despite being threatened by the emergence of delivery service heavyweights and a generally unpredictable economic environment. This could be partly explained by the corresponding misfortunes of the retail market, with restaurant and café operators able to capitalise upon falling consumer demand for traditional shop premises as the online boom continues to gain ground on its traditional counterpart.”