Seventeen shops at Bluewater are not trading and a further 10 are being marketed for disposal by retailers. Five more are being disposed of by administrators.
Opened in 1999, Bluewater is the most prestigious shopping centre in the UK, anchored by John Lewis, House of Fraser and Marks & Spencer. However, the level of space on the market shows that rent increases, combined with the general slowdown facing retailers, have led to some smaller and mid-sized retailers at the centre being squeezed.
Virgin Cosmetics, which pays£285,000 a year for 1,640 sq ft (150 sq m), is even offering to pay a premium to any retailer prepared to take over its unit. Other tenants whose stores are on the market include Quiksilver, Thorntons and Crabtree & Evelyn.
'They just can't make the sums stack up,' said one property agent, who has been instructed to dispose of a store at Bluewater. 'The sales aren't sufficient to meet the rent and the problem is that all your competitors are there taking away your shoppers.'
Landlord Lend Lease admitted that letting units had become tougher. 'Leasing in this market is challenging,' said head of leasing Russell Loveland. 'We have international retailers coming in, but when it comes to homegrown retailers wanting to expand, there aren't many of them.' He stressed that 39 deals were done at Bluewater last year.
The news adds weight to concerns that rents in shopping centres are continuing to skyrocket, despite the much tougher environment faced by retailers. In the past week, two more retailers - Silverscreen and Actif Group - have gone into administration after being unable to pay their March rent bills. Both have stores at Bluewater, with Silverscreen paying rent of£375,000 a year.
Loveland said administrations are a big issue for landlords, because they tie up units for up to six months. A unit vacated by Ëísenegger last year is still vacant. He denied unrealistic terms were to blame, but said 'We need to agree terms that are suitable to us and our investors.'
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