Retail rents have fallen to their lowest level since the mid-1990s and can be expected to decline for a further three years, according to a report published by property consultancy Colliers CRE.

The Midsummer Retail Report, published today, will serve as a sobering reminder to retailers and their landlords that they can expect to feel the heat on the high street for some time.

It reveals that high street rents are now 12 per cent below their 1989 figure, and it predicts a further drop of 15 to 20 per cent in the next three years. Despite an average increase of 1.1 per cent in rentals in the 12 months to May this year, in real terms rents have fallen by 3.1 per cent since the early 1990s.

Colliers CRE director of research consultancy Dr Richard Doidge said: “By stripping out inflationary rises to paint a clearer picture of how the retail market is actually faring, we can see that performance in the sector has been very weak and, in our view, is likely to become worse.”

The report also highlights a fall in the amount of new shopping space in the pipeline. In 2006 the shopping centre development forecast for 2008 was around 15 million sq ft (1.4 million sq m) which Colliers CRE is now estimating at around half that figure at 8 million sq ft (743,000 sq m).

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