Queen Street site’s value drops £600K in two decades
THE mixed fortunes of Jersey’s high-street landlords have been laid bare after it was revealed that one retail outlet has plunged in value by £600,000 over two decades, while rents a few doors down are going up.
Blue Diamond, which is best known for owning St Peter’s Garden Centre, has declared, for the first time, in its annual accounts a write-down on 37 Queen Street – currently home to Ashworth & Bird – which it co-owns through an associate company.
The company estimates that the unit is worth £600,000 less than what was paid for it in 1998 – a drop driven by a sharp reduction in rental yield.
However, just a few hundred metres down the road in King Street, agents say that prices – and therefore property values – continue to rise as the area enjoys its own ‘bubble’, with an increase in rents of 20% in the past six years, according to one agent.
The unit at 37 Queen Street is currently being marketed for rent with Buckley & Co for £90 per square foot – significantly less than the £110 to £115 that agent Simon Buckley estimated it would have attracted in 1998. When inflation is taken into account, the figures represent a 60% reduction in real-term rental value in 20 years.
Richard Hemans, Blue Diamond group finance director and company secretary, said the write-down had been been caused by the ‘movement of traffic away from that end of St Helier’.
Mr Buckley, meanwhile, said landlords were now having to be realistic about what they charged as the impact of internet shopping was felt.
‘There is a seismic change in the way retail is undertaken,’ he said. ‘People don’t seem to have made the connection between not shopping on the high street and shopping on the internet, and the more that happens the less vibrant the high street becomes.’
However, he added that nature of individual stores also needed to be taken into account, recalling ‘significant competition’ from eight to ten traders when the former BHS store in King Street came up for rent. The departure of Next from Queen Street, and the fact that the building remains empty while Next runs down its lease, is also thought to have contributed to a decline in footfall in the area.
Previously, traders in Colomberie have also cited the pull of the International Finance Centre to the other end of town as having had a negative impact on them.
However, Nick Trower from commercial property experts D2 Real Estate said that Jersey’s high street was performing very well compared to most in the UK.
‘In fact, on King Street, since 2013 we have seen an increase of 20% on rents. But this is King Street and has its own bubble,’ he said.
‘Queen Street has been hugely affected by Next vacating their premises as this has removed a large amount of footfall from the area. Queen Street is struggling but this can’t be just blamed on rents.
‘Internet shopping will take a lot of the blame for the reduction of sales but to counter this, Amazon and Dyson have started opening stores on high streets. This obviously shows that there is value in high-street retail as well as online. The retailers that seem to be performing the best are the ones who are adapting and providing online as well as high street shopping.’
He added: ‘Compared to the UK, Jersey is actually performing very well and is resilient. Our vacancy rate here is substantially lower than the UK and we are seeing regular demand for retail units.’