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LONDON-UK retailers are optimistic about their trading prospects, according to the first King Sturge Retail Tenant Survey. The agent surveyed occupiers in 50 shopping centres and found that 59% of shopping centre tenants and 67% of retail park tenants believe their turnover will increase over the next 12 months.

But shopping centre tenants fear that their costs will increase this year. Of the in town retail tenants, 52% believe their costs will increase while 71% of out of town retail tenants think they will stay the same or be lower next year. Transportation is another key issue for retail tenants. Nearly three quarters (72%) of shopping centre tenants believe there is a need to improve public transport in their city, compared with 50% of retail park tenants.’With a minority of tenants being satisfied with the current car parking arrangements, public transport is vital to the profitability of shopping centres and retail parks. Unless town centres are able to address this problem, the pressures of the market place will determine the future profitability of retail locations,’ says Dr Angus McIntosh, head of research at King Sturge.

The survey also looked at the impact of Sunday trading, which has only been permitted in the UK since the mid-1990s. Sunday trading has not improved their overall turnover, say 24% of shopping centre tenants and 21% says it had not improved profits. But the picture is very different out of town. Only 17% of retail park occupiers said their turnover had not increased and only 9% said Sunday trading had not improved their profits.

“It is clear that the advent of Sunday trading favours out of town retail parks, at the expense of the shopping centres, many of which are located in city centres. The implication is that Sunday trading may accelerate still further the drift of retail activity away from town centres, which undermines government planning policy,’ says Dr McIntosh.

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