1. EAT & DRINK LONDON
Eat & Drink LondonINSIGHT INTO THE PROPERTY MARKET THAT SERVES LONDON’S FOOD AND BEVERAGE SECTOR
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EAT & DRINK LONDON
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EAT & DRINK LONDON
RESEARCH SCOPE
70%dining
30%drinking
400+independents
70+branded offers
570outlets
12locations
WELCOME
Eat & Drink London is a new
Colliers International research
study which provides unique
insights into the property market
that serves London’s rapidly
evolving food and beverage sector.
To create this groundbreaking research, we have identified
12 locations across the Capital where the proliferation of
restaurants and bars is booming.
Each of our studies will focus on an established location
and also one that is on the upgrade.
In this report we look at Mayfair, the epicentre of fine dining in
London, and also the emerging dining scene around Middlesex
Street E1 – an area which is emblematic of the revolution in the
eating and drinking scene around the Square Mile and its fringes.
We hope you find this research useful and would be delighted
to discuss its findings with you.
Cover image: Kingly Court at Carnaby Street
This page: Wahaca on Charlotte Street
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EAT & DRINK LONDON
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THE RENTAL LANDSCAPE
HOT FOOD,
HOT RENTS
Mayfair has the highest number of fine dining
restaurants while Soho has the highest number
of casual dining concepts – both have been
enormously successful in attracting a range of
London’s most desirable restaurant offers.
The internationalisation of eating and drinking
in London has been extraordinary. We have
seen a continued influx of new brands from
Continental Europe, Russia, America, the Middle
East and right across Asia encompassing every
type of offer from street food to fine dining.
The map opposite profiles the change in rental
tone during the past five years and draws on data
collected from Colliers extensive Agency and
Lease Advisory work throughout the sector.
In the City, five-day trading locations have
seen modest rental growth, but locations
that support seven-day trading around
tourist hubs such as St Paul’s cathedral have
seen rents move forward substantially.
This trend will continue as operators target
the City and open up new pitches. The uplift
in rental tone at One New Change is a clear
example of the changing landscape.
Currently the City has a higher percentage of white
tablecloth establishments than any other area in
the Capital. However, we are starting to see more
diversified offers establish themselves as the City
comes in line with the insatiable appetite for new
concepts which can be seen elsewhere in London.
This greater level of demand will give rise
to progressive rental growth.
Rents in London’s prime dining locations, Mayfair and
Soho, have risen substantially during the past five years. LARGEST F&B
CONCENTRATION
Prime Soho
(63% of all units)
SMALLEST F&B
CONCENTRATION
Bishopsgate
(20%)
TOP LOCATION
FOR PREMIUM
RESTAURANTS
Mayfair
(9)
TOP LOCATION
FOR CASUAL/
MID-MARKET
RESTAURANTS
Covent Garden Piazza
(27)
QUICK SERVICE
Cheapside
(20 operators)
Lambeth
Belgravia
Mayfair
Marylebone Fitzrovia
Southwark
South Kensington
Kensington
High Street
Brixton
Camberwell
Soho
Holloway
Leicester Square
Knightsbridge
The Southbank
Kings Cross
The
Regents Park
The
Shard
Tower of
London
Hyde Park
Kensington
Gardens
Battersea
Park
The
Tate Modern
St Pauls
Catherdral
London
Eye
Houses of
Parliment
Victoria and Albert
Museum
Hyde Park
Corner
Victoria
Charing
Cross
Piccadilly
Circus
Oxford
Circus
Regents
Park
Chancery
Lane
London
Bridge
Monument
South
Kensington
Waterloo
Elephant
and Castle
Liverpool Street
Kings Cross
St Pancras
Hyde Park
Corner
Victoria
Charing
Cross
Piccadilly
Circus
Oxford
Circus
Regents
Park
Chancery
Lane
London
Bridge
Monument
South
Kensington
Waterloo
Elephant
and Castle
Liverpool Street
Kings Cross
St Pancras
BISHOPSGATE
Rent per sq ft 2009 £45
Rate per sq ft 2014 £60
% Change 33%
MAYFAIR
Rent per sq ft 2009 £75
Rate per sq ft 2014 £125
% Change 67%
KNIGHTSBRIDGE
Rent per sq ft 2009 £67
Rate per sq ft 2014 £100
% Change 41%
LEICESTER SQUARE
Rent per sq ft 2009 £175
Rate per sq ft 2014 £200
% Change 14%
SOHO
Rent per sq ft 2009 £80
Rate per sq ft 2014 £110
% Change 38%
SPITALFIELDS
Rent per sq ft 2009 £40
Rate per sq ft 2014 £65
% Change 63%
MARYLEBONE
Rent per sq ft 2009 £65
Rate per sq ft 2014 £90
% Change 38%
CHARLOTTE STREET
Rent per sq ft 2009 £67.50
Rate per sq ft 2014 £95
% Change 41%
SOUTHBANK
Rent per sq ft 2009 £40
Rate per sq ft 2014 £60
Change 50%
ST CHRISTOPHER’S
PLACE
Rent per sq ft 2009 £140
Rate per sq ft 2014 £180
% Change 29%
COVENT GARDEN
Rent per sq ft 2009 £150
Rate per sq ft 2014 £200
% Change 33%
ONE NEW CHANGE
Rent per sq ft 2009 £35
Rate per sq ft 2014 £50
% Change 43%
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EAT & DRINK LONDON
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PLANNING CAN BE
THE KEY TO MAYFAIR
Its restaurant market is currently
enjoying unprecedented levels of demand
despite rents spiralling upwards.
Demand in Mayfair is almost exclusively from the
premium/fine dining segment of the market and is
now being predominantly led by new international
concepts looking for representation in London.
Around two thirds of recent lettings in prime Mayfair
locations have been to international operators.
Berkeley Street has quickly become a
particularly favoured pitch for international
restaurant concepts with a new and exciting
line up emerging to join Novikov and Nobu.
This influx has driven up the entry costs and
enabled landlords to be extremely selective
when accepting new offers. The marketing
of the former NatWest bank building on
Berkeley Square vividly illustrated this when
Caprice Holdings had to beat off competition
from 17 other high quality operators for the
prominent corner unit at a rent of £1.1m.
In these circumstances, it’s not surprising
that leases are changing hands for multi-
million pound premiums. Historically the
level of premium that was paid for a lease was
predicated on a multiple of net profit. However,
in such a fiercely competitive market this
correlation no longer applies: operators are
essentially prepared to pay substantial ‘key
money’ purely to get a foothold in Mayfair.
Where new leases are being granted the prevailing
rental tone is around 67% higher than five years ago.
With demand high and supply tightening, a
robust approach to planning is increasingly
important to securing the right property.
Westminster Council’s Unitary Development
Plan stipulates that new leisure uses of over
500 sq metres can only be granted in exceptional
circumstances. This has historically been tough
to challenge but there are now signs that there
is more scope for securing a change of use.
A recent planning appeal decision in Grosvenor
Square made it clear that a large restaurant should
be granted consent as the UDP policies were
deemed to be outdated in the light of the new
national guidance in the National Planning Policy
Framework. Westminster was unable to identify
specific harm arising from the proposal and so
the much-vaunted ‘presumption in favour
of sustainable development’ prevailed.
The message for operators and landlords
who want to unlock the restaurant or leisure
potential of Mayfair properties is that they need
to have access to advice which encompasses
both the A3 occupational market and also
planning strategy.
There are many new locations that are developing a
burgeoning eating and drinking scene in London, but the
sheer quality of the Mayfair offer remains unequalled.
• Unprecedented levels of operator demand driven
by international market entrants
• Prime rents up by 67% in past five years
• Berkeley Street establishing new status as prime pitch
• Robust approach to planning can unlock site potential
• Substantial premiums becoming the norm
as demand continues to outweigh supply
• Gordon Ramsay takes lease on the former The
Living Room in Heddon Street at £115 per sq ft
• Café Pushkin, Bocconcino and Caprice Holdings
receive A3 planning consent for their new outlets
• Russian restaurateur Arkady Novikov acquires
the Dover Street Wine Bar for a reported
£1.6m premium
A TASTER
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SPOTLIGHT MAYFAIR EAT & DRINK LONDON
MAYFAIR BY
NUMBERS
22%
are casual/
mid-market category
67%
of the drinks
offers serve alcohol
56%
of food operators were
premium/fine dining
33%
of the drinks
offers are cafes
28%
were quick
service
of Mayfair units surveyed are traded
by a food & beverage operator
Food Offers Drinks-led
Branded
operators
Independent
(<5 branches)
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EAT & DRINK LONDONON THE UP
MIDDLESEX
STREET E1
But today if you’re peckish and on the eastern
fringe of the City there are good reasons to
check out the eateries of Middlesex Street.
An area that can boast a street called Frying
Pan Alley is always going to have potential
for the food business. It has been steadily
attracting hip independent and multiple retailers
along with bar and restaurant operators
and is following the lead set by development
in and around Spitalfields Market.
The location has developed a tremendous
demographic cross-section. ‘City types’ mingle
with a younger set drawn from new student
accommodation developments while the residential
towers being built around Aldgate are bringing
an influx of new affluent permanent residents.
As a consequence, the area around Middlesex
Street has become a 6-7 day trading location – in
contrast to the majority of Square Mile where bar
and restaurant opening tends to still be confined
to the working week.
The initial focus for A3 operators in the eastern City
fringe was for representation in Spitalfields Market
or Shoreditch, but as competition for sites increased
so demand has spread to Middlesex Street,
Widegate Street, Artillery Lane, Steward Street and
Strype Street creating an upward pressure on rents.
Earlier this year Honest Burger paid an open
market rent of £55 per sq ft to secure its outlet
on Widegate Street while Byron’s Steward Street
rent review was settled at nearly £63 per sq ft.
Another influence is the nearby Devonshire
Square estate which has become a focus for
foodies with a regular world food market and
Mark Hix becoming the latest arrival in the square
alongside fellow super chef, Marco Pierre White.
Blackstone owns the 630,000 sq ft Devonshire
Square estate and is now delivering a strategy
to improve the tenant mix and make the
square a seven-days-a-week destination.
Against this backdrop of improvement, our data
indicates that top A3 rental levels in the Middlesex
Street area have increased by more than 50% in the
past five years. This uplift has been achieved ahead
of the 2018 arrival of the new Crossrail station at
Whitechapel which will bring a further boost to
the area.
We believe that with major new local
development, existing high-quality environments
such as Devonshire Square, and a rapidly improving
demographic profile, Middlesex Street and its
environs will continue on an upward trajectory
as a place to eat and drink in London.
Not very long ago, if you’d found yourself in Middlesex
Street you might have been en route to Petticoat Lane
market or heading to Brick Lane for a curry.
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• Freshdevelopmentandrevitalisedschemes
such as Devonshire Square are leading a
eating and drinking renaissance in the area
• Exciting existing operators including
The Breakfast Club, Grapeshots,
La Tagliata and the William Ale &
Cider House are encouraging new
concepts to come to the area
• The area is developing into a
seven-days-a week trading environment
• Top rents have risen by c50% in the past
five years
• Residential development around Aldgate is
bringing new permanent affluent residents
while Crossrail will transform access
• The restaurant units at Helical Bar’s new
Artillery Lane development are being
marketed at c.£60 per sq ft on best space
• 11 Artillery Passage: unit let to
Ottolenghi at c.£60 per sq ft
A TASTER
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EAT & DRINK LONDON
FRESH
DEVELOPMENT
AND REVITALISED
SCHEMES SUCH
AS DEVONSHIRE
SQUARE ARE
LEADING A NEW
EATING AND
DRINKING SCENE
IN THE AREA
6. COLLIERS INTERNATIONAL
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CHAINS VS INDYS
NATIONAL COVERAGE,
LONDON SPECIALISM
It is one of the most innovative and diverse
parts of the UK economy, and our service
covers casual dining and fine dining restaurants,
themed and branded bars, traditional pubs,
gastro pubs and nightclubs through to coffee
shops and grab-and-go ‘street food’ outlets.
The combined approach of our Agency and Lease
Advisory teams, who have exhaustive market
knowledge, has proven successful in securing
the best possible outcomes for our landlord and
occupier clients throughout Central London.
An integral part of our offer is the Central London
Lease Advisory Team which has a proven track
record of negotiating the best possible outcomes
for our landlord and occupier clients. Working
closely alongside its Central London Agency
colleagues, the team has complete market coverage.
Meticulous market research is at the heart
of the Colliers service and we are able to
produce targeted market perspectives which
relate to the specific needs of clients.
Through its Agency, Lease Advisory and specialist
Licensed & Leisure teams, Colliers International
provides a comprehensive service across the UK food,
beverage and leisure market.
DAN TAYLOR
Head of Central London
Retail Lease Advisory
020 7344 6871
Dan.Taylor@colliers.com
MARK CHARLTON
Head of Research
& Forecasting
020 7487 1720
Mark.Charlton@colliers.com
ROSS KIRTON
Director – Agency,
Licensed & Leisure
020 7487 1615
Ross.Kirton@colliers.com
CONTACTS
CHAINS VS INDYS
WHO’S DOING WHAT AND WHERE
London offers a magnificent diversity of places to eat and drink
but the split between independent operators and branded chains
is very different depending on where you are in the capital.
It will be fascinating to see how this mix changes over time…
90%
TOP LOCATIONS FOR…
Prime Soho
Regent St
Charlotte St
Independent Operators
81%
79%
One New Change
Covent Garden
Spitalfields
Branded Chain Operators
58%
45%
41%
SPLIT BETWEEN CHAIN AND INDEPENDENT
OPERATORS ACROSS RESEARCH SAMPLE
28%
Chains
72%
Independent
CITY VS SOHO
Independent Chain
55%
45%
91%
9%
City Soho
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