Analysis: New hope for London Oxford Street’s east end

Few shoppers strolling east down London’s Oxford Street from the west end could fail to be impressed by the gallery of department stores and global fashion brands. Then comes the impressive Oxford Circus with its imposing buildings filled with some of the biggest names in retail.

Continue any further, however, and there is an abrupt change in atmosphere. Shop fronts shrink, vacant units appear and, the closer you get to Tottenham Court Road, the more mixed the standard of retail brands becomes.

For David Atcherley-Symes, retail leasing director at developer Land Securities, it is a part of Oxford Street with diminished appeal: “The eastern end has always been a place where you lose the will to carry on walking.

It lacked what the other end has had - it has never had a focus.”

This could change, however, as this disappointing feature of London’s shopping scene is finally poised for a much-needed overhaul. The arrival of Primark at the junction of Oxford Street and Tottenham Court Road has been heralded as the start of a five-year redevelopment that promises to transform the area.

While doubts remain that the eastern end of Oxford Street could ever rival the more renowned western stretch, Richard Dickinson, chief executive of the New West End Company, describes it as “one of the most exciting potential retail destinations in London and the UK”.

It is easy to see why some are optimistic - in 2018 a shiny new transport hub at Tottenham Court Road will be complete, part of the Crossrail project. The regenerative effects of similar station developments have already been seen elsewhere in London. And with transport comes huge footfall and the new space creates opportunities for retailers.

Catalyst for change

There will be significant changes to the area though, before Crossrail opens. In what it describes as “unprecedented opportunities for change”, a recent report by property agency GVA has identified a raft of redevelopment opportunities in the area. It says up to 430,000 sq ft of new or redeveloped retail space could be created in the next decade.

The combination of those developments is also expected to be a catalyst for big changes in the smaller pockets of space in between. Dickinson explains: “Tottenham Court Road is a bit like a rabbit warren at the moment. Retail is the driver of the regeneration for the entire area, and getting it right is a great opportunity.”

A few new shopping sites alone will not be enough to completely transform the street, even with Crossrail, says Ian Parish, executive director of retail for investment firm BNP Paribas. He believes the key is to create the right type of space.

“There’s been such a shortage of opportunities in central London, it’s a long overdue change,” he says. “The challenge is to be able to link ownership and bring in the modern space that the retailers are looking for.”

At present, the small shabby units towards St Giles Circus are doing nothing to attract these modern retailers to the area, and neither are the many small landlords that own them.

Atcherley-Symes says: “Over the past 20 years there’s been a piecemeal ownership around there. The small units are not what retailers are looking for these days.

“[The redevelopment] can only be done by replacing them with big shop frontages that match retailers’ needs.

It’s a great opportunity for us.”

Knock-on effect

For those retailers already in the area and set to stay there post-development, the future looks bright. Health food specialist Holland & Barrett is likely to experience positive effects and, according to Gurdial Flora, property director at its parent company NBTY Europe, is already benefiting from the arrival of Primark.

He says: “Any big name brand entering a new area will always have an impact on footfall, and this was certainly one of the factors we took into consideration when we planned our store in the area.

“Crossrail and Primark are two of the biggest drivers for change to this side of Oxford Street, and we would hope for them to have a beneficial impact on footfall in the area.”

In the long term, Flora also expects to see a change to the tenant mix. He says: “Any significant launch in the area, and the new footfall it brings, will mean greater demand for units. This will inevitably mean the rents increase, possibly leading to some of the independents leaving the area.”

While change is inevitable, says Parish, he warns retailers not to expect an imminent transformation, despite Primark’s arrival. He observes: “There’s still a long wait, and there could be increased rent in the meantime. I don’t think that part of the street is going to see enhanced footfall for another four or five years at best.”

And while the benefits of a big name draw such as Primark are undeniable, Peter Mace, head of central London retail for Cushman & Wakefield, believes a critical mass needs to be achieved.

He says: “It’s clearly a step in the right direction, but it needs five or six big stores to open, with the likes of New Look, River Island and Uniqlo in the area. Retailers will look at the area but there are still concerns.”

Primark’s move to Oxford Street’s eastern end is a big confidence boost for the area but, until further regeneration is evident, many other retailers will be reticent. Crossrail, 20 years in the making, is without doubt a coup for Tottenham Court Road but as retailers remain cautious and selective about expansion, its rebirth as London’s hottest retail destination may still be a little way off.