EDINBURGH has the lowest retail vacancy rate of the UK’s major cities, new research has found.

The number of vacant units has remained steady at 13 per cent, despite the St James Quarter adding 424,000 square feet of retail space to the city, according to analysis from property firm Knight Frank. The new centre increased retail space in the city by 25%.

The research found that the vacancy rate among the UK’s top 10 major conurbations in the nations and regions was 21% by the end of last year. Manchester had the second lowest vacancy rate at 16%, while Glasgow’s stood at 22%.

Euan Kelly, capital markets partner at Knight Frank Edinburgh, said: “Edinburgh has always been a mixed-use city centre, supported by strong footfall. But the introduction of St James Quarter has meant different areas have re-established themselves or begun to carve out their own distinct identities. These different pitches are showing they can exist together, rather than compete.

“George Street, for example, is still performing very strongly and remains the focal point for aspirational and luxury brands in the city. At the start of 2022, the street had a number of ‘to let’ boards but the vast majority were snapped up in relatively quick order by occupiers, and the result is that rents have been moving up from a low post-Covid base.

“Retail more generally has gone through a challenging period, marked by structural changes. But, through that process it is beginning to emerge in better shape, with operators trading well, rents re-basing to a lower, more sustainable level, and business rates reducing as well.

“In turn, we’re seeing more investor interest in the right type of retail property. Last year we had a significant number of enquiries for three assets on George Street, particularly from private wealth given the attractive lot size, tenant profile and obviously location. This trend is set to continue in 2023 and we have a number of clients looking to invest.”