• Why Is Measuring Risk Important to Retail Investors?

The UK retail sector has been significantly impacted over the last 10 years by company administrations and Company Voluntary Administration (CVAs), with 2018 even being referenced to as “The Year of the CVA” due to the number of high-profile companies using the restructuring tool to avoid insolvency.

With rising inflation, increased costs from public policy changes on National Insurance, tariff impacts and global conflict, the resilience and financial health of retailers has never been more important for investors assessing and monitoring their portfolios.

• What Retail Analytics Tools Can Help Retail Investors?

With the upcoming release of new features to Retail Analytics Pro product, Green Street will enhance its analytical offering by gaining new data on the corporate risk of national chains across the UK from Company Watch, a market leading financial risk analytics company.

Using data from Company Watch, Green Street’s Retail Analytics Pro will offer enriched data-driven scores that reveal the real financial health for UK and Ireland registered companies.

• Who is Company Watch and how do they rate financial health?

Company Watch is a UK-based specialist in financial risk and credit analysis, leveraging machine learning and public company data to help businesses predict distress, optimise due diligence, and monitor supplier.

Its flagship H Score® product rates each UK company’s financial health on a scale of 0–100, flagging those with scores below 25 as high-risk warning cases and helping foresee insolvencies before they occur.

Working with leading banks, insurers, large corporates, fraud and underwriting teams to monitor financial health, predict insolvency risk, and enrich portfolio management dashboards.

• What are the key risk factors to evaluate Tenant Default risk?

There are seven key risk factors that are considered when evaluating corporate risk:

1. Profitability – profit generation to meet its short-term commitments
2. Liquidity – liquid assets such as debtors and cash in relation to rate of expenditure
3. Stock and Debtors – management of working capital, with a preference for lower stock and debtor balances
4. Current Assets – current assets provide coverage over the company’s liabilities
5. Equity Base – company’s equity base in relation to its liabilities as reflection of their stable financial position
6. Current Funding– a higher reliance on current liabilities to finance assets is negative as it indicates liquidity risk or financial instability
7. Debt Dependency – assessment of a company’s dependence on debt to fund its tangible assets, with short term debt particularly viewed negatively given is reduced flexibility

The new and enriched metrics will soon be available in Retail Analytics Pro, providing clients with unique financial insights to help them optimise their portfolios

The post Introduction to Tenant Default Risk appeared first on Green Street.

Investors, brokers, and retailers alike have long relied on demographic data to guide decisions, from evaluating asset quality to understanding catchments. However, processing this information and making cross-market comparisons can be challenging. Green Street’s TAP Scores simplify this by combining income, population density, educational attainment, and housing affordability into a single score, from 1 to 100, that captures the demographic strength of a location. This standardised metric helps identify comparable catchments, benchmark new sites, and forecast sales performance with greater confidence.

Here’s a look at the four core demographic metrics behind the score and why they matter.

 Household Income

Median household income is a critical indicator because it directly reflects the local population’s spending power. Areas with higher incomes can typically support a stronger mix of tenants, including premium retailers, which often generate higher sales productivity. Wealthier catchments are generally more insulated from economic downturns and can offer more stable rental income and long-term asset performance. It also informs decisions about tenant mix, rent levels, and investment strategy, helping to align the asset with the needs and expectations of its local customer base.

Population Density

 Population density indicates how many people live within a defined area. High density means more potential customers nearby, supporting steady footfall for retail tenants. Higher population density signals the opportunity for stronger sales volumes and tenant demand, making it a key measure of a location’s consumer base.

Education Attainment

Areas with a higher share of graduates often have stronger job markets, particularly in professional sectors, which can drive higher income levels. A higher percentage of degree-holders often correlates with higher discretionary spending levels, and a stable employment base that is resilient to economic shocks. This creates retail destinations that can generate above average spending levels which create better investments for landlords and strong performing stores for retailers.

Affordability

The affordability ratio (calculated as median home value over median household income) captures the cost-of-living pressure in an area and gives a simple snapshot of how affordable housing is relative to local earnings, while also gauging whether local consumers have room for non-essential spending.

For most households, housing is by far the biggest single expenditure. In places where the affordability ratio is high, a larger share of household income goes toward housing costs, leaving less disposable income. While high house prices can reflect desirability, if they significantly outpace incomes, they may limit household spending power.

By combining these four powerful metrics, we get a clear picture of local demographic strength. TAP Scores offer a clear, data-driven view of local demographic quality, helping clients make smarter and faster decisions.

The post Powering Retail Strategies: Trade Area Power Scores Launch in the UK Market appeared first on Green Street.

Vacancy Rate %:

From 2015 through to 2019, all five streets maintained low vacancy rates, typically below 10%. Long Acre and Carnaby Street even achieved periods of zero vacancies during some years, indicating their desirability and strong retail performance.

However, post-2019 brought increasing volatility, particularly post-pandemic when the impact rippled through the retail sector nationwide, and London’s shopping streets were no exception.

• Long Acre emerged as the most volatile, with vacancies soaring to over 18% between 2022 and 2024. However, in 2025 the vacancy rate on the street saw a steep drop back to levels not seen since 2018, suggesting a positive turnaround and return to vibrancy for the area.

• King’s Road also experienced a sharp recovery in 2025, ending the decade with one of the steepest drops in vacancy. With rental demand now back at pre-pandemic levels, the area has reaffirmed its status as a high-demand destination.

• Marylebone High Street maintained relative stability, with the lowest and most consistent vacancy levels over the period analysed, with vacancy rates never reaching over 10%, even during the pandemic years, indicating a strong and established retail offering.

• Regent Street saw a more challenging trajectory. Vacancy rates nearly doubled between 2020 and 2021, peaking in 2023. Although there’s been improvement, the street has not yet returned to its pre-pandemic strength.

• Carnaby Street also saw a similar trend, with vacancies peaking in 2021. However, the recovery of the street has been volatile in recent years with noticeable peaks and troughs.

Shifts in Retail Mix:

Beyond vacancies, another key trend over the past ten years is the transformation of the retail mix on these high streets — a reflection of shifting consumer preferences.

• Comparison retail has declined significantly on the majority of the streets, with Long Acre seeing the largest decline of nearly 20% during the last 10 years. A decline in Comparison offering is a trend echoed across GB in key shopping areas, with retailers replaced by an increased leisure and service focussed offering.

• Marylebone High Street stood out as the only location to grow its Comparison offering, with a 10% increase, counterbalancing a notable decline in its Convenience and Service categories.

• Leisure and Service have seen increases across many of these streets, with Long Acre again seeing the largest shifts, indicating a strategic shift in focus in this area over time. This shift indicates a broader reorientation toward experiential and lifestyle-driven businesses, aligning with the ever-evolving urban consumer.

London’s retail landscape is transforming, not just in response to economic cycles, but also due to a structural shift in consumer priorities. Streets that strategically adapt their tenant mix over time to reflect this will be better positioned to maintain lower vacancy rates and thrive in the next retail era.

Green Street’s Retail Analytics Pro unlocks new possibilities for investors, occupiers, and public sector stakeholders, supporting data-driven decisions that enhance retail performance and local regeneration. By combining advanced data science with extensive industry expertise, Green Street continues to set new standards for real estate insights, empowering stakeholders to make smarter, more informed decisions.

Click here to learn more about Green Street’s new
Retail Analytics Pro

The post Retail in Motion: How London’s Iconic Shopping Streets Are Evolving appeared first on Green Street.

At Green Street, our granular data allows for detailed analysis at the Local Authority and High Street level, identifying exactly where HSRAs could have the most transformative effect. For investors, local planners, and landlords alike, this insight offers a powerful lens to understand risk, opportunity and potential value creation. 

For landlords and investors, this represents more than just a policy change – it’s a shift towards more proactive asset management. Rather than allowing high street properties to remain idle and lose both value and relevance, the HSRA scheme enables councils to reintroduce these spaces to the market through vibrant town centres and reduced retail voids, while unlocking previously untapped value. 

From an investment standpoint, vacant properties can quickly shift from being assets to becoming liabilities. Beyond the loss of rental income, empty units can negatively impact neighbouring properties, reduce footfall, and create a sense of decline in an area. The HSRA scheme offers a compelling solution – by reactivating long-vacant space, landlords may see not only financial returns but also reputational and community value. 

The scheme has been adopted by 11 councils to date, but as more councils gain confidence and join in, HSRAs may become a key lever in boosting town centre resilience. 

Percentage of Local Authorities within GB Average Persistent Vacancy Rate %:

Green Street is uniquely positioned to help stakeholders understand where HSRAs might have the greatest impact. Across Great Britain, an average of 9.6% of retail units qualifying for the scheme, having been persistently vacant for over a year. But a regional breakdown reveals striking variation in potential uptake. 

For example, 100% of Local Authorities in the North East have a higher-than-average proportion of qualifying units – suggesting the scheme could make a significant difference in these areas. By contrast, in Greater London, only 3% of Local Authorities exceed the 9.6% threshold, highlighting the more contained nature of persistent vacancies in the capital. 

As the retail landscape continues to evolve, initiatives like HSRAs – and the data to support their implementation – are set to play a pivotal role in shaping the future of the high street. 

Green Street’s Retail Analytics Pro unlocks new possibilities for investors, occupiers, and public sector stakeholders, supporting data-driven decisions that enhance retail performance and local regeneration. By combining advanced data science with extensive industry expertise, Green Street continues to set new standards for real estate insights, empowering stakeholders to make smarter, more informed decisions.

Click here to learn more about Green Street’s new
Retail Analytics Pro

The post High Street Rental Auctions: A new Lever for Revitalising Town Centres appeared first on Green Street.

Openings and Closures

Green Street tracked more than 206,808 outlets operated by multiple operators across Great Britain and found that chain outlet closures have dropped to their second-lowest level in 10 years, at 12,804. This translates to an average of 35 closures per day.

Total GB Openings and Closures by year:

Daily opening figures meanwhile stayed the same averaging 25 openings per day. While this remains higher than the pandemic years, it still lags behind the pre-pandemic high of 34 per day in 2017.

Across Great Britain, the landscape remains relatively steady, with net changes ranging from -1.4% in Wales (a loss of 131 outlets) to -2.3% in the East of England (down 452 outlets). While closure rates fluctuate between regions each year, the longer-term trend over the past decade shows all regions landing within 2 percentage points of the national average for cumulative closures.

Category analysis

Convenience stores and coffee shops led the way in 2024 with more than two net openings each week, driving growth across the leisure, grocery, and value sectors. Large supermarket chains accelerated the growth of convenience stores as they continued expanding their smaller-format stores, contributing to 171 net new openings in this category. Coffee shops followed closely with 105 net additions, as they focused on expanding their out-of-town and drive-thru locations.

At the other end of the spectrum, ongoing shifts in how people live, shop, and work — alongside a handful of high-profile restructurings — drove many of 2024’s closures. With chemists, pubs and bars, banks, and car-related outlets accounting for half of all net closures.

The 2024 results show signs of recovery, with closures continuing to stabilise and a reduction in consolidation with much of the portfolios now leaner and fit for purpose. 2025 will be a challenging year, with costs rising due to new tax policies impacting margins.

Green Street’s Retail Analytics Pro unlocks new possibilities for investors, occupiers, and public sector stakeholders, supporting data-driven decisions that enhance retail performance and local regeneration. By combining advanced data science with extensive industry expertise, Green Street continues to set new standards for real estate insights, empowering stakeholders to make smarter, more informed decisions.

Click here to learn more about Green Street’s new
Retail Analytics Pro

The post Retail Recovery: FY 2024 Store Openings and Closures – PwC report driven by Green Street Data appeared first on Green Street.

CTP (CTP): Gateway to Central and Eastern Europe
18 July 2023

In Mid-July, Green Street reached a milestone of 50 Listed PropCos under coverage after announcing that the firm initiated coverage of CTP (CTP), a €13bn-GAV Industrial PropCo. Key takeaways from the CTP report are listed below:

• Largest Continental Industrial PropCo; c.90% of GAV in Central and Eastern Europe
• Founded in 1998, listed in ’21, and has weathered the rise in real rates unscathed
• Strong internal growth; 5-yr LFL NRI CAGR of 4.6%, ~100 bps above Conti peers
• Voracious appetite for development-led growth – targets doubling GLA by 2030
• Development profit margins stabilised at ~30%; >9% yield-on-cost achievable
• Vanilla corporate structure, palatable balance sheet metrics and sufficient liquidity
• CEO’s c.75% holding warrants GAV discount, but ‘skin-in-the-game’ placates fears
• Offers the highest risk-adjusted five-year REIT returns across Europe at >11% p.a.

Pan-European Commercial Property Price Index: Still Waters Run Deep
7 July 2023

The Green Street Commercial Property Price Index remained flat during the second quarter of 2023. The index, which measures pricing across a broad swathe of B/B+ quality Pan-European commercial properties, sits 21% below its May ’22 peak. Performance varied marginally across core sectors over the last three months. Retail property prices declined ~3% due to yield expansion, while office prices remained stable. Residential and industrial prices grew ~1% each, owing to positive cash flow contribution.

U.K. Self-Storage Sector: What to Make of Its Recent Underperformance
July 25,2023

The U.K. Self-Storage sector has underperformed the GPR Europe Index by c. 1,100 bps in the last three months. This is a stark turnaround in fortunes as the longer-term performance of storage REITs is exceptional (e.g., 3-yr outperformance of c. 2,900 bps p.a.). U.K. storage REITs have also lagged relative to their U.S. peer group recently (U.S. storage REITs have underperformed the RMZ by c. 700 bps in the last three months), which is somewhat odd as the deceleration in Net Rental Income growth from the boom times of the pandemic is transpiring at a much faster clip in the U.S. than in the U.K.

While the economic outlook for the U.K. in general is slightly gloomier, and the narrative of a ‘soft landing’ in the U.S. has helped boost the performance of storage REITs there, the U.K. storage sector’s poor relative performance recently is still noticeable. The key question now is whether U.K. storage REITs are sufficiently cheap? Whilst our long-term bullish outlook on the sector’s fundamentals is unchanged, our answer in the here and now is: “not as much as we would need to see to go net long the sector”.

The post Month in Review: Three Must-Read Pan-European Research Reports appeared first on Green Street.

Key takeaways:

• Rechler was forthcoming when speaking about the weak near-term prospects for the office sector given the uncertainty associated with remote work and a potential recession. That said, he remains positive on the long-term outlook for New York given the city’s diversified talent pool and status as the financial hub of the world.

• Rechler believes that hybrid work is here to stay and will have some minor negative impact on office demand; however, he noted that return to office mandates and rising office utilization are potential bright spots that suggest tenants still value the office as a crucial place to do business. While hotdesking gained headlines with Google’s recent announcement, Mr. Rechler does not see this gaining too much popularity. As such, he attributes most of the slowdown in office leasing activity to economic concerns rather than entrenched work from home trends.

• The uncertain economic climate and layoff waves have weighed on office demand recently and Mr. Rechler expects this to continue for some time. While this initially started last year in the tech sector, he noted that financial services may be the next industry to ease on office leasing activity given recent events in the banking sector. Overall, he thinks we’re in the early innings of a recession which will take time for the office sector to work its way through, though the sector should recover over time.

• While the sector is challenged, the tenant flight to quality is being reinforced by hybrid work trends, which has allowed higher quality assets to generate more than their fair share of leasing activity. That said, net effective rents for this product still remain pressured as large concession packages are being offered to induce tenancy.

• There is no price discovery in office capital markets creating a lack of clarity around where valuations are for office assets. However, Mr. Rechler was open in saying that valuations that existed before the rise in rates won’t be the same today given the new interest rate regime. He paralleled the current environment to the early ‘90s when the commercial real estate industry went through a valuation paradigm shift. This revaluation period saw a series of restructurings and workouts and Mr. Rechler fears the industry is at that same moment. Once the dust settles, he believes high-quality, well-located assets will revert back to a more normalized range.

• Debt financing continues to be very thin for office assets, and this is likely to be exacerbated by the recent issues that have recently unfolded in the banking sector. The financing environment is even challenging for fully leased office assets with long lease terms and credit tenants. The lenders that are relatively involved are existing lenders that realize they must participate in a refinancing and partner with the existing owners. Most other lenders are hesitant to provide capital given the significant uncertainty around office demand and where valuations will ultimately settle. In many instances, the swift rise in interest rates will result in a re-equitization of capital structures, an environment he thinks will play out through ’25.

• Office conversions have become a popular topic given the weak demand backdrop for office properties. That said, conversions are difficult in practice for several reasons. First, the starting basis for a conversion in New York likely needs to be in the $250/s.f. range (read: much lower New York office values would generally be needed) when a property is fully vacated to make sense from an economic perspective. The next issue is related to zoning, which is a problem today, but the city of New York seems to be willing to ease rules on this front. Third, not every office building has the physical characteristics that lends itself to a conversion. Buildings with smaller floor plates tend to be more conducive to office-to-residential conversions than those with larger floor plates.

Sustainability is becoming increasingly important for the commercial real estate industry, particularly in New York where Local Law 97 is set to enforce fines on landlords for not meeting certain carbon emission thresholds. While the regulation has gained popularity amongst politicians, Mr. Rechler wouldn’t be surprised if there’s a relaxation of certain carbon emissions targets given limited alternative energy sources and an ambitious timeline. On the investor side of things, Mr. Rechler mentioned that certain institutions require a higher standard for sustainability.

The post Office Sector: Survive Until 2025 appeared first on Green Street.

Sector wise, Pan-European industrial experienced a similar fall in real pricing in the GHC (~29%) versus the entirety of the GFC peak-to-trough period (~29%). Given night-and-day better operating fundamentals today than in early ’09, industrial pricing now appears compelling relative to retail, residential or the office sectors, per our latest Commercial Property Outlook published last week. U.K. office, a notable underperformer during the GFC, has corrected as much as U.K. industrial, albeit the real decline of ~34% is still short of the ~41% fall seen during the GFC. Office pricing has the most relative downside of all four sectors.

It is important to remember that Green Street’s CPPI series for each of the four sectors outlined in the charts below track B/B+ quality real estate across each of the 30 metros under coverage in Europe. A-/A quality offices (predominantly the type of office real estate owned by listed REITs) have outperformed B/B+ during the GHC by ~10/15%, unlike in the GFC when office pricing dislocation was much more indiscriminate across both quality and location spectrums.

The post This Downturn Is the Real Deal appeared first on Green Street.

However, reduced commercial real estate transaction volumes combined with tighter bank lending standards, has resulted in negative loan growth for two consecutive months in March and April 2023, per data released by the Federal Reserve earlier this month. Loan growth was either flat or negative across all loan types (residential property, commercial property, farmland, and construction loans).

Takeaways: Financing options for commercial real estate owners have been tough for the past year. CMBS and unsecured bond issuances continue to remain subdued. The contraction in bank loan growth is another metric to watch for as it could result in tougher refinancing options, forced asset sales, and thus provide transactional evidence for declines in real estate values.

The post Macro: Credit Tightening appeared first on Green Street.

Bad debt on bank balance sheets ticked down again in 2022, but the data belies a wave of loans maturing this year that could translate to distressed offerings for equity buyers.

Just $10.4 billion of commercial, multifamily and construction/land loans held by the top 300 banks were nonperforming at yearend, according to Trepp Bank Navigator. That’s 0.5% of total loan holdings, down slightly from 0.6% in 2021, when nonperforming debt totaled $11.9 billion. The top 300 banks had only $1.1 billion of foreclosed properties on their books at yearend, down nearly 17% from $1.3 billion the year before.

As a share of overall holdings, nonperforming loans haven’t accounted for 1% of bank loans since 2015, but market pros say that’s about to change.

Trepp estimates that about $80 billion of bank office loans will come due this year. “Those are all loans that if the lender could step away from … they would love to,” Trepp managing director Matt Anderson said. “The current lenders are faced with needing to either refinance those loans or look at those as heading to default and taking a loss on it.”

Anderson noted that some of those loans will have suffered occupancy and/or income loss, “so even if the lender comes back in with a stapled loan to help keep it afloat, it’s going to be on lower terms, so there’s probably going to be some losses there regardless.”

He added that while bank balance sheets looked strong at yearend, nonperforming loans are a lagging indicator. “It takes a while for actual problems … to then show up in the delinquencies and defaults,” he said. “Then it takes another little while for that to flow into nonperforming loans and foreclosures and REO.”

Opportunistic buyers already are disappointed at the lack of distressed debt being shopped by bankers and borrowers.

Potential trades are being thwarted by a wide bid-ask spread, said Raymond Chalme, chief executive of Broad Street Development who recently launched Paradigm Advisory Group to work with lenders, servicers and property owners dealing with distressed office and apartment properties in New York. That gap “has to move to kind of establish the next layer of watermark,” he said.

“A lot of the equity is probably out of the money,” he added. “A lot of [preferred equity] and [mezzanine financing] is somewhere out of the money, and we’re trying to see where that is.”

Nick Seidenberg, a managing director and loan-sales specialist at Eastdil Secured, said that headlines about commercial real estate are overstating the risk in the market. While office buildings are facing a secular shift in usage and value, the industrial, multifamily and retail sectors remain strong, as do niche property types like student and senior housing and data centers.

“The real distress is on the office side,” he said. “The main difference in office versus all these other asset classes is the re-tenanting cost and the cost to stabilize is so significant.” While staggered maturities and in-place leases may delay trouble for some office properties, chances to buy those buildings at discounts eventually will emerge, Seidenberg said.

He said that, since January, Eastdil has provided lenders broker opinions of value on roughly $16 billion of properties, 80% of which were office properties. “So that’s where the activity will be from, whether loan sales or short sales,” Seidenberg said. “There’s going to be a lot of opportunity for buyers to buy office buildings at a reset basis.”

Trepp’s Anderson said that how much distress eventually emerges will be proportional to how hard a line banks take with their borrowers.

“We all learned a strange lesson from the [global] financial crisis, which was that extend and pretend seemed to work,” he said. “So for the banking industry broadly and all sorts of individual players, when they really rolled up their sleeves and made as many accommodations as they could to keep loans and borrowers afloat, that worked out.”

The post Banks Report Fewer Bad Loans… For Now appeared first on Green Street.