After seeing a shift away from high street and shopping centre retail units during the pandemic, we are seeing some promising movement in the retail sector in 2023. Dundee has become known for its significant investment in its cultural sector, which looks to be continuing and thus having a positive impact on the retail sector. A key example of this is that the Eden Project is expected to open in Dundee in 2026 which will, ultimately, bring with it consumers from all over to support investment in the retail sector.
The Overgate Centre has recently been acquired by Frasers Group, owned by billionaire Mike Ashley. The deal is estimated to be worth £30 million, showing faith in the Dundee retail industry and its 'primary retail location'.
It is hoped that the increase in visitors to the area will result in confidence for all units in the Overgate being filled by both independent and larger national brands. In particular, occupancy of the former Debenhams unit, which has been closed since 2021, would bring a lot of positivity to the area. Recently, it has been announced that Rituals, a Dutch luxury skincare brand, has taken a unit resulting in the creation of jobs for locals and bringing an internationally-renowned brand to the Overgate's line up.
When signing up for a lease within a shopping centre, tenants should investigate their potential liability towards contributing towards the common costs of the building and potentially stringent obligations under the lease terms, such as 'keep open' obligations, and rent calculated on turnover (rather than an agreed or market rate). Internationally and nationally recognised brands are able to uphold and financially support the more onerous obligations of a shopping centre lease so it is hoped others will follow in Rituals' footsteps and see the merits of investing in Dundee's thriving local economy.
Dundee is also seeing independent retailers thriving on its high streets. Typical shop fronts tend to be occupied under ‘whole premises’ leases – the tenant lets everything and looks after the property as if they are the owner (known as ’FRI’ or ‘full repairing and insuring’ leases). However, a tenant can be better protected when a ‘schedule of condition’ is attached – this is a photographic document recording the premises condition on the entry date. This results in the tenant being obliged to return the premises in such the condition at termination and the landlord is also protected from the tenant’s potential damage to the premises.
It is important that all tenant businesses and landlords have specialist solicitors that understand the market and use their experience to protect their interests. Thorntons are experienced in providing advice to local independent, national and international business landlords and tenants in leases of shopping centres, retails parks, High Street and local retail units. Please get in contact with our Nicola McCafferty to discuss any leasing or purchasing enquiries.
