Demand for sites in Greater London fell from 36.9% of all UK requirements in 2016, to 33.7% in 2017, a Cushman & Wakefield survey of operators has found.
Operators blamed high competition, rising rents, changes in rateable values and increases in the national living wage for the shift in focus from London to the regions.
The survey also identifies the lag between requirements and physical openings, with operators only opening a net 336 sites, against 797 required sites, meaning only 42% of targets were realised.
Compared to the previous year, requirements for sites fell by 14% to 688 in 2017, which is believed to be a result of uncertainty over Brexit and the potential for tighter labour laws influencing expansion strategies.
Demand for bars & wine bars and pubs fell the most, according to the survey, with requirements down 34% and 55% respectively.
Cushman & Wakefield predict occupier demand will strengthen in 2017 and 2018, taking into consideration planned versus actual take-up, with net additions of 1,414 F&B units in 2017 and 1,515 in 2018.
The report argues that given occupier demand forecasts, and an increase in available spend, conditions would be “more favourable then in recent years” – though it warned of familiar risks.
It concludes: “Several downsides remain, and the increase in the actual volume of spend is forecast to be limited in 2017 and 2018.
“The main risks include rising inflation, potential business rates increases, a rise in the living wage and potential tighter labour laws.
“These factors have the potential to adversely impact the F&B sector in the short to medium term and put pressure on certain operators and retail destinations.”