The importance of value
A shop in Oxford Street, say, near Oxford Circus among the most expensive areas, might pay around £450 or more in rent per year for each square foot of frontage it occupied. This is a huge amount. It means that a shop of 2,000 ft2, a normal sized shop, though fairly modest for Oxford Street, would have to pay a total of just over £500,000 per year for the privilege of occupying a small plot of land. The ﬁgure is less than 450 times 2,000, i.e. £900,000 because the back part of the shop is charged at a lower rent using a standard formula. The formula involves halving the rent per square foot in each zone as distance from the frontage increases. The front zone is known as zone A, and rents quoted are for zone A unless they are for big stores where a ﬁgure for square foot rent overall is used. Zone A has a depth of 30 ft in central London and Scotland, but 20 ft elsewhere. The results of the formula in the example of a shop in Oxford Street are shown in Table 4.1 and Figure 4.1.