Shop vacancies rise again in post-Christmas lull
8 Mar, 2010, UK
Over 10% of shops on the UK’s high streets are now vacant or available to lease according to the latest Retail Availability survey from real estate adviser Cushman & Wakefield.
The figure of 10.7% at 1st February is a marginal increase of 0.4% over the previous three months when availability fell for the first time in 2009 by 2.3%. That figure was boosted by temporary lettings in the run up to Christmas. The new figure however is almost 2% below the peak recorded in August 2009 of 12.6%.
At 1.5% of the total number of shops surveyed, availability as a result of retailer administrations has fallen by a marginal 0.3% despite some reasonably high profile casualties including Diamonds & Pearls, Ethel Austin and Threshers.
London remains the most polarised regional market with the centre of the capital recording one of the lowest national availabilities of only 7.9% whilst the suburbs recorded the highest at 17.4%. Outer London now has the highest percentage of shop units linked to administration at 5.75%, an increase of 0.4% increase in the last three months. Many regional centres in outer London have also been affected by the opening of Westfield London and the expansion and improved retail offering of Brent Cross.
Peter Mace, head of central London retail, Cushman & Wakefield said: “The high number of tourists that continue to visit London to capitalise on the weak pound have helped to reinforce central London’s resilience. Prime high profile streets remain much in demand with Regent Street, for example, currently 100% full and only 1.7% vacancy on Old and New Bond Street. There are many international and luxury/high end brands looking for representation on these streets but they remain relatively immune to the threat of significant vacancies.”
Overall, the Midlands has seen the highest increase in availability at 1.7% to now stand at 12.1%. Birmingham still has the highest availability in the region with Nottingham the lowest at 8.7%. The region however has among the lowest UK vacancy rate because of retailer administrations, evidence that it has now seen the worst impact of the recession on its central retail area.
Rob Alston, partner Midlands & South West, Cushman & Wakefield, said: “The major city centres in the Midlands are still attracting reasonably strong demand from retailers but in some locations the vacancy rate remains stubbornly high. Landlords however are becoming more creative to get deals done offering shorter lease terms, healthy incentives and in some cases turnover only deals. With rents therefore offering relatively good value, we do expect to see vacancies falling as retailers take advantage of the opportunity to secure representation here.”
In spite of the apparent recent emergence from the recession in the UK, the availability of shop units is still high compared to the market of just a few years ago. We are now seeing a real divergence between the key retail areas and other more secondary locations, as there is a flight to quality and dominance. The future retail landscape in many towns and cities could be changed for ever if strategic action is not taken to reinvent or reposition the retail offer.