Vacancies fall for third quarter in a row, according to British Retail Consortium
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Vacancies Fall for Third Quarter in a Row In the second quarter of
2022, the overall GB vacancy rate decreased to 14.0%, which was 0.1
percentage points better than Q1 and 0.5 percentage points better
than the same period last year. This was the third consecutive
quarter of falling vacancy rates. All locations saw
improvements in vacancy rates in Q2: Shopping Centre
vacancies fell to 18.9%, down from 19.0% in Q1 2022.
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Vacancies Fall for Third Quarter in a Row
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “Vacancy rates continued to travel in the right direction, with the third consecutive quarter of improvement, though rates remain almost two percentage points above pre-pandemic levels. There remains a significant North-South divide, with the North of England, along with Scotland and Wales, having a higher proportion of empty shops, though this gap is narrowing, with greater improvement being seen in Northern England. Shopping centres continue to lag behind high streets and retail parks; a situation exacerbated by the bigger challenges associated with redeveloping shopping centre units. This has led to a rise to over nine percent in empty shopping centre units which has been closed for two or more years. “Vacancy rates tend to lag behind other metrics in responding to economic changes, meaning that the vacancy rate is likely to improve further – slowly returning towards pre-pandemic levels. However, Government policy also has a big impact on the viability of shops. A 2021 BRC survey showed that unless the burden of business rates is brought down, more than 80% of retailers said they were ‘likely’ or ‘certain’ to have to close shops. The recent consultation on the design of the Transitional Relief scheme – a flawed system within business rates that could cost retailers over £1 billion in three years – is an opportunity for the next Prime Minister to make meaningful change for retail locations and the local communities they support.” Lucy Stainton, Commercial Director, Local Data Company, said: “Vacancy rates have continued to decrease for the 3rd quarter in a row, pointing to a more sustained recovery post covid which is certainly encouraging. Operators, both chains and independents, have been acquiring space especially on high streets and in shopping centres which again is encouraging given these location types were particularly impacted by the pandemic. “That being said, there are a number of economic headwinds facing retailers and consumers alike, including the cost of living increases as well as issues across supply chains. This may mean we see a slow down in new store acquisitions as operators consider what this might mean for their investment strategy. In parallel to this however, we will continue to see increased redevelopment activity across the market, with redundant retail space being reviewed for other uses. The net impact of both of these phenomenon’s will be the deciding factor in terms of what happens to vacancy rates across GB moving forwards.”
Slender but welcome improvement in Scotland’s shop vacancies
David Lonsdale, Director, Scottish Retail Consortium, said: “The shop vacancy rate in Scotland saw a slender but nonetheless welcome improvement in the second quarter of this year. This was the first full trading period for over two years in which stores were able to remove all remaining Covid era restrictions. Encouragingly, this was the third successive quarterly improvement in the vacancy rate with destinations such as high streets and retail parks seeing the number of empty units nudge down. By contrast, vacancies in shopping centres edged up a smidgeon further. “Scotland’s vacancy rate remains above that for Great Britain as a whole and well above pre-pandemic levels. Indeed, Scotland’s was the third weakest performance of eleven areas of the GB. Flagging foot-traffic and continued hybrid working is undoubtedly making it trickier for vacancy rates to fully recover. “A cocktail of cost pressures emanating from the supply chain, commodity prices, and taxation are serving to make life difficult for retailers. All this comes as many in the industry strive to pay down Covid era loans and tax deferrals whilst trading conditions are far from straightforward. The prospect mooted in the Scottish Spending Review of a further increase in the business rate, already at a 23-year high, is ominous for retail and other sectors with a significant property footprint. A further rates hike next Spring would come immediately following revaluation, when it normally drops, and would be difficult for stores to absorb. A shift in mindset is needed on business rates, with a switch from trying to squeeze tax revenues from commercial properties to one which encourages investment into retail destinations.” Lucy Stainton, Commercial Director, Local Data Company, said: “Vacancy rates have continued to decrease for the 3rd quarter in a row, pointing to a more sustained recovery post covid which is certainly encouraging. Operators, both chains and independents, have been acquiring space especially on high streets and in shopping centres which again is encouraging given these location types were particularly impacted by the pandemic. “That being said, there are a number of economic headwinds facing retailers and consumers alike, including the cost of living increases as well as issues across supply chains. This may mean we see a slow down in new store acquisitions as operators consider what this might mean for their investment strategy. In parallel to this however, we will continue to see increased redevelopment activity across the market, with redundant retail space being reviewed for other uses. The net impact of both of these phenomenon’s will be the deciding factor in terms of what happens to vacancy rates across GB moving forwards.” Vacancy Rates in Scotland
Vacancy Rates in Scotland by Location Type
MORE SHOPS ON OUR HIGH STREETS, AS STEADY WELSH RECOVERY CONTINUES
Sara Jones, Welsh Retail Consortium, said: “The shop vacancy rate in Wales improved in the last quarter, with our high streets seeing the largest improvement out of the GB nations and region. Encouragingly, this was the third successive quarterly improvement in the vacancy rate with destinations such as high streets and retail parks seeing the number of empty units nudge down. By contrast, vacancies in shopping centres in Wales saw yet another deterioration. This is a concern, particularly as these destinations rely on office workers and the trend towards hybrid working will undoubtedly continue to impact. “Whilst these overall figures are encouraging, we need to exercise caution given that Wales continues to have far more empty premises than anywhere else in the UK, bar the North East. Whilst the improving trend towards revitalised high streets will undoubtedly instil confidence, we must not lose sight of the need for concerted and targeted action to maintain the current trajectory. “The Welsh Government is currently developing its Retail Vision action plan, and these actions must be tangible, provide a clear boost to consumer confidence and tackle the massive cost pressures facing retailers such as the gargantuan business rates burden. With a cocktail of cost pressures emanating from the supply chain, commodity prices, and taxation we must act now to help our retail destinations continue the road to recovery.” Lucy Stainton, Commercial Director, Local Data Company, said: “Vacancy rates have continued to decrease for the 3rd quarter in a row, pointing to a more sustained recovery post covid which is certainly encouraging. Operators, both chains and independents, have been acquiring space especially on high streets and in shopping centres which again is encouraging given these location types were particularly impacted by the pandemic. “That being said, there are a number of economic headwinds facing retailers and consumers alike, including the cost of living increases as well as issues across supply chains. This may mean we see a slow down in new store acquisitions as operators consider what this might mean for their investment strategy. In parallel to this however, we will continue to see increased redevelopment activity across the market, with redundant retail space being reviewed for other uses. The net impact of both of these phenomenon’s will be the deciding factor in terms of what happens to vacancy rates across GB moving forwards.” Vacancy Rates in Wales
Vacancy Rates in Wales by Location Type
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