Retail floorspace holding up well overall as secondary shops suffer
Colliers International, which has been tracking the level of retail voids in a sample of 15 towns across the UK for four years, says the broader picture is not as negative as might be suggested by headline figures.
The proportion of vacant retail floorspace in Colliers’ sample centres fell to 10.0% in October 2010 from 11.4% six months earlier. This is the first decline in four years, and the October reading is the lowest since October 2008 (7.9%). The firm notes that vacancy rates are lower, and are falling faster, when measured in terms of floorspace than unit numbers, because voids are on average 27% smaller than the typical shop. Colliers says that this indicates that larger shops are proving easier to let, as they conform better to the occupational requirements of many retailers – particularly multiples.
There has been a relatively large fall in voids in primary shopping areas, the firm says, but many units in secondary centres are proving hard to let. “Secondary shops now account for three-quarters of all void units across our sample of towns,” it notes.
Looking at the longer-term picture Colliers notes that while the recession has clearly led to a big increase in voids, new retail development has meant that the overall quantum of trading floorspace has held up much better. The overall amount of vacant floorspace has risen by 750,000 sq ft, or two-thirds, in the four years that it has been carrying out this survey, but during the same period, total retail floorspace has increased by 1,409,000 sq ft or 8% (adding in new development and subtracting demolitions). “Thus, the quantum of occupied/trading retail floorspace in our centres actually increased by 659,000 sq ft (or 4%) through the recession,” it points out.
In terms of units, the 15 locations monitored by Colliers now contain 3% more shop premises than four years ago, but unit vacancy has almost doubled since October 2006, so the number of shops now trading has fallen by 5%. “The apparent anomaly between the increase in trading floorspace and the fall in the number of shops trading is accounted for by the fact that the average size of void units has fallen by 13%, whilst shops that are trading have, on average, got larger by 9%.”
