Retail storm clouds gathering – LDC
Recent optimism triggered by positive data on retail sales does not bear out at ground level, says the Local Data Company in its recently published mid-year report on shop vacancies. There is already a north/south divide in vacancy levels for retail properties, it says, and the coming cuts in public spending will have a particular impact on retail in those centres where the public sector accounts for a higher proportion of the economy.
The LDC’s mid-year report says early 2011 looks “a pretty dismal prospect” given the Bank of England’s forecast of a choppy recovery and the VAT rise to 20% in January. Already, it says, there is a division between the big retail centres in London and the South East, which are holding up pretty well, and those further north, where vacancy rates are much higher. While this survey shows that the increase in vacancy rates has slowed during H1 2010, the LDC warns that this could just be a temporary respite for those economies “anchored by the public sector”.
The analysis shows that, with the exception of Scotland, the average of the large retail centres in the northern and midland regions lies well above the national average vacancy rate of 12%, while the southern regions all fall well below it.
Among large cities, the highest vacancy rates were recorded in Blackpool (28.93%), Bradford (24.64%) and Wolverhampton (23.78%) while among the medium-sized centres the divide is less clear, with Altrincham (30.04%), Margate (27.55%) and Dewsbury (27.44%) reporting the highest vacancy rates. While overall there are more retail centres reporting a worsening state than those indicating better conditions, the survey does show some consistently improving larger retail centres, including Bath, Guildford, Central London, Cardiff and Liverpool, the LDC says – but it cautions that it’s too early to say that these are coming out of recession.
