Secondary retail struggling as ‘retail obsolescence’ gathers pace
“Overall, the number of high-profile casualties both before and after Christmas has not been a surprise. It is now time for landlords to pick up the pieces and examine the prospects for newly vacant units,” said DTZ in its recent comments on the market for retail property for sale and to let across the UK. The latest data from the Local Data Company will not have done much to cheer retail landlords – town centre vacancy levels for retail properties stabilised at 14.3% during H2 2011, LDC reports, with wide differences in rates from zero to 36% across the country.
“Retail obsolescence is gathering pace as prime pitches shrink and location becomes an increasingly important factor for both consumers and retailers,” DTZ noted. The firm said many landlords and retailers are hoping to “tread water” over the next few months, hoping for “at least an anaemic recovery” to begin sooner rather than later. The LDC says prime centre ‘core’ areas across the UK have remained healthy, but secondary centres and outlying areas have been struggling as multiple retailers exit for larger centres, out-of-town locations or as a result of business failure.
Among the top ten worst performing retail centres, LDC notes that more than 30% of retail property in Stockport is vacant, with Nottingham, Grimsby, Stockton, Wolverhampton, Blackburn, Walsall and Blackpool all recording vacancy rates of more than 25%. Most of the best-performing centres, by contrast, are mainly in the South and West. Retail premises in Exeter, Kingston, Camden, Cambridge, Taunton and Salisbury have vacancy rates of below 10%, while York and Harrogate also reported less than 10% vacancy. Retail property in St Albans was the best performer, with a 8.2% vacancy rate.
The British Property Federation also notes in its comments on the LDC report that the British Council for Shopping Centres estimates that a fifth of UK shopping centres are in financial difficulties, with about 20 secondary shopping malls for sale already. Liz Peace, BPF chief executive, said that landlords, retailers and local authorities need to work together “to adapt to changes in the way we shop” and again called for conversion of empty shops into residential use as one way to tackle declining town centres.
