Town centre vacancy rates in Great Britain stabilized at 14.5% during the first half of 2011, but a regional analysis reinforces the North South divide. The Local Data Company’s latest Shop Vacancy report, which reviews the figures from over 1,000 retail centres, shows that while the threefold increase in vacancy rates since 2007 has ceased, in extreme cases one in three shops stands vacant, while other centres remain at pre-recession levels.
LDC said that the situation is unlikely to improve significantly in the short to medium term due to the current economic climate, the rise of alternative sales channels and the sheer number of shops that exist across Britain.
All of the southern regions have an average vacancy at 11% or below, while the Midlands and North range from just under 13% in the East Midlands to 16% in the North West. The top ten worst-performing large centres are in the West Midlands and the North while seven out of the top ten best centres are in the South.
Matthew Hopkinson, director at the Local Data Company, said the report shows how fragile the British High Street is in parts of the country. “The pressures it faces are increasing and therefore one needs to be realistic in one’s approach to each and every one of these towns if they are all to have a future,” he commented.
“The stark reality is that Great Britain has too many shops in the wrong locations and of the wrong size. The diversity of shop vacancy rates is clear evidence that a local approach is required that ties in with consumer needs and the realities of modern retailing. The market still has significant corrections ahead and the impact of these will vary significantly according to location.”
Amongst the medium-sized centres the situation is the same as in large centres, with eight out of the ten worst-performing located in the North and the top ten centres residing in London and the South. The only exceptions are Dartford with a vacancy rate of 26.3% and Newport in South Wales with 26%. The best performing medium-sized centres run from Sevenoaks with a vacancy rate below 5% to Falmouth at 6.6%.
In smaller centres, the best performers are again mainly in London and the South East. At first glance the top ten worst performing small centres looks different, with Margate (36% vacancy) and Wandsworth (31%) at the top of the table. However, further down the list the picture becomes more familiar with the likes of Runcorn, Corby and Bootle all seeing poor vacancy rates.
LDC said there is increasing evidence that “retailer pain” is not spread evenly between the High Street and the Shopping Centre. The latest results from several of the big, retail-owning property companies show their revenues have been surviving any tenant difficulties with ease. Solid rental growth, footfall and occupancy levels demonstrate that prime properties are taking market share away from other locations.
“Retailers are looking to close older and poorer performing outlets where possible, and relocate into new stores in the bigger and better centres, streets and warehouses to bolster diminishing profits,” said LDC. “The more they come under pressure, the greater will be the need to rationalise portfolios of stores into the best-performing locations, which should continue to benefit the larger companies with prime portfolios at the expense of high streets and secondary centres elsewhere.”
Liz Peace, Chief Executive of the British Property Federation, said the recovery of Britain’s high streets and town centres is “not just going to happen,” but will need nursing. “It will require investment from our sector, and the confidence that goes with a local authority that has leadership, a clear vision, and a willingness to plan and manage their retail environment.
“We must also accept that some secondary retail units are no longer viable and plan their transition to other uses. Simply hurting successful retailing to level the playing field is not the solution. We must find new ways to get people on to our high streets and in our local shops.”
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