UK high streets “critical, but stable” – new LDC vacancies report
Retail vacancy rates remained stable at 14.5% on average in town centres across the UK during the first half of this year, but the gap between the best and worst performing retail centres in the UK has widened, says the Local Data Company in its latest report.
The British Property Federation’s chief executive Liz Peace said many UK high streets and town centres were in a “critical, but stable” condition. She noted that recovery would require investment and local authorities with 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,” she added. “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.”
The LDC said: “Whilst the good news is that the three-fold increase in vacancy rates since 2007 has stopped, the fact remains that in the extreme centres one in three shops stands vacant, yet others remain at pre-recession levels”. The firm does not expect vacancy rates to improve significantly in the short and medium term given the current economic climate, the rise of alternative sales channels and the sheer number of shops in the UK.
The survey shows that the regional divide continued during H1 2011, with the North West and North East showing the highest vacancy levels and the South East and London having the lowest rates. In general, the southern regions had an average vacancy rate of 11% or below, compared with 16% in the North West and just below 13% in the East Midlands.
Among the largest retail centres, the ten worst performers are all in the West Midlands and the North, while seven of the ten best are in the South. The best performing large centres are Bromley, with a vacancy rate of 9.0%, Camden Town (9.2%), Harrogate (9.3%), St Albans (9.6%) and York and Kingston-upon-Thames, each with 9.9%. The worst performers are Stockport (27.7%), Blackpool and Grimsby (each 27.5%), Stockton-on-Tees (27.4%) and Bradford (26.8%).
For mid-sized centres the story is similar, with eight of the ten worst performing centres in the North and all ten of the best performers in the South and London. The only exceptions are Dartford with a vacancy rate of 26.3% and Newport in South Wales with 26%. The worst performers among medium-sized centres are Dudley (vacancy rate 29.4%), West Bromwich (28.3%), Hartlepool (27.9%), Dewsbury (27.6%) and Blackburn and Dartford (each 26.3%). The lowest vacancy rates are in Banstead (4.8%), East Ham (4.9%), Southall (5.6%), Wood Green (6.2%) and Holloway Road (6.4%).
The LDC notes that retailers are seeking to close older, poorer-performing outlets and move into larger and better centres, streets and warehouses. The LDC thinks that this trend to rationalise portfolios into the best-performing locations will continue to benefit larger companies with prime portfolios, at the expense of high streets and secondary centres elsewhere.
