Coronavirus Effects Already Pushing Vacancies Up
Helen Dickinson OBE, Chief Executive, British Retail Consortium:
“The second quarter rise in the vacancy rate across retail sites was modest, as Government support allowed many locations to survive lockdown. However, the full effects of the pandemic are yet to be seen, with Government slowly withdrawing the relief that substantially reduced costs over the last period. The viability of many stores will depend on how demand recovers going forward and there are early signs that the recent rise in vacancy rates is just the beginning. Retail Parks continued to fare better than High Streets and Shopping Centres due to their extra space, on-site parking, and broader mix of food and non-food retailers, but this was still not enough to prevent a slight increase in vacancy rate.
“With many months of rent building up, the Government must step in to support retailers, so they are not shouldered with unpayable debts. Without this, many shops will be forced to close their doors for good, causing the vacancy rate to soar across all retail locations in the near future. The shuttering of shops on our high streets would not only harm consumers, but also local communities, costing tens of thousands of jobs, and damaging other local businesses that rely on retail footfall.”
Lucy Stainton, Head of Retail and Strategic Partnerships, Local Data Company:
“Since 2018, retail vacancy has risen steadily across GB, in part due to the widely discussed oversupply of retail property given changing consumer demands. Despite seeing an initial jump in vacancy in Q2 2020, it is still too soon to measure the full impact of the pandemic as almost half of the non-essential retail units that were eligible to reopen following the 15th of June were still temporarily closed as of the 1st July.
“Over the coming months, we are forecasting a spike in vacancy as the real fallout of the pandemic is felt. In the first three weeks of Q3 we have already measured a 0.2 percentage point increase, so we can see this will be a sustained trend. Towns which will be hit the hardest will be those with a vacancy rate higher than the GB average pre-COVID-19 and those with a low number of ‘essential’ retailers which would not have been able retain as much footfall during lockdown. This being said, at the same time we are tracking an increase in the amount of retail property which is being redeveloped for other uses, such as office or residential, an example of this being the planned conversion of the House of Fraser store in Westfield into flexible office space. With the relaxation of planning permission announced by the Government, this is another trend we expect to increase long-term and will ultimately temper the increase in vacant units over time.”