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Shop vacancy rate falls as landlords welcome retail tenants on shorter leases

Laura  Barnes
Shop vacancy rate falls as landlords welcome retail tenants on shorter leases

The latest quarterly vacancy rata data from BRC and Springboard has been released, revealing that shop vacancy rates have fallen in the UK.

The national town centre vacancy rate was 9.5 per cent in October 2016, down from 10.1 per cent in July 2016.

This fall came after two quarters of consecutive growth, though remains well above the January low of 8.7 per cent.

Along with the vacancy data, BRC also detailed that footfall in October was 0.4 per cent down on a year ago, high street footfall dropped for a second consecutive month, footfall in retail park locations grew, and footfall in shopping centres fell for the ninth consecutive month in October.
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“Today’s figures underline some of the challenges facing bricks and mortar retailers, as October footfall declined by 0.4% compared with the same month last year, following a 0.9% year-on-year decline in September. However, the picture is mixed across the country – while most areas saw a decline in shopper numbers, the North and Yorkshire region showed a 0.5% year-on-year increase,” said Helen Dickinson OBE, chief executive, BRC.

“Interestingly, October’s BRC-KPMG Retail Sales Monitor showed a 1.7% increase in like-for-like sales growth across the country, which perhaps suggests that shoppers may still be prepared to shell out for a bargain, but they are increasingly doing so from their laptops or mobile devices.

“This month we also publish our quarterly vacancy rate data, which shows a decline in town centre shop vacancies to 9.5% from 10.1% in July – further evidence of the volatility in the retail property market. Once again, the North and Yorkshire as well as Northern Ireland are welcoming more stores in their high streets, but the vacancy rate in Scotland has spiked to 9.2% from 7.5% in July.

She concluded: “We will watch this trend carefully, but there is some suggestion that landlords are welcoming retail tenants on shorter leases. While this could be good in the short term for retailers needing more flexible arrangements, it also bears witness to a lack of long-term stability in many areas.”

Diane Wehrle, marketing and insights director at Springboard added: “The vacancy rate always lags behind trends in footfall and sales due to the stickiness of the property market, and so the relatively stable footfall trend over the summer will have undoubtedly contributed to the improvement in the vacancy rate.  The vacancy rate also improved at the same time last year and so, to some degree, this is driven by an increase in short term lets in the run up to Christmas. 

“In order to avoid the same pattern of an increase in vacancies post-Christmas repeating itself, it is critical for retailers – and retail destinations – to deliver the best in class in terms of both price and experience.”

Tags: Retail , kpmg , brc , shop vacancy rates , footfall rates , Springboard

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