Britain’s shop vacancy dropped to 12.4% in April, the lowest since December 2009. This is down -0.6% from the same time last year (April 2015). This change was driven by a decrease in the number of units becoming vacant (down 16% from April 2015) along with an above average number of units being removed from the overall stock (+76%, when compared to April 2015).
What does this tell us?
This drop in the national vacancy rate to a level that was last seen in 2009 is significant. Of the shops we have, more are occupied than ever before and remaining occupied for longer, but the LDC data shows the removal of units from the overall stock which is reflected by the decline in long term vacant units. This is also good news, as it hopefully shows that landlords and local authorities are recognising that a unit that hasn’t been occupied for more than three years is very unlikely to ever be reoccupied and therefore should be demolished or given an alternative use. With nearly 12,000 shops in this category there is still a long way to go and the impact on those areas blighted with such terminal vacancy would be significant. If in doubt then take a visit to Skelmersdale, Walkden, Milford Haven, West Bromwich or Hartlepool to see for yourself.
Recent results from retailers and profit warnings or downgrades from retailers show that this positive news might not be long lived, but up to this date the story for many retailers and food and beverage operators is one of expansion. However we don’t know for how long and it’s not happening everywhere. 2016 could see further dramatic news such as we have seen with the administrations of BHS and Austin Reed
The GB shopping centre vacancy rate (13.2%) dropped by -1.4% in April 2016, when compared to the same period last year (April 2015). The North East (-2.8%) and Scotland (-2.3%) saw the biggest fall in their vacancy rates across the GB nations and regions, a similar pattern to March. Wales was the only area to see a rise in its vacancy rate of +2.0% in the last 12 months since April 2015. The South West saw no change in the last 12 months (14.8%), although this was a similar pattern across retail parks and town centres as well.
Retail park vacancy rates across all of the GB nations and English regions varied in performance. The North East and West Midlands saw a significant improvement, with a -3.3% and -3.5% decrease in vacancy respectively in the 12-month period (April 2015 to April 2016). The Midlands is seeing the biggest improvement in vacancy rates, with the East Midlands also seeing a drop of -2.1% in the last 12 months. Further north, Scotland was the only region to see an increase, with the vacancy rate rising from 7.6% in April 2015 to 8% in April 2016.
The town centre vacancy rate dropped by -0.2% to 10.7% for the first time in three months. Compared to 12 months ago, the vacancy rate decreased by -0.5% from 11.2% in April 2015. Scotland was the only region/nation to see an increase in its vacancy rate of +0.8% in the last 12 months (since April 2015). This the second consecutive month that Scotland has been the only region to see an increase, with the increase also up from +0.5% in March to the +0.8% in April.
Persistent vacancy calculates the number of units vacant for longer than three years. A unit that has remained empty for over three years is unlikely to be reoccupied.
Persistent vacancy decreased in April, when compared to March 2016, with the number of units vacant for over three years across GB town centres falling to 11,839 units. This is down -2.8% from the start of the year (12,174 units).
The North of England continues to have the highest percentage of total units vacant for over three years, but this is reducing as vacancy rates drop. In the North East 7.4% of the total units have been vacant for over three years, while in the North West 6.8% of the units have been vacant for over three years, compared to the GB average of 4.4%.
So good news from the numbers but current consumer sentiment, footfall data and retailer concerns mean it could be short lived. The fact that we see these changes on an ongoing basis is good news as it reflects action, in most cases, across our towns, shopping centres and retail parks. The level of action is often related to the type of ownership but that is another big topic that deserves its own blog!