UK store vacancies shrink but are still high - report
UK retail vacancy rates improved in the final quarter of 2022 to 13.8%. But before you get too excited, it was only better by 0.1 of a percentage point on Q3 and 0.6 percentage points better than the same period last year, according to the British Retail Consortium (BRC) and the Local Data Company.
Although the report noted that vacancy rates have not recovered to pre-pandemic levels, at least retail occupancy was boosted by the return of international tourists visiting UK towns and cities and more frequent visits to offices.
“These trends have given many retailers the confidence to invest in repurposing and reopening empty units,” said BRC CEO Helen Dickinson.
All locations saw improvements in vacancy rates in Q4, and it was the fifth consecutive quarter of falling vacancy rates.
Shopping Centres improved to 18.2%, down from 18.8% in Q3; High Streets improved to 13.8% in Q4, compared to 13.9% the previous quarter; and Retail Parks improved to 9% in Q4, a 0.7 percentage point reduction from Q3, the latter continuing to be the retail location with by far the lowest vacancy rate.
Geographically, Greater London (11%), South East (11.2% and East of England (12.7% had the lowest vacancy rates. The highest rates were in the North East (18.2%), followed by Wales (16.3%) and the West Midlands (15.8%).
Lucy Stainton, Commercial Director for Local Data Company, said: “With vacancy rates being such a good barometer of the overall health of the physical retail and leisure landscape, it’s really positive to see the number of empty units at a GB level continuing to fall since they peaked mid-pandemic.
“Retail parks continue to outperform other location types which is perhaps an indication that some of those shopping habits formed during the height of Covid are sticking – with consumers favouring these drive-to locations and larger format units.
But she also noted: “That being said, shopping centres have also seen a relatively significant decline in vacancy rates with investors in some instances seeing an opportunity to convert space into alternative uses to meet the needs of the local catchment, as well as new concepts coming to market and brands returning to expansion.”
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