Town centres "risk decimation" as store vacancies balloon
Already a blight on Britain’s retail landscape, the number of empty stores and other commercial properties increased at the fastest pace in decades at the end of last year as the Covid-19 pandemic continued to take its toll on businesses.
No surprises that the retail sector experienced its sharpest increase in vacancy levels in the three months to the end of December, according to the influential Royal Institution of Chartered Surveyors’ (RICS) quarterly survey. It recorded the fastest growth since its survey began 30 years ago.
And the outlook for retail space remains gloomy with vacancy rates set to grow as a raft of further properties, including high profile banners such as Debenhams and Topshop, become empty.
In the report, which covers almost 800 respondents around the country who specialise in trading and letting commercial properties, RICS analyst Tarrant Parsons said: "With the economy facing a further setback towards the end of the year, hampered by a renewed tightening in restrictions, it is unsurprising that conditions remain challenging across portions of the commercial real estate market.
"Both the office and retail sectors continue to see occupier and investor demand diminish, with expectations for rents and capital values remaining deeply negative for the time being.
John Thomson, a surveyor based in Cirencester, Gloucestershire, also told The Times: “The town centre risks decimation while edge of town industrial and retail shall become the new town hub”.
On the flip-side, industrial property, which has been boosted by the demand for supply chain space from online retailers, was the only sector to record positive results. Surveyors also expect rents on prime and secondary industrial property to increase in the next 12 months as availability falls.
"The industrial sector seems to go from strength to strength”, noted Parsons. “Supported by more favourable structural dynamics, demand for industrial/logistics space accelerated noticeably over the latest survey period.
"As a result, already positive rental growth projections across the sector were revised higher in the fourth quarter results", he added.
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