In the third quarter of 2021, the overall shop vacancy rate remained at 14.5 per cent, the same level as the previous quarter. It was 1.3 percentage points higher than in the corresponding period in 2020.
While they still remain at a record high, this is the first time in over three years vacancy rates have not risen.
According to the BRC-LDC Vacancy Monitor, no retail locations saw an increase in vacancies in Q3, with shopping centre vacancies remaining at 19.4 per cent for the second consecutive quarter. On the high street, vacancies remained at 14.5 per cent in Q3 – remaining in line with the overall rate.
Retail Park vacancies decreased slightly to 11.3 per cent, down from 11.5 per cent in Q2. Also, it remains the location with by far the lowest rate.
“Retail parks remain resilient as the only location type that saw vacancies fall this quarter. This is because many brands who have traditionally occupied shopping centres and high streets are opening stores in out-of-town locations to meet customer demand, and retail parks have become increasingly vital for supporting the expanding online services of some businesses,” Helen Dickinson, chief executive of the British Retail Consortium, said.
“Meanwhile, 10 per cent of high street shops and more than 13 per cent of retail units in shopping centres have remained empty for over a year, which is the result of the high costs of opening and running shops in many parts of the country.”
Lucy Stainton, director of Local Data Company, commented: “With vacancy rates being one of the most robust indicators of the health of the physical retail market, it was interesting to see that this quarter the steady increase in empty shops, both pre and especially during the pandemic, have started to stabilise.”
Stainton added that many regions are actually seeing a decrease in vacancy as the independents sector in particular returns to growth.
“These independent operators are taking advantage of properties being more attainable with better rental deals being offered. Interestingly, Greater London remained flat and whilst it’s certainly a positive sign that vacancy rates are no longer on an upward trajectory, equally with many people still opting to work from home, London in particular hasn’t seen a surge in new openings just yet as footfall continues to be impacted by hybrid working.”
She however said a difficult period of restructuring and redevelopment still lies ahead as the challenges being faced by larger multiple retail and leisure brands remain at large.
“A flattening off of vacancy rates does not mean that contributing activity levels are slowing by any means,” she noted.
“We are still seeing an incredible volume of businesses opening and closing, beneath these top-line stats, and this makes devising and implementing investment strategies whether you’re a landlord or a retailer, set against constantly shifting sands and supply side challenges, very challenging still.”
