Property News Retail vacancy falls for second consecutive half-year says Colliers International

National Retail Barometer

Colliers International’s sixth national retail barometer research report, which uses void rates as a key indicator, reveals a fall in the proportion of vacant retail units and floorspace during the six months to April 2011. At April 2011, 13.3% of units across the sample of 15 UK towns and cities were empty, down from 13.7% at October 2010. In terms of floorspace, retail vacancy also fell - from 10.0% last October to 9.7% in April this year; however, it remains almost five times higher than the Central London vacancy rate.

The polarisation between prime and secondary continues. UK vacancy rates in primary shopping areas have been falling since April 2009 and now stand at 8.0% of units - a 25% improvement in just two years. In contrast, vacancy rates for units on secondary frontages, although falling marginally to 17.0% at April 2011, remain higher than two years ago and more than double the rate for prime.

The vacancy rate for secondary floorspace, however, is now almost three times that for prime. Prime vacant floorspace fell marginally to 5.1% at April 2011 and, whilst void floorspace in secondary areas also declined, at 15.0% it remains significantly higher than prime.

As reported previously, vacancy is lower and falling faster when measured in terms of floorspace than unit numbers, because void units are, on average, 27% smaller than the average shop. This finding demonstrates that larger retail units are easier to let, since they are more likely to conform to the occupational requirements of many retailers, particularly multiples.

Dr Richard Doidge, Director of Research Consultancy at Colliers International commented:
“The end of the recession in Q4 2009 failed to lead to a period of sustained economic recovery. With the growth in GDP in Q1 2011 merely cancelling out the fall seen in Q4 2010, there has, in practice, been no expansion of the UK economy since the middle of last year. What’s more, the Coalition Government’s medicine for dealing with the huge national fiscal deficit (VAT, National Insurance and other tax hikes and substantial and early cuts in public spending), coupled with high inflation and limited wage growth, is now having a troublesome side effect - it is squeezing household disposable incomes.”