Colliers International has undertaken unique research to forecast the likely retail demand in 2020 and 2025 to try and answer the question, Is the High Street dead?
John Webber, Head of Rating at Colliers International calls for action from Central Government to resuscitate the High Street and save it from untimely death: “The single biggest threat to the High Street is Central Government’s decision to delay the rates revaluation, leaving a massive burden on those High Streets where the decline has been the greatest. The Government should use the £7 billion in business rates currently paid by retailers to set a benchmark.
“We call on Central Government to take control of the general amount of retail development and introduce sufficiently flexible change of use laws.”
Colliers’ Midsummer Report offers this 10-step solution to the Britain’s beleaguered High Street:
- 2015 rating revaluation should be reinstated and implemented now
- Introduce rates relief in town centres where vacancy rate is above 12% (the average)
- Adopt a more flexible planning policy allowing changes of use to encourage occupation
- Reduce or be more flexible with car parking charges eg free parking once a week/month
- Employ Town Centre Managers to promote town centres and bring together stake holders
- Move council and county council offices back into town centres
- Devise a five year Business Plan to re-invigorate the town centre and help renew town centres as a destination by reintroducing reasons to go there – community services, vibrant shops, mix of cultural and leisure uses and events
- Use CPO powers to demolish tertiary shops and amalgamate small units into larger ones which are more attractive to the multiple retailers
- Use CPO powers to acquire units and let on a flexible basis to individual retailers (pump prime), artists, food retailers, university students, to create vibrancy
- Use CPO powers to create more residential accommodation in town centres, be it vacant upper parts or larger sites
Mark Charlton, Head of Research and Forecasting at Colliers International adds: “Rents are not the issue or the reason for the decline in our High Streets. Landlords have been very protective in trying to keep their properties occupied. The continuous general decline in rental levels in recent years is witness to that.
“Falling real disposable income, excessive competition and a structural shift in consumer shopping patterns are the main causes of the failing High Street. And the Government must take some blame through the postponement of the Business Rates revaluation which would have helped to reduce total occupational costs in many struggling towns. .”
According to Midsummer Retail Report prime net effective retail rents have fallen for the fifth straight year and overall rents fell by 0.9% across Great Britain, the same fall as in 2012. Rents across GB in real terms are now 22% below 1987 levels and 26% below those in 2008.
Retail rents fell by 3.6% over the last 12 months if you exclude London. This divergence between London’s strength and the remainder of the country’s weakness has widened over the last 4 years. The only region not to suffer falling rents over the last 12 months was London where both central and outer London saw increases of 3.5% and 3.3% respectively. All other regions of Great Britain saw declines in rents with the north west of England seeing the greatest decline of over 5.5%.