Number of empty shops set to fall to 2006 levels: new report
A new report has predicted that the number of empty shops will have fallen from its current level of 12% of total floor space to around 7% by 2020 which is similar to the peak levels seen in 2006.
In its soon to be published midsummer retail report, global property firm Colliers International also forecasts that the net addition to town centre retail accommodation in the years leading up to 2025 will be minimal with very few new shopping centres. As a result, the company predicts that a combination of limited new supply and continued growth in retail expenditure will lead to reduced vacancy rates and pressure for new town centre development.
Russell Francis, a director at Colliers International said: “This recovery will be selective with the major town centres seeing the greatest reduction in empty shops and the medium centres seeing the least.
“The recovery will largely be driven by a significant increase in the GB population and modest economic and expenditure growth.
“Another factor will be internet sales, which are currently about 13% of all non-food expenditure and likely to rise to about 20% by 2020. After this, the rate of growth levels off and, therefore, online sales will no longer be as much as a threat to high street as successful retailers will have by then aligned their internet and their property strategies.”
Colliers forecasts that a new wave of retail development will start in around four to five years time with the main concentration in major regional centres.
The company expects the biggest beneficiary of population and economic growth to be London where the population is forecast to grow by 20%. This will fuel demand for new shopping centre development, with the only schemes currently being discussed of any significance being Elephant and Castle and Croydon, the company said. The north east of England, however, is predicted to see only a 5% increase in population and might therefore see little new development
Mark Charlton, Colliers International head of research and forecasting explained: “We forecast that the long delayed recovery in the retail market will start in 2014 but be focused on the big centres and smaller conveniences locations because the internet is forcing retailers to concentrate on larger “showroom” stores in fewer locations.
“The day of new retailers entering into the UK and rolling 300 new outlets is over. The new model is to open 20-50 units in the major retail centres and to have a strong internet presence that runs symbiotically, providing the consumer with both traditional and online shopping options.”
Adam Pyrke, head of Colliers International London planning team added: “Retailers are focusing on providing an experience in their new larger stores and increasing dwell times by harnessing technology and leisure, food and beverage trends to provide an all-encompassing experience. High Streets must do the same and planning authorities have to be more flexible to create a more varied mix of uses.”
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