The amount of empty shops on Britain’s high streets climbed again during the early part of the year, with fewer and fewer businesses looking to open new premises, according to the latest RICS UK commercial market survey.
During the first three months of the year, 21% more chartered surveyors claimed the amount of unoccupied shops across the UK had gone up, rather than down. Unsurprisingly, this was met with a fall in the amount of retailers looking to lease new premises, as a net balance of 13% more respondents reported drops in demand.
With the high street still suffering – and no apparent respite in sight – expectations for future rents continued to slip, and a growing number of surveyors believe retail premises to be losing value (net balance -17%).
Across the country, every part of the UK saw the amount of unoccupied retail space rise, with London recording the most noteworthy increase in the first three months of the year, followed by the Midlands. Meanwhile, the subdued trend in demand is visible in most regions, suggesting little prospect of an early turnaround.
Meanwhile, other areas of the commercial property market – such as office and industrial space – saw demand for premises strengthen slightly, with no major increases in empty floorspace. This is reflected in the suggestion in the survey that rents in these parts of the market should, at worst, be little changed going forward and could even begin to edge upwards.
Simon Rubinsohn, RICS' chief economist, comments: “The high street has been struggling for some time now and the pressure doesn’t look like easing up on retailers and landlords any time soon. The generally gloomy economic picture means that pricing remains intensely competitive. And though fears of a triple dip recession have now dissipated, the flat trend in wage growth will continue to act as a drag on the high street.
“Significantly, other areas of the commercial property sector are beginning to look a little healthier, with tenant demand for office space and industrial units edging upwards. However, it remains to be seen whether this improvement can be sustained in the absence of a more meaningful pick-up in economic activity.”
