By Karen Peattie
BUSINESS group the Scottish Retail Consortium (SRC) has highlighted a near-13 per cent vacancy rate for shop premises for the second successive quarter, reiterating its call for rates support ahead of next spring when 100% rates are scheduled to be reinstated.
The organisation’s SRC-LDC Vacancy Monitor, in association with The Local Data Company, revealed that the vacancy rate for Q2 was 12.4% for high streets – the same as in Q1 – and 15.8% for shopping centres (15.6% in Q1). For retail parks it was 9.5% (9.4% in Q1).
On a regional basis, Scotland compared unfavourably with the GB vacancy rate of 12.4%. David Lonsdale, director at the SRC, said: “The upheaval wrought by coronavirus has yet to wash through these figures, which is unsurprising given most shops have been shuttered for much of the past quarter and were permitted to reopen only in the last few weeks.
“That said, even prior to the pandemic and the tumult of the past few months, one in every eight stores in Scotland lay empty – a stark reminder of the ongoing challenges facing the industry over recent times.”
Mr Lonsdale pointed out that the future of Scotland’s shops and retail destinations was reliant on the “ongoing patronage of the public” but he warned: “The extent to which retail remains the cornerstone of our high streets and can continue to employ hundreds of thousands of Scots will also depend on the decisions made by parliaments and governments.”
Acknowledging that Government support for retail during the current crisis had been “significant and rapid”, he added: “With retailers’ revenues falling short, more support is likely to be required – on rent payments which for many have been accumulating, and on business rates in order to avoid next spring’s ‘reverse cliff edge’ when 100% rates are scheduled to be reinstated.”
Lucy Stainton, head of retail and strategic partnerships at The Local Data Company, said that despite seeing an initial jump in vacancy in Q2, it was still too soon to measure the full impact of the coronavirus pandemic as nearly half of the non-essential retail units that were eligible to reopen after June 15 were still temporarily closed as of July 1.
“Over the coming months we are forecasting a spike in vacancy as the real fallout of the pandemic is felt,” said Ms Stainton. “In the first three weeks of Q3 we have already measured a 0.2 percentage point increase, so we can see this will be a sustained trend. Towns which will be hit the hardest will be those with a vacancy rate higher than the GB average pre-Covid-19 and those with a low number of ‘essential’ retailers which would not have been able retain as much footfall during lockdown.
“This being said, at the same time we are tracking an increase in the amount of retail property which is being redeveloped for other uses, such as office or residential. With the relaxation of planning permission announced by the Government, this is another trend we expect to increase long-term and will ultimately temper the increase in vacant units over time.”
Since 2018, she added, retail vacancy has risen steadily across the country, in part due to the widely-discussed oversupply of retail property given changing consumer demand.
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