DERELICT high streets and empty commercial and retail property could provide space for thousands of homes across Scotland.

Analysis reveals the vacancy rate for retail in the first half of 2020 in Scotland has risen during the Covid pandemic to 12.7%.

Now the Centre for Policy Studies is arguing that the challenges of the pandemic could be turned into an opportunity to revive high streets, communities and commercial centres.

They say government must remove incentives to keep commercial buildings vacant and encourage recycling of space, as well as reforming business rates.

The think tank says that local plans should work to ensure vacant space is replaced by new housing and mixed-use regeneration.

It says that space could provide new homes and unleash tens of billions in private finance to ‘build back better’.

The think tank said that even before Covid, 25-40% of retail space was no longer viable or needed.

Retail vacancies are believed to have been less markedly hit than vacancies in commercial property.

The think tank says that office spaces is expected to face a period of "acute pressure" as working from home becomes more common post-pandemic.

HeraldScotland: A Jaeger shop with closing down sale signs

Office take-up in Edinburgh alone reached some 534,000 square feet last year, down by about 16 per cent on the previous year’s total.

But they have said that local authorities have been ‘resistant’ to measures that could see empty retail spaces repurposed for housing.

The think tank says the move will help to ‘build back better’, in the UK Government’s phrase, and revive high streets, communities and commercial centres across Britain.

"If we get this right, the next few years will see a hum of activity and development and a wave of private sector investment, avoiding a rash of silent dereliction," it says. We face a future where commercial centres need to be reshaped as retail and office demand changes."

High streets and unused commercial space have previously be reinvented and reused – as has occurred in many shopping malls in the US or former industrial/warehouse areas such as central Manchester.

But it is argued that commercial space can become homes.

Before the pandemic 40% of retail space was estimated to be needing to be repurposed, this alone would create at least half a million homes across the UK, using figures for the average sized property and flat built in this country.

"This doesn’t take into account changes around offices, new higher density mixed use regeneration, or post-Covid falls in retail demand," the think tank said.

"Reshaping spaces and allowing for regeneration of areas also allows for mixed use regeneration, which can help increase new residential space even further by densification and creating opportunities where previously none existed.

HeraldScotland:

"This could be a major part of levelling up if got right – or it could mean increased vacancies and semi-derelict commercial centres if we get it wrong. The risk and opportunity is huge."

Across Britain, if retail space were repurposed, it could create at least 500,000 homes, or more if the space were converted into flats.

One survey found that seven in ten people say they would judge a town by its high street, and find that it is an important part of their community.

Pre-pandemic, nearly 60% of people visited their local high street more than once a week and only 10% did not visit their high street once a month or more often.

The report says that councils are to blame for continuing high retail vacancy rates in many areas.

But it also means that they will have a key role post-Covid in ensuring that their areas recovers from the impact of Covid.

They say that they envisage that councils move "swiftly and collaboratively" to encourage the reshaping of commercial space.

But they said that councils that fail to prepare a realistic commercial assessment should have one put in place for them by government.

Report author and CPS head of policy Alex Morton, said: "There is a real opportunity to boost the levels of homes and encourage mixed use regeneration as part of the current planning reforms. Councils need to take a lead and work with partners to see how their local commercial centres will look and create plans that can help Britain build back better."

Commercial property investment was expected to rebound this year after the amount of money being pumped into offices and shops in Scotland fell sharply in 2020.

Investment volumes totalled £1.3 billion last year, down from £2.1bn in 2019 and the weakest annual figure since 2012, according to analysis from property consultancy Colliers International.

Mark Allan, chief executive of the commercial property giant Landsec, which has the Buchanan Galleries in Glasgow in its portfolio said: "Local authorities face a difficult job balancing the needs of local businesses and their communities. There is, however, a golden opportunity to rethink traditional commercial centres. By creating more sustainable mixed use, living-led neighbourhoods, we can build long-term economic success while also delivering quality of life locally.

"We are determined to work with our local authority partners to realise this opportunity and in doing so bring our purpose to life - sustainable places, connecting communities, realising potential."

A COSLA spokesman said: “Town centre regeneration is a key area of focus for local authorities with the pandemic shining a light on the need for good placemaking. Local government will continue to work closely with key partners and communities to deliver localised approaches to regeneration, and in doing so stimulate the recovery, support inclusive growth, the provision of housing, as well as addressing deprivation.” Luke Hall, m inister of state for regional growth and local government, said: "The role of the high street has always evolved and this year it’s even more important that we work together to support change and make sure that they are the beating heart of their local community. This can be achieved with high quality housing and leisure in addition to shops and restaurants, all of which is set out in the High Streets Strategy which was published last week.

"This report shows how councils can repurpose retail space to help their town centres become more attractive places to live, work and visit."