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+43% increase in the number of vacant units being demolished in June 2016 compared to the same time last year (June 2015)

15 July 2016 by Local Data Company

The picture across Great Britain

Britain’s shop vacancy remained at 12.3% in June, the lowest since November 2009. This is down -0.5% from the same time last year (June 2015). This change was driven by an increase in the number of new units (up +13% from June 2015) and an increase in the number of vacant units demolished (+43%, when compared to June 2015).

Fig_1_GB_Shop_vacancy_rate_20082016_Source_LDC.png Fig 1. GB Shop vacancy rate 2008-2016 (Source: LDC)

Fig_2_Vacancy_rates_by_property_type_in_April_2016_Source_LDC_1.png

Fig 2. Vacancy rates by property type in June 2016 (Source: LDC)

Analysis of vacancy rates by occupation type compared to the previous month shows that Shop vacancy in June was 12.3% (0.0% change), Leisure vacancy was 8.1% (+0.1% change), and All (Retail & Leisure) vacancy rate was 11.2%( +0.1% change).

 

All vacancy rate by location type (retail and leisure)

The GB shopping centre vacancy rate (13.2%) dropped by -1.6% in June 2016, when compared to the same period last year (June 2015). GB shopping centres saw the biggest drop across all the location types. The West Midlands (-2.2%) and North East (-3.8%) saw the biggest fall in their vacancy rates across the GB nations and regions. Wales was the only area to see a rise in its vacancy rate of +0.4% in the last 12 months since June 2015. This is a recurring trend from the last four monthly vacancy reports.

Retail park vacancy rates dropped by -0.9% across GB retail parks in June 2016. A drop from the -1.2% change in the retail park vacancy rate was reported in May 2016. The West Midlands, North West and Wales saw the biggest improvements, with a -1.9%, -1.8% and -1.7% decrease in vacancy respectively in the 12 month period (June 2015 to June 2016). Welsh retail parks performed better than Welsh shopping centres. This shows that occupiers’ demand for retail park space is greater than the demand for shopping centre units.

The town centre vacancy rate remained at 10.7% in June, unchanged from May. Compared to 12 months ago, the vacancy rate dropped by -0.5% from 11.2% in June 2015. Scotland was the only region/nation to see an increase in its vacancy rate of +0.8% in the last 12 months (since May 2015). This is the fourth consecutive month that Scotland has been the only region to see an increase, which is a concern for stakeholders in the nation.

Fig_3Vacancy_rates_by_location_type_in_April_2016_Source_LDC.png

Fig 3. All vacancy rates by location type in June 2016 compared to June 2015 (Source: LDC)

 

Persistent vacancy- 6 month change (January to June 2016)

Persistent vacancy calculates the number of units vacant for longer than three years. A unit that has remained vacant for over the three years and thus is unlikely to be reoccupied.

The number of persistently vacant units decreased in June by -189 units (-1.6%), when compared to the start of the year (6 months). The GB average for the percentage of all units that have been vacant for over three years is 4.4%.

The North East has the biggest percentage of its total units that have been vacant for greater than three years (7.3%). The North of England continue to have the largest percentage of total units vacant for over three years. Overall the situation is getting better with the GB rate down -0.1% from the start of the year, with the North West having the biggest drop of -0.3% in this 6 month period (January to June 2016).

Copy_Fig_5_Towns_with_the_highest__of_units_vacant_for_3_years_or_more_Source_LDC___.png

Fig 4. Percentage of all units vacant for over three years across GB town centres in June 2016 (Source: LDC) 

Matthew Hopkinson, Director at LDC commented:

“The increase in demolished units that the LDC shows is a positive sign of structural change and is what is required in many locations up and down the country. Short term vacant units are not the issue; it is units vacant for longer than two years that indicate oversupply and detract from the health of a location.

These numbers do not reflect the BREXIT fallout which will take time to show in the data as a result of any change in openings or closures and thus the take up or not of vacant units up and down the country. With retailer and leisure operators being challenged by profitability as a result of increased costs and competition, coupled now by a significant drop in consumer confidence, then one would expect that change to be afoot.”

Media information - contact Julia Simion on 020 3111 4393 (0900-1830hrs) julia@localdatacompany.com

Download the 2015 Scottish Retail Report

INDEX METHODOLOGY

The Local Data Company visits over 2,700 towns and cities (retail centres & Government defined retail core), retail parks and shopping centres. Each premise was visited and its occupancy status recorded as occupied, vacant or demolished. Vacant units are those units which did not possess a trading business at that location on the day we visited it. The shop vacancy index is based on the shop vacancy rates of the top 650 town centres*. Shops are defined as Comparison, Convenience and Service retail uses.

*CLG retail core

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