The Covid-19 crisis has pushed up vacancy rates across Britain’s retail sector, with Greater London being the worst-affected region.
The overall vacancy rate increased to 12.4% during the second quarter of the year, according to the latest vacancy monitor from the British Retail Consortium and the Local Data Company.
This is the eighth consecutive quarter of rising vacancies, growing from 12.2% in the previous quarter.
Shopping centre vacancies rose to 14.3% in Q2, from 14.1% in the first quarter. On the high street, vacancies increased to 12.4%, from 12.3% in Q1.
Retail Park vacancies increased to 8.3% in the second quarter, up from 8.2%.
Greater London posted the largest increase of all British regions after rising to 9.1%, from 8.9% in the first quarter.
Helen Dickinson, chief executive of the BRC, noted that the second-quarter rise has been relatively modest, since government support has enabled many locations to survive the lockdown.
However, she warned that the full effects of the pandemic remain to be seen.
“How many stores are left standing will depend on how demand recovers going forward, and the recent rise in vacancy rates is just the beginning,” she said.
“With many months of rent having built up during lockdown, the government must ensure local stores are not shouldered with unpayable debts. Without action, there will be unprecedented retail and business failures, job losses and knock-on consequences for highly geared property owners.”
Lucy Stainton, head of retail and strategic partnerships at the Local Data Company, predicted that vacancies will continue to grow. Figures for the first three weeks of Q3 show a 0.2 percentage point increase.
She added: “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 – an example of this being the planned conversion of the House of Fraser store at Westfield London into flexible office space.
“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.”