The figure is not as high as some retail experts anticipated because the volume of retail warehousing reduced by more than 500,000 sq ft this year, with the space used for other uses. For example, proposals have been put forth to redevelop the former Homebase unit in New Malden and Fulham’s Hurlingham Retail Park into residential.
However, it’s expected the number will rise in the third quarter to above 8% thanks to a swathe of store closures by the likes of John Lewis, Oak Furnitureland and Laura Ashley. It’s also anticipated that by the end of the year the figure could be even higher thanks to retailer CVA’s and administrations.
“Since the end of 2019, with even less development taking place, second-hand supply has meant the vacancy rate of open A1 units has dropped to 6% from 6.3%. A significant amount of this prime space was occupied by expanding retailers such B&M, Home Bargains and Lidl,” said Liz Williamson of Trevor Wood Associates.
East Anglia has experienced the highest regional vacancy rate rise, with rates increasing to 6.8% from 5.2%, however, this is still below the national average.
The North West, Scotland, Wales, the West Midlands and Yorkshire and Humberside all saw increases, whereas Northern Ireland recorded a significant drop in its vacancy rate – from 8.5% to 7.3%.
The East Midlands and the South East have seen no changes in vacancy rates since the end of Q4 last year.
Sarah Wood, of Trevor Wood Associates said the numbers “should be treated with some caution as market size is such that with the major impact of Covid-19 the figures are temporarily distorted in the smaller regions while the market recovers and we are aware of a significant amount of floorspace under offer which could see this figure fall by the end of the year”.