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Store vacancies grow as retailers focus on prime sites

The number of shops that have been empty for more than two years has risen by 20%, according to research from commercial property consultancy Colliers International.

The rise comes as UK retailers are putting “prime” locations first as online shopping continues to impact demand for more secondary premises.

Rents for top tier properties have climbed by 1.8% in the year to April, marking the largest increase since 2008.

Colliers International’s head of UK retail Mark Phillipson said: “UK prime retail rents are up 1.8% year on year – the best increase since 2008 while prime shop vacancy is down 0.2% - the first nationwide improvement since 2014.

“But the proportion of the 420 locations we monitor which saw rents fall more than doubled, while the volume of shops that have been vacant for more than a year increased by 20%. Both these measures had been previously improving during the past two years, and this reverse signals a step-change which is widening the gulf between the best and the rest.”

The research shows that the highest performing retail-related property assets during the year have been logistics facilities that fulfil online shopping orders.

In London, rents have increased by 3%. The consultancy predicts this will remain flat for the next 12 months.

Meanwhile the consultancy estimates that brands are “quietly” marketing 25 shop leases on Bond Street.

Colliers head of central London retail agency Paul Souber added: “London is still a phenomenally strong shopping environment but the market has cooled.

“The more positive news is that the capital is still creating new flourishing pitches. The shopping offer on Tottenham Court Road is being transformed and we’ve seen top rents on the street increase by 7.5% - more than double the London average.”

Geographically the strongest performing retail market was Scotland, where top rents grew by 4.5% year-on-year.

The report also found that around 85% of former BHS stores within the M25 area have found new occupiers, but this amount fell to roughly 30% in the rest of the country.


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