LDC: retail vacancy rates in limbo

Britain’s retail vacancy rate has varied by no more than 0.1% in the past eight months, according to the latest statistics from the Local Data Company (LDC).

The retail rate dropped just -0.1% in October from 12.4% in September. The combined, all-vacancy (retail and leisure) rate remained unchanged at 11.2%, for the fifth month in a row. It has stayed within 0.1% of the current rate for eight months.

Improvements in the rates for retail and leisure had been evident until late spring, LDC said. It noted that the key driver of the weakening in improvement has been a -15% fall in reoccupations of vacant premises in the latest half-year, compared with the previous six months. Forces that had tended to increase vacancy over the same period, on the other hand, remained virtually unchanged.

The slope of falling retail vacancy from its last peak of 14.6% in September 2012 has now flattened. The plateau remains more than twice as high as its pre-crash base.

LDC director Matthew Hopkinson commented: “Five months is an unusually long time for vacancy rates to remain static. Looking at the figures, the causes are clear enough – the weakening in re-occupations and openings of new shops over the past half year, while net closures have remained at about the same level.”

He continued: “The dynamics of the market may be muted at present, producing stable figures, but they will in time reassert themselves; they always do. The question now is: in which direction will vacancy rates head when they start to move again – up or down?”

The Local Data Company visits over 2,700 towns and cities (retail centres & government defined retail core), retail parks and shopping centres. Each premises is 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 visited. The shop vacancy index is based on the shop vacancy rates of the top 650 town centres (based on CLG retail core).