There was better news for the commercial property sector, battered by the COVID-19 pandemic, with the number of outlets left empty last year still high, but partially offset by more than 40,000 new businesses opening.
Research shows that nearly 8,000 outlets were left empty last year, according to a report by the high street analysts Local Data Company (LDC), as Covid lockdowns accelerated the shift towards shopping online and hit high street retailers.
However, that number was down from 11,319 net closures in 2020, while 43,000 new businesses opened, an increase of more than 10 per cent.
How did smaller firms benefit from Government support?
According to the research, fast-food outlets, barbers, grocery stores, cafes and beauty salons were the fastest-growing sectors, as independent businesses took advantage of cheaper rents to launch.
LDC said previously that Government support measures, such as business rates relief, had enabled them to remain open and capitalise on cheaper rent deals from landlords as their bigger rivals stumbled.
LDC predicts a gradual reduction in the vacancy rate over the next few years, but is not expecting a swift return to pre-pandemic levels.
Big department store premises still empty
Department stores were hit hard with nearly 90 per cent of former Debenhams empty almost a year after the department store closed its doors for the last time, according to a report in The Guardian newspaper.
However, the easing of restrictions on dining out and takeaways meant there was also a significant recovery in the leisure industry, with a net 52 outlets closing compared with 2,640 a year earlier.
The proportion of vacant premises slipped to 14.4 per cent from 14.5 per cent after six years of increases as landlords redevelop empty buildings to adapt to a new shopping and leisure reality.
Dealing with ‘knock-on’ impact
Lucy Stainton, the commercial director at LDC, said department stores were a particular problem, with only 12 per cent of recently vacated sites now reoccupied, while just over a fifth of former BHS outlets remained empty five years after the department store collapsed as a result of the costs of fitting out and maintaining such large sites.
She said landlords and councils would have to think beyond retail to fill the space as there was a “knock-on impact” on the attractiveness of a town or shopping centre when key sites remained vacant.
The report added that more than 9,100 retail and leisure premises were redeveloped in 2021, up nearly 49 per cent from the year before. However, five per cent of high street outlets have remained empty for more than three years and six per cent of those in shopping centres, according to the report.
Latest posts by Gunduz Misiri (see all)
- Tips for buying or selling your home - May 24, 2022
- Refurbishment an opportunity to maximise commercial rent - May 17, 2022
- Understanding the difference between freehold and leasehold properties - May 17, 2022