COVID begins to push up retail vacancy rates

In the second quarter of 2020, the overall vacancy rate increased to 12.4 per cent, from 12.2 per cent in the first quarter – marking the eighth consecutive quarter of increasing vacancy rates.

The British Retail Consortium (BRC) figures showed that all locations saw an increase in vacancies in the second quarter, with shopping centre vacancies increasing to 14.3 per cent from 14.1 per cent in the first quarter.

On the High Street, vacancies increased to 12.4 per cent in the second quarter - remaining in line with the overall rate - up from 12.3 per cent in the first quarter.

Retail park vacancies increased slightly to 8.3 per cent in the second quarter, up from 8.2 per cent in the first quarter – although it remains the location with by far the lowest rate.

Greater London saw the highest increase of all UK regions, rising from 8.9 per cent in the first quarter to 9.1 per cent in the second quarter.

BRC chief executive Helen Dickinson commented: “The second quarter rise in the vacancy rate across retail sites was modest, as government support allowed many locations to survive lockdown, however the full effects of the pandemic are yet to be seen, with relief that substantially reduced costs over the last period now being withdrawn.”

Lucy Stainton, head of retail at The Local Data Company, explained that since 2018, retail vacancy has risen steadily across the country, in part due to the widely discussed oversupply of retail property given changing consumer demands.

“Despite seeing an initial jump in vacancy in the second quarter, it is still too soon to measure the full impact of the pandemic as almost half of the non-essential retail units that were eligible to reopen following 15 June were still temporarily closed as of 1 July.

"Over the coming months, we are forecasting a spike in vacancy as the real fallout of the pandemic is felt,” she continued, adding: “In the first three weeks of the third quarter we have already measured a 0.2 percentage point increase, so we can see this will be a sustained trend.”

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