NEARLY one in six retail premises is now lying empty after Scotland’s vacancy rate for shop premises escalated in the second quarter of 2021, increasing to 16.1 per cent, up from 15.3% in the previous quarter and 3.2 percentage points higher than at the same point last year, according to the Scottish Retail Consortium (SRC).
The business group’s SRC-LDC Vacancy Monitor, in association with The Local Data Company, revealed that the vacancy rate for Q2 was 14.5% for high streets – up from 13.9% in Q1 – and 21.5% for shopping centres (20.1% in Q1). For retail parks it was 14.1%, up from 12.9% in Q1 although this retail sector remains the location with the lowest rate.
David Lonsdale, director of the Scottish Retail Consortium, warned that vacancy rates could increase further: “The vacancy rate stood at a new six-year high, up by a quarter over the past year, and it is far from clear that it has reached its apogee.
“The deterioration affected all destinations, with shopping centres faring especially poorly and retail parks once again performing relatively better.”
Mr Lonsdale noted that the fallout from the pandemic and Government restrictions continued to exert a heavy toll on many of Scotland’s retail destinations. “Retailers and shopping destinations are clearly going to have to work even harder to attract custom through a blend of improvements to service, experience, pricing, and promotions,” he said.
“However, these figures lend urgency to the need for a sharper focus from policymakers too, and for early measures to bring energy and footfall back into our city centres and retail destinations.”
Pointing to the imminent publishing of two new Government reports – on city centre recovery and on a town centres action plan – he said that “the measures which result cannot come soon enough, and there is certainly no room for complacency just because Covid restrictions are easing”.
Lucy Stainton, director of Local Data Company, said the retail sector could “hope that we are over the worst”, with the increase in vacancies across Great Britain half that of the same period in 2020.
She said: “After an initial flurry of CVAs, closures due to consumer behaviour shifts and cost-cutting exercises, retailers are now starting to dust themselves off with cautious optimism, keeping a close eye on the rapidly-changing infection rate and the pace at which vaccinations are taking place – two measures that could seriously derail recovery efforts should they not go in the right direction.”
However, she warned that with appetite for new space “increasing but still modest, there will simply never be enough demand to meet the supply”. The property market, Ms Stainton noted, “will be forced to think of more creative ways to utilise this space, to avoid exacerbating the already high rates of long-term voids across our retail destinations which are not only unsightly and costly for landlords, but also have a negative impact on surrounding stores”.