Demand for retail space in the UK is continuing to drop, leading to an increase in empty premises across the country, a new report claimed today.
The Royal Institution of Chartered Surveyors (RICS) has found that fewer businesses looked to rent retail premises in the last three months of 2012.
Demand for retail premises declined right across the UK but the most significant falls in demand were seen in London, where chartered surveyors reported the steepest drops since the middle of 2009. The situation was somewhat less bleak in Wales and the Midlands, where occupier interest was flat compared with the previous three-month period.
The RICS also noted that other sectors were performing slightly better, with demand for office space and industrial units picking up – albeit from low levels. As a result, rent expectations in these areas are showing a flatter trend.
In the retail sector, however, surveyors predict further falls in rental values this year. As many as 22% more respondents to the RICS survey said that they expect rents to continue to fall rather than rise over the coming months.
Britain’s high streets have been in the spotlight in recent weeks, with HMV, Blockbuster and Jessops all going into administration. This catastrophic start to the new year for three retail chains came just a few weeks after electrical retailer Comet went out of business.
Simon Rubinsohn, RICS’ chief economist, said that the end of 2012 was an “incredibly tough period” for the UK’s high street and the trend is likely to continue for the time being, with demand for retail space still falling and more empty shops blighting the country’s town centres.
Away from the town centres, however, demand for retail premises appears to be more buoyant. An interim management statement released today by British Land, which owns retail parks, superstores, shopping centres and department stores, showed that its occupancy levels remain high, with administrations low.
The company reported “encouraging levels of demand across the business both from existing and new occupiers.”