Shop vacancy rates rose slightly for the first time in five months in March, increasing by 0.02 per cent, according to new data.
UK town centre vacancy rates remained below 14.5 per cent for the sixth consecutive month, though climbed to 14.14 per cent over the month compared with 14.12 per cent in February, the Local Data Company (LDC) announced.
Matthew Hopkinson, Director of LDC, said of the findings: “Another stable month for GB shop vacancy is not insignificant in that we have now had six months consecutive months that the rate has been below the all time high of 14.6 per cent in August and September of 2012.
“We have yet to see the rate go below 14 per cent which was last seen in July 2010.
“This along with the macro economic environment implies that for the time being this is the new norm unless we see significant negative churn from the 67 per cent of units occupied by independents or more large chain failures.
“That said it still means that we have over 22,456 empty shops in our top 650 town centres.
“The former is the equivalent of central London having every shop empty.”
As the high street continues to seek ways to reinvent itself as the digital space expands amid the omnichannel boom, a number of initiatives have been set up to utilise vacant units.
Next week, development initiative the Collective Project will launch a collection of pop-up shops at up to 18 vacant retail units on Camden High Street in a bid to revive the local economy and support young entrepreneurs.
However, despite a series of high profile administrations earlier this year with the likes of Jessops, HMV and Blockbuster calling in administrators, consultancy KPMG announced today that the number of retail administration appointments in the first quarter of this year were down by 47 per cent.
Richard Fleming, UK Head of Restructuring at KPMG, said that, while these figures are encouraging, the market remains uncertain.
“Retail sales figures are slowly recovering but what we are seeing overall is better working capital management and some retailers are undoubtedly benefitting from the demise of those who have fallen in the last two years,” Fleming said.
“Today’s numbers may well suggest that we have reached the bottom of the market, setting the agenda for a gradual return to growth, but market fundamentals such as the shift away from large property portfolios to internet sales mean that many companies, while not on the brink of failure, may well be operating under ‘zombie’ conditions, unable to access the finance they need to right size their business models and make the necessary investments in systems needed for the new multichannel trading environment.
“If zombie companies are unable to resolve their financial or operational model issues, their gradual decline could well necessitate an insolvency mechanism, such as a ‘pre-pack’ or a company voluntary arrangement.”