LDC: north/south divide in high street health

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One in four high streets’ health is improving but north/south divide continues with the south improving three times faster than the north, according to a report from The Local Data Company.

The Local Data Company’s latest report on vacancy rates, entitled ‘Not All Boats Rise On The Tide’, was presented at LDC’s tenth retail summit. It analysed over 3,000 town centres, shopping centres and retail parks and reports on retail and leisure vacancy rates in the first half of 2014.

According to the figures, shop (retail) vacancy rates have shown marked improvement towards the end of the year from their peak of 14.6% in February 2012 to reaching below 13.5% (13.4% in May 2014) for the first time since June 2010.

The north/south divide evidenced in previous reports is still clear with southern centres seeing vacancy rates improve by around 9% while centres in the north and midlands have seen just a 3% improvement. The north-west continues to be the worst region for all (retail and leisure) vacancy at 16.9% but has shown improvement of 0.4%, while the north-east is the only region to have shown a decline in its fortunes with an increase in vacancy rate by 0.4% to 16.4%. Of the top ten worst town centres for vacant retail and leisure premises, all of which are above 23%, six are in the north-east or north-west. Conversely, of the top ten best performing town centres with the fewest vacant units, seven are in greater London and the south-east.

Small towns (<200 units) are in the healthiest state at 8.9%, which is a 0.1% improvement on the end of 2013. Medium towns (200-400 units) have also shown a decrease in their vacancy average by 0.2% to 11.7% and large towns/cities continue to have the highest overall ‘town’ vacancy rate at 12.9% but have also shown the greatest improvement at -0.6%. Overall, retail parks lead the pack at 8.9%, which is an improvement of 1.5% on the same period last year and shopping centres continue to have the highest vacancy rate average at 15.3%, an improvement of -0.8% on 2013.

LDC’s new ‘health index’ which analyses ten qualitative and quantitative attributes of vacancy and occupancy shows that of the 3,000 locations analysed, in and out of town, there is an overall balance of 20% between improving and weakening centres with 60% being stable. When applied to high streets then the balance is more positive, with 24.4% (277 high streets) improving and 17.4% (197 high streets) weakening.

The research by LDC reveals division in vacancy rates by region
The research by LDC reveals division in vacancy rates by region

Local Data Company director Matthew Hopkinson commented: “The first half of 2014 has shown a positive improvement in vacancy rates across the country both by geography and location type. What is very clear, however, is that this positive trend is not universal and hides significant variances. The fact that the North West’s vacancy rate is more than double that of London is one clear example of polarisation.

“LDC’s new health index is a more comprehensive way to look at the health of our towns, shopping centres and retail parks as it looks at vacancy data as well as the quality and breadth of occupation. While overall it shows more high streets improving it still highlights that there are nearly 200 that are declining with one in five medium high streets in decline.”

He continued: “The persistency of vacancy is increasingly significant as recent analysis by LDC shows that over 100 locations’ vacant units have been vacant for more than three years and this equates to over 1,600 units. What is to be done with these units and the other 50,000 that have no trading business?

“What is encouraging in this report is that high streets are fighting back, as are shopping centres. But, and it is a big but, consumer confidence remains fragile and the out of town and mega mall offer continues to strengthen as they become destinations and often destinations of choice. What is unique and the greatest trump card that high streets have is that, in theory, they are at the heart of communities and as such have an in-situ audience, but one that must not be taken for granted and must be energised, nurtured and entertained.”

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