Last month it was announced that Britain has managed to avoid triple dip recession with a growth of 0.3 per cent in the economy. While this is positive news it does not necessarily mean that the troubles faced by businesses are over – in fact, figures released this week indicate that the situation on the high street may be getting worse.
According to the RICS UK Commercial Market Survey, the number of empty retail properties on the high street rose further in the first quarter of 2013. This has presumably come as something of a blow to small retailers, as the news from the high street has been largely positive up until this point.
The survey questioned chartered surveyors across the country to determine the commercial property market accurately from a professional viewpoint. While good news came in the form of steady demand for office and industrial space, 21 per cent more chartered surveyors believed that the number of unoccupied shops across the UK had increased rather than decreased.
Chief Economist at RICS, Simon Rubinsohn, believes that the future of the commercial property market in the UK will be determined by the performance of the economy.
He says; “The high street has been struggling for some time now and the pressure doesn’t look like easing up on retailers and landlords any time soon.
“Significantly, other areas of the commercial property sector are beginning to look a little healthier, with tenant demand for office space and industrial units edging upwards.
“However, it remains to be seen whether this improvement can be sustained in the absence of a more meaningful pick-up in economic activity.”
He went on to say that the lack of meaningful wage growth “will continue to act as a drag on the high street”, reinforcing the widely-held belief that consumers simply do not have the disposable income required to make a significant positive impact on the retail industry.
Of course, this news is a setback not only for the high street but also for commercial landlords, many of whom will be forced to drop rents in a bid to attract tenants. A growing number of surveyors now believe that the poor market conditions are causing retail premises to lose value – essentially creating a no-win situation for those struggling to let their property.
The country may be slowly getting back to its feet, but as reports of this kind demonstrate, Britain still has a long way to go.
How do you think landlords could attract tenants to their properties – is it solely a matter of lowering rents or are other options available?
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