Duff & Phelps research shows scale of challenge facing UK High Street
15.9% of all shops and retail outlets in the UK now lie empty, according to information obtained by corporate restructuring advisor Duff & Phelps under the Freedom of Information Act (FOI).
Philip Duffy, Managing Director, Restructuring Advisory at Duff & Phelps, says: “Getting an accurate picture of the real health of the High Street is difficult, but by using FOI, we managed to gain valuable insight into what local authorities are experiencing. With a total of 418 councils in the UK, our mean average indicates that the total number of retail units that now lie empty stands at 50,578, or an average of 121 empty retail units per council.”
There were 319,000 retail businesses in 2018 according to the ONS. Given this figure, it is believed that the void rate now stands at 15.9% of the total. FOI identified that 91% of UK local authorities are retail landlords in their own right. Empty units come at a time when many of them are reporting increased financial pressures.
“The old financial model of the traditional bricks and mortar retailer, based on a High Street or shopping centre built around them in the post war era, was centred on regular increases in sales and 25-year leases with upward rent reviews only. As a result, it has meant high rents and occupancy costs. This has blown apart as a result of both the discounters and the dramatic uptick in online sales. The remaining question is whether this picture continues throughout 2019 and if so, at what speed?” Duffy concludes.
