West Midland shopping centres hit by rising vacancy rates
A NEW report has painted a bleak picture of the West Midlands’ retail sector with towns and cities in the region branded some of the worst in the country for occupancy rates.
Vacancy rates – empty units – within the region are running at 18.9% for the first half of the year, an increase of 1.2% on the same period last year. The region is only slightly above the North West and the North East
The Local Data Company’s latest shop vacancy report shows that of the big centres in the country, Nottingham is the worst place with a vacancy rate above 30%. However, following it in second place is Walsall, where the rate is 29.6% – up 3.6% for the year.
Also in the top 10 poorest performing large centres are Wolverhampton (9th) and Stoke-on-Trent (10th). Indeed, of the top 10 all the centres are either in Wales, the Midlands or the North.
The news gets worse for the Black Country as Dudley is named the worst medium-sized town in the country with a vacancy rate of 32.4%. The town was long-ago decimated by the opening of the giant Merry Hill Shopping Centre virtually on its doorstep and in recent times has lost many of its major stores, including House of Fraser.
Nearby Brierley Hill is named the 4th worst small centre, with a vacancy rate of 29.6%, up 7.5% on the same period last year.
LDC said the conclusion from the data was that disposable income across the Midlands and the North had fallen considerably since 2005 and this had had a knock-on impact for the shopping centres.
It said the problem had been exacerbated by growth in the volume of retail space, which had diluted the overall profitability of the retail sector.
It said: “It is simply not possible to predict whether there is a structural oversupply of retail space, after all retailers in countries like the US survive with far higher ratios of space to income than are seen in the UK.
“There are, however a number of telling factors:
• the most likely economic scenario sees the economy recovering only slowly and not reaching capacity for a decade;
• further public sector spending cuts are planned that will further constrain wage growth and lead to less employment;
• real personal disposable income is likely to fall further and continue to constrain spending.
“This means that ‘normal’ service is unlikely to be resumed any time soon as far as retailers are concerned. For the High Street and especially for secondary shopping centres it is clear that the current high levels of vacancy are likely to remain and this eventually brings forward the prospect of alternative uses being made of the space.”
It said intervention in the form of regeneration schemes and Portas pilots would help at the margins, but the real problem for retailing in the UK is, and will remain for some time, the economy.
