Round 16% of UK outlets lie empty in keeping with FOI

Company restructuring advisor Duff and Phelps has revealed that near 16% of all UK retail and store shops stay empty, in keeping with a Freedom of Data (FOI) request made to native councils.

Its analysis discovered that over 50,000 items in 418 councils stay closed, a mean of 121 empty items per council.

There have been 319,000 retail companies in 2018 in keeping with the ONS, with the advisors estimating the void fee is now at 15.9%. Enterprise charges have been deemed to be a contributing issue for the rise in empty items, with charges being an estimated 2.three% of general enterprise prices for a standard brick and mortar retailer, in comparison with simply zero.6% for pure-play on-line retailers.

The retail market is without doubt one of the most vital within the UK, with its financial output in 2017 estimated at £92.8bn, using round 2.eight million folks and comprising of 319,000 companies.

Philip Duffy, managing director, restructuring advisory, Duff and Phelps, mentioned: “The influence on native authorities can’t be underestimated both. FOI additionally recognized that 91% of UK native authorities are retail landlords in their very own proper. Empty items imply misplaced rental and enterprise charges revenue, all at a time when many native authorities are reporting elevated monetary pressures.

“The previous monetary mannequin of the normal brick and mortar retailer—primarily based on a excessive road or purchasing centre constructed round them within the publish battle period—was centred on common will increase in gross sales and 25-year leases with upward lease opinions solely.”

He added: “Because of this, it has meant excessive rents and occupancy prices. This has blown aside because of each the discounters and the dramatic uptick in on-line gross sales. The remaining query is whether or not this image continues all through 2019 and if that’s the case, at what velocity?”