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Vacancy rate increases revealing North-South divide

Published: 9 September 2010
Town centre vacancy rates have risen to 13% in six months, with areas in the South East and London holding up well, while the North struggles.
Vacancy rate increases revealing North-South divide
According to figures from the Local Data Company (LDC), vacancy rates in Great Britain have risen from just over 12% at the end of 2009, to 13% at the end of June 2010. However, the North appears to be faring worse than the rest of the country. A table of the 25 most affected large sized centres includes just three southern locations, with Watford at number 17, Bristol at number 23 and Reading at 24.

At the top of the list is Blackpool with a vacancy rate of 28.93% - although this is a slight improvement on 2009. Meanwhile, Grimsby has seen the biggest increase of the areas on the list - up 8% to take eighth place with a 21% vacancy rate.

Of medium-sized centres, Altrincam was at the top of the list with a vacancy rate of 30% - up nearly 9% on the figure reported at the end of 2009. Of the few southern centres on the list, Brixton, Wandsworth and Upper Norwood showed a small rise in vacancy rates of between 0.21% and 2.49%. Brixton had the highest rate of the three at 21%.

Overall at the half-year, there are many more centres getting worse than are getting better. Of the 63 large centres analysed by the LDC, 10 centres showed an improvement over the six months to the half-year and only eight of these showed a consistent improvement over the year. These improvers include Bath, Guildford, Central London, Liverpool and Cardiff.

While the LDC says it is too early to describe these centres as "coming out of recession", their retail markets are clearly getter better.

It is a similar story with medium-sized centres, with the 25 that have shown improvements mostly based in the southern half of the country, including Putney, Henley and Welsh centres such as Swansea and Pontypridd.

Many large and medium-sizd centres in the Midlands and North are yet to see a material improvement in vacancy. Given the importance of public sector employment in these areas, says the LDC, and in the face of spending and job cuts, it is likely that they are going to struggle to fill their high streets for some time.

The latest official data on sales volumes also show that comparison retailers are doing significantly better than convenience stores. Ironically though, it is the convenience sector that is taking the lead in new store openings.

Asda's ongoing purchase of 193 Netto stores is set to help the supermarket chain expand its smaller store formats, while Iceland has set out plans for 30 new stores, following the opening of 74 outlets in the year to March - 51 of these were former Woolworths sites.

LDC business development director Matthew Hopkinson commented: "Our latest report shows the reality of a slowed but still rising increase in shop vacancy rates across the country. Whilst some centres, particularly Central London and the South East are showing stabilisation or improvement, others in the provinces are not. The impact of the VAT increase, public sector cuts and fierce competition within the 'multi channel' retail environment make it increasingly hard for shops on our high streets. In light of these new and fast growing 'off the high street' channels, will we ever need these vacant shops again? For those that survive, service, quality of offer and price need to be their values in order to ensure they can thrive."

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