Empty shop rates are set to plummet by 2020, driven by “a new wave of retail development”, according to new research by property agencts Colliers International.
The high street is approaching a seven year recovery phase, with vacancy rates dropping to 2006 levels by 2020.
In seven years time, the number of empty shops will fall from its current level of 12% of total floor space, to 7%, “a similar level to the peak in 2006”, the Colliers’ Midsummer retail report said.
Recovery will largely be driven by a significant increase in population, with a predicted 3.3 million additional people living in Great Britain in 2020, and modest economic and expenditure growth.
Another contributing factor will be mounting online sales. Currently 13% of all non-food expenditure, this is likely to rise to about 20% by 2020.
In four to five years time, the UK will see a surge in retail development, with the main concentration in the major UK cities.
In London the population is estimated to grow by around 20%, fuelling demand for new shopping centre development, whereas the north east of England will only see a 5% increase in population, resulting in minimal new development.
By 2025, supply and demand for retail floor space will reach equal levels, with only 10m sq ft of excess vacant space. But what’s left will be the wrong size or in the wrong location, making it relatively unusable, according to Mark Charlton, head of research and forecasting.
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