Brexit uncertainty leads to fall in retail property moves

Pre-Brexit uncertainty led to a sharp drop in retail and leisure property moves, according to new figures from the Local Data Company (LDC).

According to the latest survey, overall activity levels dropped by 46 per cent in July compared with the same period a year ago.

This sharp drop was driven by stakeholders in the property sector delaying major decisions, such as new store openings, developments and conversions, in the lead up to the referendum in June.

Britain’s shop vacancy saw more favourable results, with a slight increase in July compared with the previous month, from 12.3 per cent to 12.4 per cent.

However, compared with a year ago shop vacancy decreased 0.6 per cent.

This change was driven by a 3.5 per cent fall in the number of new units in July and a 44 per cent drop in the number of vacant units getting new occupiers.

Leisure vacancy remained unchanged in July compared with the previous month at 8.1 per cent. All vacancy, which includes retail and leisure, also remained unchanged at 11.2 per cent.

The GB shopping centre vacancy rate dropped by 1.6 per cent in July to 13.3 per cent when compared with July 2015. GB shopping centres saw the biggest drop across all the location types for the second consecutive period.

Across all GB nations and regions, Scotland saw the biggest fall in its vacancy rate, down 2.8 per cent. Wales was the only region to see an increase in its vacancy rate, up 1.8 per cent in the last 12 months. Wales has also seen an increase every month of 2016 so far.

Retail park vacancy decreased by one per cent in July. The North East saw the biggest improvements, with a 2.8 per cent drop in vacancy in the 12-month period. The South West was the only region to see an increase, rising 0.2 per cent from 5.1 per cent to 5.3 per cent.

The town centre vacancy rate also increased by one per cent in July to 10.8 per cent, compared with the previous month. In the last 12 months, the vacancy rate dropped by half a per cent from 11.3 per cent in July 2015.

Scotland was the only region to see an increase in its vacancy rate in the last 12 months, up 0.7 per cent.

Matthew Hopkinson, director at LDC, said: “July’s numbers are significant when you look at the 12 month view and see what impact the political and consumer volatility has had over the last two months. The net result has been a freeze in normal activity levels, which are mirrored in many other areas of the economy.

“The marginal increase (0.1 per cent) is not significant especially when one considers the all time peak of 2012 being 14.6 per cent. The UK ‘high street’ is evolving and does not require saving.

“What it desperately needs is to be understood and have clarity as to what is the most relevant purpose and role for the location, demographic and local economy it serves. Be it Blackburn, Burford or Banbury, they are all very different and at different stages in their evolution.

“The digital age has accelerated the changes and made the need to understand change at a local level more important than at any time in the history of our retail places.”