Town centers across the UK are facing a stark and uncertain future as the number of vacant stores and commercial properties continues to soar at an alarming pace. The devastating effects of the Covid-19 pandemic have dealt a severe blow to businesses, resulting in a sharp uptick in vacancy rates within the retail sector. In fact, this surge represents the quickest growth witnessed in the last three decades, as reported by the Royal Institution of Chartered Surveyors (RICS).
The forecast for retail space appears bleak, with vacancy rates expected to surge further as more prominent stores such as Debenhams and Topshop shutter their doors for good. The recent RICS report, which surveyed nearly 800 experts in commercial property trading and leasing, shed light on the immense challenges confronting the commercial real estate market in the wake of the economic turmoil sparked by the pandemic.
Both the office and retail sectors are grappling with dwindling occupier and investor demand, while projections for rents and capital values continue to remain in negative territory. Notably, Surveyor John Thomson from Cirencester, Gloucestershire, has voiced fears about the potential devastation of town centers while hinting at a rising need for out-of-town industrial and retail spaces.
Amidst the gloomy outlook plaguing the retail sector, the industrial landscape has exhibited a remarkable degree of resilience, thanks to the surge in demand for supply chain space from online retailers. Surveyors are cautiously optimistic about the industrial sector’s future, foreseeing an uptick in rents on prime and secondary industrial properties in the upcoming year, owing to diminishing availability. The latest survey results have even revised the growth projections for the industrial sector upwards.
In essence, the retail terrain within town centers stands on shaky ground, while the industrial sector seems to be thriving against all odds. The profound impact of the pandemic on businesses and commercial properties across the UK is undeniable, and the path to recovery for town centers looms long and arduous.
For more information on the current state of retail and industrial real estate sectors, check out the following links:
1. BBC – Impact of Covid-19 on UK Retail Sector
2. Property Week – Industrial Sector Outperforms Retail and Office
