EMPTY SHOPS What Does the Future Hold for Town Centres? Fo Reword

EMPTY SHOPS What does the future hold for town centres? Fo reword

The image of empty shops is one of the most powerful indicators of the pressure on retailers to survive in the current trading conditions. The focus on the supply of retail property in our towns and cities has subsequently been highlighted by the appointment of Mary Portas by Government to undertake an independent review, now taking centre stage in seeking to understand and tackle the apparent demise of the high street.

Clearly the aftermath of the recession created more savvy and cost conscious consumers resulting in a large number of independent and multiple retailers struggling to stay afloat or worse still going into administration. We have seen the virtual shopping experience continue to compete with physical stores as retailers look to the internet to grow sales and improve margins. Evidently the role of supermarkets continues to evolve, with a greater diversity of goods and services being offered from a larger number of locations and range of formats, both in and out-of-town.

The most pertinent issue for those involved in trying to create town centres that remain vibrant places to visit is how unoccupied retail space can be brought back into use, or put to alternative uses compatible with the aspirations and environment of a specific location. This of course then raises the question over the potential demand for additional floor space and if so what this means for the future development pipeline. Ultimately though the challenge is how can we, as an industry continue to produce vibrant shopping destinations in light of the above factors.

This research commissioned from Oxford Economics aims to provide further understanding of these issues, forecasting where the void rate is likely to settle in the coming years, attempting to draw conclusions on the relationship between empty property and rents for properties within proximity of an empty shop and establishing whether town centres have fared better or worse than shopping centres. In understanding cyclical and structural influences, such as the dominance of supermarkets, the resetting of leases, demographic movements and the increasing influence of the internet, the research identifies that the void rate will eventually settle at around 11% rather than the 6-7% seen on average before the turbulent economic conditions of 2007 onwards.

With the range and complexity of issues that need tackling this is just part of a very welcome debate and one which BCSC hopes this research will contribute to. We look forward to engaging with our partners, including retailers, owners, investors and local and central government in establishing solutions to this very visible manifestation of town centre decline.

Richard Akers BCSC President Managing Director - Retail Portfolio, Land Securities EMP TY SHOPS What does the future hold for town centres?

Researched and written by: Tom Rogers and Neil Blake Oxford Economics London SE1 9PL t: 020 7803 1444 www.oxfordeconomics.com

BCSC 1 Queen Anne’s Gate Westminster London SW1H 9BT t: 0207 227 4480 e: info@ bcsc. org.uk www. bcsc. org. uk

ISBN number: 978 1 897958 51 3 © BCSC (British Council of Shopping Centres) 2011

Acknowledgements BCSC wishes to thank the members of the BCSC Asset Management Edward Cooke BCSC / Yvonne Court Cushman & Wakefield / Committee, BCSC Local Government and Finance Committee and the Ian Fletcher British Property Federation (BPF) / Maria Hadisutanto following members of the project steering group for their support British Retail Consortium (BRC) / Davinder Jhamat BCSC / throughout the study: James Anderson British Property Federation Richard Paxton PropInvest / Blake Penfold GL Hearn / (BPF) / Steve Belam The Oracle / Robin Bevan Javelin Group / Nigel Poad Insite AM / Mark Teale cbre. Martin Blackwell Association of Town Centre Management (ATCM) /

The text of this publication may not be reproduced nor may talks or lectures based on material contained within the document be given without the written consent of BCSC. No responsibility for loss occasioned to any person acting or refraining from action as a result of the material included in this publication can be accepted by the authors or the publishers. Contents

ExECuTIvE SuMMARY 1

1. INTRODuCTION 4 1.1 Methodology 5

2. LONG RuN ANALYSIS OF vOIDS 6

3. STRuCTuRAL DRIvERS OF HIGHER vOIDS 8 3.1 Rise of the supermarket and decline of the non-specialist retailer 9 3.2 The rise of the internet 10 3.3 Resetting of leases 10 3.4 Is there just too much space? 11 3.5 Demographics 12

4. LATEST DEvELOPMENTS AND LOCAL vARIATIONS 13 4.1 The impact of the recession on void rates 14 4.2 Have town centres fared better or worse than shopping centres? 15 4.3 Regional and local variations in voids 16 4.4 One more factor – size matters! 17

5. FINANCIAL IMPACT OF vOIDS 18 5.1 The impact of voids on rents in surrounding areas 19 5.2 The direct impact of voids on lost rent 20

6. PROJECTION FOR vOID RATES 21 6.1 Methodology 22 6.2 Findings 22 6.3 Forecast 23

7. CONCLuSIONS AND RECOMMENDATIONS 24

8. APPENDIx 26 8.1 Town centre vacancy rate 27 8.2 Shopping centre vacancy rate 29 Executive summary

G Using data from a number of different providers the research finds evidence of a long run trend increase in retail voids, especially in-town centres. Town centre void rates rose slowly though steadily through the late 1990’s and into the last decade despite robust growth in consumer spending. The recession merely accelerated this trend. Shopping centres seem on the whole to be more synchronised with the economic cycle.

G The report explores a number of drivers of a trend increase in town centre void rates. - The increased penetration of supermarket sales in both food and non-food areas has been accompanied by falls of 30% or more in the number of independent grocers, butchers, bakeries and fishmongers. Half of town centres now compete with five or more supermarkets within a two mile radius. - In addition, the growth of internet retailing (which now accounts for approximately 10% of retail sales) has clearly had an impact on retailers of non-food items This report analyses the behaviour such as clothing, media items and electrical goods. of retail void rates in the UK’s town There is data to suggest that households in some areas may have cancelled their internet subscription during centre high streets and in-town the recession, however the longer term trend towards shopping centres over the long run more internet retailing seems unlikely to slow. and during the current economic - Meanwhile industry experts point to the expansion of downturn. shopping centre space in the 1980s and the 25 year leases that were commonly agreed, as a factor likely to drive a ‘wave’ of voids in the coming years. Some of this space will of course be re-let, however, some centres particularly in poorer performing locations, are expected to struggle to replace tenants. - This is partly related to the provision of new retail space better suited to business and customer preferences, particularly in out-of-town locations. The Midlands and Wales have seen particularly rapid expansion in new retail space over the last 10 years, while London and the South West have seen much slower growth. - Regarding the issue of demographic change, on average pensioners spend around a third less on goods per week than do people of working age and in every region other than London the shares of population aged 50-64 and 65+ have increased noticeably over the past two decades. As such, parts of the country with the most rapidly aging populations are unlikely to be able to support the same square footage of retail space that they did when a greater proportion of residents were full-time workers.

BCSC : EMPTY SHOPS What does the future hold for town centres? 1 G More recently the research finds that the recession G The report makes a projection for the void rate looking has had a substantial impact in driving up voids - town ahead. The analysis found a clear link between the pace centre retail void rates have increased by around 7% of consumer spending growth and voids, however there is during the last two years, from 8% to 15%. Although there also evidence to indicate both a long run increase over is less detailed evidence for shopping centres, it is clear the 1995-2010 period, and an acceleration of this trend that there has been a substantial impact in shopping some time around 2006-7, which in all likelihood centres also. corresponds with the growth of internet sales.

G Looking at the current dispersion of void rates around G Looking ahead, three years of weak growth in overall the country, it seems that at the regional level, with the consumer spending is expected, thanks to a weak labour exception of one or two regions, void rates for shopping market, the impact of public spending cuts, and increases centres and town centres do not vary by an especially in the cost of living. As spending growth recovers in large degree. Variations seem to be greater within earnest, from 2014 onwards, this will help void rates to regions though. edge down slightly from the 13-14% as anticipated to be seen in 2012. G The research also finds that smaller towns have tended to keep town centre voids lower than larger ones, possibly G On a positive, according to the projection a 1% increase as a result of a more concentrated core retail centre. in real consumer spending reduces the void rate by 1.1%, The very largest cities seem to benefit from their size, and a fall in the unemployment rate of 1% lowers the acting as retail destinations for surrounding areas. void rate by 0.6%.

G The reverse is true for shopping centres - although on the G It is also expected that high street voids to stay higher whole average void rates are slightly lower in shopping following the recovery than during the past as structural centres, small shopping centres are far more likely to factors continue to undermine the demand for some types have particularly high void rates than small town centres. of traditional retail space. In particular it is anticipated that internet sales will continue to take market share, G However the research finds evidence to suggest that partly as well established channels grow, but also thanks shopping centre void rates have displayed a more cyclical to growth in new technology such as through tablets pattern than town centre voids over the long run. At the and smartphones. town centre level there may be a structural decline in demand for retail space, while shopping centres are G Based on the current volume of retail space available, better able to respond to changing conditions and it is thought that voids will settle at around 11% rather consumer demands. than the 6-7% seen on average between 2000 and 2007. This will require communities, businesses and local G The research examined the available evidence on the governments to be creative in generating new ways of financial impacts of voids, both for the centres utilising empty space. themselves, while also looking at the evidence on how empty units impacts on the rents of other shops nearby. There is limited evidence available, though what evidence there is corroborates the relationship between higher voids and falling rents - one stud y1 on the high streets of London found that each percentage point increase in voids was associated with 10% lower rents.

1. Paved With Gold: The Real Value of Street Design , Commission for Architecture and the Built Environment, 2007.

22BBCSC :GEuMidPeT Yto S RHeOtPaSil DWehliavte dryoes the future hold for town centres? Recommendations 1. National planning policy should retain a strong emphasis on directing investment to town centres, then in edge- of-centre locations and only if suitable sites are not available should out-of-town development be considered.

2. In some locations there may be a case for reducing the amount of floor space classified as retail to create a more concentrated core.

3. Owners and investors, of high street property in particular, need to consider ways of reconfiguring space to make it more relevant to the market.

4. Shopping centre owners and groups representing town centres need to share intelligence on managing empty property, and mitigating its impact from a financial and aesthetic perspective.

5. Government needs to produce more regular and up to date data on town centre vacancy, along with forecasts on how this may change over time due to specific local economic, social and physical circumstances.

6. More research should be undertaken on the relationship between empty shops and the impact on the rental income of neighbouring properties to establish the true financial impact of empty units.

7. Government must review the effectiveness of its policy on taxing empty property given the low level of demand from occupiers for space in many locations and the impact this additional cost has on an owner’s ability to invest in its asset.

BCSC : EMPTY SHOPS What does the future hold for town centres? 3 1Introduction

Oxford Economics was commissioned by BCSC to investigate the pattern of voids 2 in UK town centres, including the high street and in-town shopping centres (the label ‘town centre’ to mean high street, and ‘shopping centre’ to denote in-town shopping centres, in line with Local Data Company definitions).

4 BCSC : EMPTY SHOPS What does the future hold for town centres? The aim was to investigate whether there were structural factors driving an increase in voids in the years prior to the economic downturn, how the downturn has impacted upon the pattern of voids at the national and regional level, which type of locations seem more prone to voids, and what the financial impact of voids is.

The report starts with an assessment of the long run trends in void rates, including an examination of which types of retail units seem more vulnerable to swings in the economic cycle and an assessment of whether there is evidence for a structural increase in the proportion of units void. It proceeds by looking in more detail at some of these structural drivers, including factors such as the internet, growth of out-of-town retailing and demographics. The next section analyses the impact of the economic downturn on the pattern of voids, and looks at which regions and towns have been hardest hit. A final section contains a statistical analysis of the outlook for retail voids, combining the trend analysis earlier in the report with Oxford Economics’ view on the outlook for UK consumer spending.

1. 1 Methodology Throughout the report use is made of a number of different datasets on retail voids. The Property Market Analysis (PMA) dataset has the longest time series on voids, stretching back to 1992 covering high street voids. This dataset is used for looking at the long run trend in voids, as well as the relationship between voids and economic variables over the long run. Elsewhere a range of official datasets is used, including the Information from the Investment Property Databank (IPD) Office for National Statistics’ Annual Business Inquiry (ABI) differentiates between town centre and shopping centre to track the number of retail outlets in the UK over time, rates, and provides a (fairly limited) geographical data produced by other private sector organisations including breakdown from 1995 onwards. This dataset is used for property consultancies and think tanks. A substantial use of looking at the different long run behaviour of shopping Oxford Economics’ own forecasts for the UK economy are centres and high streets, as well as a certain amount of used, particularly in the final section which makes a regional differentiation. projection for void rates.

At the finest level of disaggregation, use is made of the Local Data Company’s (LDC) Town Centre Intelligence database. The LDC dataset has void rates (as well as a range of other data) for a much greater number of towns and shopping centres around the UK but only from 2008, and on a semi-annual basis. A matched sample of around 100 towns is used, including both the town centre and local shopping centres to examine the drivers of differences between shopping centres and town centres.

2. A vacant unit is defined as not trading for business at that premise on the day of survey.

BCSC : EMPTY SHOPS What does the future hold for town centres? 5 2Long run analysis of voids

The longest available time series for town centre and shopping centre void rates in the UK (from the IPD 3) is set out in Figure 1, alongside growth in non-food retail sales. Void rates are displayed on the right hand scale in reverse order so that the correlation between falling retail sales and increase voids can be illustrated.

6 BCSC : EMPTY SHOPS What does the future hold for town centres? The data illustrates the steady trend increase in town Figure 1 Retail sales and void rates centre shop void rates. Town centre void rates increased % change on year ago % of units void from 2-3% on average during the second half of the 1990s to 10% 0% around 4% by 2006, despite a sustained period of reasonably Real non-food retail 9% Town centre sales (LHS) strong growth in consumer spending (and particularly so void rate (RHS) 1% 8% from 1999 to 2004). This rise in town centre voids 2% accelerated from 2005 onwards as consumption growth 7% 3% started to slow. Shopping centre void rates, by contrast, 6% seem to be more correlated with the economic cycle. Void 5% 4% rates fell through the second half of the 1990s, in line with 4% 5% the strengthening consumer spending, before rising again 3% from 2005 onwards - in line with the consumer outlook 6% 2% and town centre voids. 7% 1% Shopping centre void rate (RHS) 0% 8% The research finds evidence to suggest that shopping centre 1995 1998 2001 20042007 2010 void rates have displayed a more cyclical pattern than town Source: Oxford Economics / IPD centre voids over the long run. At the town centre level there may be a structural decline in demand for retail space, while shopping centres are better able to respond Figure 2 Void rates around the UK to changing conditions and consumer demands. % of units void 12% There is relatively little data available on void rates around Central London different regions going back more than a couple of years. 10% Rest of London Figure 2 sets out the best defined and available dataset, South East & Eastern again from the IPD highlighting void rates in central and 8% Rest of UK Greater London, as well as the East / South East and rest of 6% UK from 2004 onwards. Central London has much higher voids over the long run than the rest of the UK however the 4% rest of London, (i.e. Greater London) tends to fare better and constitutes a far greater share of London in total. By 2% and large the rest of the UK has void rates a percentage point or two above the rate in Greater London, however 0% there are likely to be more variations between different 2004 2005 2006 2007 2008 2009 2010 regions within this. (Blue line - data series refers to the UK excluding the South East and London.) Source: Oxford Economics / IPD Although this subset of data is much shorter than the series presented in Figure 1 it does seem to corroborate the idea of a structural trend upwards in void rates. Voids rose around the UK in 2006 and 2007 despite relatively strong retail sales growth (as shown in Figure 1, non-food retail sales rose by 5-6% in these years). Although voids in London and East / South East seem to have edged down a little in 2010 as the economic recovery begins, voids in the rest of the UK have remained much higher. Section 3 considers some of the possible drivers of structural increases in void rates at the national, regional and local levels.

3. A longer time series is available from PMA which begins in 1992, however only for high street voids.

BCSC : EMPTY SHOPS What does the future hold for town centres? 7 3 Structural drivers of higher voids

In this section, a number of structural factors that are likely to have caused void rates to have moved structurally higher over the past decade are examined. At the national level the research focused on the impact of new retail channels such as the internet and increasing numbers of supermarkets. The expansion of retail floor space across different regions is also examined, identifying areas where demographic change may have led to a structural decline in the demand for retail.

8 BCSC : EMPTY SHOPS What does the future hold for town centres? 3.1 Rise of the supermarket and Figure 3 Total retail outlets and supermarkets decline of the non-specialist retailer Number of outlets (‘000) 220 30 Probably the most widely cited driver of structural decline 29 in town centres is the rise in supermarket numbers - 215 at first in out-of-town locations drawing trade away from 28 town centres altogether, and in more recent times in 210 27 smaller town centre locations. Figures from the ABI indicate that the number of supermarket outlets 4 rose 205 26 by over a third from 1996 to 2007, and in March 2011 25 200 CACI found that 42% of towns now had five or more Total retail 24 supermarkets within a two mile radius of the town centre. outlets (LHS) 195 Supermarkets (RHS) 23 There is much debate about the exact impact the growth 190 22 6 7 8 9 0 1 2 3 4 5 6 of supermarkets has had on independent traders, however 7 9 9 9 9 0 0 0 0 0 0 0 0 9 9 9 9 0 0 0 0 0 0 0 0 1 1 1 1 2 2 2 2 2 2 2 the decline in the number of independent food retailers is 2 indisputable - the number of greengrocers fell by 45% Source: Oxford Economics / ONS from 1996 to 2007, the number of butchers, bakeries and fishmongers all fell by 30% or more. Figures from the ABI indicate that supermarkets have increased their share of Figure 4 Decline of the specialised foodstore total retail sales from 38% to 42% over this period, Number of outlets (‘000) however other estimates indicate the movement in food 12 Greengrocers Fishmongers sales has been even more significant. 10 Butchers Bakeries Off Licences Consumers’ shift in food spending away from town centre 8 locations towards supermarkets (predominantly out-of- town offering free parking and a greater range of goods 6 under one roof) suggests that unless there is an increase in demand from other types of retailers there is likely to 4 be a structural impact on the rate of high street voids. Although the expansion of supermarkets into town centre 2 convenience stores will absorb some of this space, the range of food types provided by these stores will mean 0 6 7 8 9 0 1 2 3 4 5 6 7 9 9 9 9 0 0 0 0 0 0 0 0 9 9 9 9 0 0 0 0 0 0 0 that less space overall is likely to be needed. 0 1 1 1 1 2 2 2 2 2 2 2 2

Source: Oxford Economics / Haver Analytics

4. Described in the ABI as ‘Non Specialist Retailers, Predominantly Food ’.

BCSC : EMPTY SHOPS What does the future hold for town centres? 9 3.2 The rise of the internet Figure 5 Internet sales as % of total retail sales 10% A second factor driving voids higher on a structural basis is the expansion of internet retailing. Latest figures from the 9% ONS indicate that internet sales have trebled over the past 8% four years and now account for around 7-8% of total sales 7% (rising to 9% during the run up to Christmas 2010). 6% 5% Anecdotal evidence suggests the first types of retailers to 4% feel an impact from internet sales were those selling 3% recreational media like books, CDs and DVDS. Over time

many of these original web based retailers (such as Amazon) 2% have diversified into a wider range of goods including 1%

electrical goods, clothing and many other sectors, and other 0% Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 specialist retailers (for example ASOS, the online fashion Source: Oxford Economics / Haver Analytics specialist) have emerged. More recently supermarkets have

increased their marketing of their online food and non-food offer, and there is increasing evidence that consumers Figure 6 % of homes with internet acess looking to buy high-end goods such as expensive electrical 85 % items are increasingly comparing and trialling the goods in 2008 2009 2010 store before purchasing online to secure the best price. 80 %

75 % Of course, the internet sales data may slightly overstate the level of sales taking place entirely online - a number of 70 % retailers are using the ‘click and collect’ method, where customers check availability and order online and then 65 %

collect the same day from their local store. Nonetheless, 60 % this is likely to be much more accessible to larger retailers able to split the development costs of such platforms 55 % between multiple stores. 50 % London SE East EM WM NW SW Y&H NE Wales Scot Data on the penetration of internet access by region Source: Oxford Economics / ONS indicates that retailers in wealthier regions may have felt a larger impact from internet sales than those in less well off parts of the country, where fewer households have internet 3.3 Resetting of leases access. Indeed, the ONS survey on Internet Access 2010 suggests that in the South West and North East internet One less-well documented structural driver of increases in penetration actually fell during 2010 (possibly due to the void rates was highlighted in previous BCSC research on the increased cost of living and rising unemployment forcing future of secondary shopping centres 5, published in 2010. households to cut back). Looking ahead, as other regions This work noted that a substantial portion of tenants in catch up with the level of penetration seen in the better shopping centres built during the 1980’s signed 25 year off regions the impact of internet retailing may be felt leases, which were now close to expiration. Particularly in more evenly around the country. However, it seems likely areas where other centres have since been built there is a that even in regions where the vast majority of homes possibility that many of these retailers will choose not to already have access, the penetration into retail sales renew in their current location. This is thought to be the will continue to grow - for example, through case particularly in the poorer performing centres, where smartphones and tablets. attracting new tenants could be especially difficult due to low footfall. CBRE noted in April 2009 that over the coming few years “many retailers will use expirations to get out of underperforming markets… smaller retailers are likely to follow larger ones, sparking a spiral of decline in weak locations ”.

5. Secondary Centres: The Impact of the Recession on Secondary Shopping Centres , BCSC, September 2010.

10 BCSC : EMPTY SHOPS What does the future hold for town centres? Witho ut a su bst an tial prima ry data gathe ring effort though it Figure 7 Regions seeing least expansion in retail space is difficult to measure the extent to which this has started to 1998=100 happen, or anticipate in advance how much further this cycle 115 has to run. However, although the expiration of some leases will no doubt cause some tenants to re-evaluate their 110 presence in a particular location this does not necessarily 105 mean that the space is unviable. It is likely to require 100 shopping centre managers to become increasingly flexible and 95 offer shorter lease terms (at least in the first instance), as well as accept that there are likely to be periods of vacancy 90 North East 85 between shorter term tenants, however this could mean that Yorkshire and the Humber some centres get a new lease of life. Much is likely to depend 80 London on the approaches taken by different stakeholders (including 75 South East managers, existing and prospective tenants, owners and 70 8 9 0 1 2 3 4 5 6 7 inve s tors, and local authorities) on a case by case basis. 8 9 9 0 0 0 0 0 0 0 0 0 9 9 0 0 0 0 0 0 0 0 0 1 1 2 2 2 2 2 2 2 2 2

Source: Oxford Economics / CLG 3 .4 Is the re jus t too much space?

As noted earlier that secondary shopping centres in Figure 8 Regions seeing fast expansion in retail space particular seem to be at risk from rising void rates in recent 1998=100 years, particularly in areas where newer retail developments 115 have opened. Figures 7 and 8 set out the amount of retail floor space across different Government Office Regions 110 indexed to 100 in 1998. There is a change to the data collection methodology in 2005 that reduces estimated retail 105 floor space in all regions by up to 20%, so it is more sensible to focus on trends between 1998-2004 and 2005-2008. 100 The regions that saw least expansion in retail space over the North West East Midlands two periods are presented in Figure 7, while those seeing 99 West Midlands East of England the f astest expansion are presented on the Figure 8. The South East Wales evidence is mixed. In the figures in the previous section it 90 8 9 0 1 2 3 4 5 6 7 8 9 9 0 0 0 0 0 0 0 0 was observed that London, the East and South East all had 0 9 9 0 0 0 0 0 0 0 0 0 1 1 2 2 2 2 2 2 2 2 more modest increases in void rates compared to the rest 2 of the UK, but the East and South East have seen rapid Source: Oxford Economics / CLG expansion in retail space.

CLG data does not extend beyond 2008 however more recent evidence from BCSC 6 indicates that the rate of new space coming on stream has slowed substantially in the years since – falling from 8 million sq ft of new shopping centre space to just 2 million in 2009 and the same in 2010. Further, since the construction time for an average shopping centre is around two to three years, the likelihood is that with the consumer outlook still looking extremely uncertain there will be little further investment in 2011 and 2012, and it could be further out before shopping centre development really recovers in earnest. As such, it could be that in those areas where there is excess space, the slowdown in new space coming on stream will at least provide some temporary respite for existing centres.

6. Shopping Centre Development Pipeline 2011 , BCSC / Lunson Mitchenall, March 2011.

BCSC : EMPTY SHOPS What does the future hold for town centres? 11 3.5 Demographics Figure 9 Age and spending on goods £ per week spent by households with head of household One final structural driver explored in this section is the average age, 2009 aging of the UK population. Figure 9 sets out average weekly 250 spending on food, non-alcoholic drinks and other types of goods in 2009, split by the age group of the head of reporting household. As illustrated, older households tend 200 to spend less on goods, with the biggest impact coming after retirement age. 150

This is partly a generational difference - today’s 100 pensioners by and large had lower paying jobs during their working lives than today’s 50-64 year olds, who are far 50 more likely to work in higher income service sector professions. However, even these workers will experience a fall in disposable income as they move into their 60s and 0 >30 30-49 50-64 65-74 75+ 70s. This is not just due to giving up full-time work but also Source: Oxford Economics / ONS due to lower annuity rates on their pension pots, the phasing out of final salary schemes in the private sector, and further into the future, the longer wait to receive a Figure 10 Aging populations state or public sector pension. Growth in shares of total population of certain ages groups, 1991 to 2009 Figure 10 illustrates the aging of populations in different UK 4% government office regions. Only London has seen a shift towards a younger population over the past couple of 3% decades, with most other regions aging noticeably. This is 2% likely to have contributed further to a decline in the quantity of retail floor space needed. 1%

0%

-1% W Y E o e a r s S s N k S N t t o s o

o o

u -2% M M r S & u r t t c i i t t h h

d d o h h H

W l

l OAP+ 50-64 t W W

a a u E l E E a n a n m e e a -3% a a l U n d d s e s s s b s d s t K t s t t s t Source: Oxford Economics / ONS L o n d o n

12 BCSC : EMPTY SHOPS What does the future hold for town centres? 4Latest developments and local variations

This section examines the latest data and what it says about the variation in void rates around the UK’s regions and towns. It commences at the aggregate level, looking at the impact of the recession on voids. The different distributions of voids around town centres and shopping centres are then considered, and some of the characteristics of towns and shopping centres that seem to help explain why voids are higher in some than others.

BCSC : EMPTY SHOPS What does the future hold for town centres? 13 4.1 The impact of the recession There is less data available for individual shopping centres (Figure 12 - only observations for December 2010 and June on void rates 2011 are available), and there are comparability issues as Figures 11 and 12 illustrate the impact of the recession on the method of collection has been greatly enhanced over town centre and shopping centre voids. Figure 11 plots town this period, meaning the data is more accurate for June 2011 centre void rates in June 2009 and June 2011 for 100 towns than it is likely to have been six months ago. Nevertheless, around the UK using data from the LDC’s Town Centre the data does suggest that even over the past six months Intelligence database. The diagonal line represents conditions in shopping centres have deteriorated further. unchanged voids - any point underneath this line denotes a town where voids were higher in 2011 than in 2009. In the In addition to this broad picture of the recession driving up sample all but four or five towns had higher voids in June void rates there is a degree of correlation between the 2011 than two years earlier, and the average increase was labour market impact and the impact on town centre voids. 7% (from around 8% to just over 15%). Based on a simple correlation amongst the towns in the sample, each 1% increase in the unemployment rate is associated with a 0.2% increase in the town centre void rate, Figure 11 Town centre voids as shown in Figure 13. Of course there may be some Summer 2009 (vertical axis) and Summer 2011 (horizontal axis) circularity here, s ince shops clos ing d own will lay o ff 40% workers, who may take some time to get back into 35% employment. The impact will be greatest where retailing provides larger shares of local employment. 30% Blackpool

25% Hexam, However, the recession has impacted on void rates through Market Harborough other channels as well as the direct impact on consumer 20% Newquay Wandsworth incomes and labour markets. Much more difficult to quantify, 15% Stockton though arguably almost as important is the closure of a on Tees major retailer that helps pull footfall into a town centre or 10% shopping centre. Woolworths is probably the most obvious 5% example of a major retailer of this stature that has gone bust 0% during the recession however, other retailers have also closed 0% 5% 10% 15% 20% 25% 30% 35% 40% stores that are regarded as key to sustaining footfall - for Source: Oxford Economics / LDC example, the closu re of Marks & S pe n cer stores in Woking, Grantham, Skegness and Scunthorpe. When stores like these Figure 12 Shopping centre voids close, the attractiveness of a town centre or shopping centre declines, and potential shoppers head elsewhere, with a Void rate in December 2010 (vertical axis) and in June 2011 knock-on effect on other retailers within the town. (horizontal axis) 80% Figure 13 Town centre voids and unemployment 70% Void rate horizontal axis, unemployment vertical axis. June 2011 60% 16%

50% 14% Margate 40% 12% Stourbridge 30% 10%

20% 8%

10% 6%

0% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Oxford Economics / LDC 2%

0% 0% 5% 10% 15% 20% 25% 30% 35% 40% Source: Oxford Economics / LDC / ONS

14 BCSC : EMPTY SHOPS What does the future hold for town centres?

4.2 Have town centres fared better Figure 14 Distribution of town centre voids or worse than shopping centres? Horizontal axis indicates upper end of void range (%), vertical axis number of town centres in range. June 2011 Data from the LDC (referring to June 2011) suggests that in 30 the sample of 100 towns, town centres and shopping centres have broadly similar average void rates, at around 15%. 25

However, this masks a much greater spread amongst 20 shopping centres than for towns: G far more shopping centres have very low (<10%) void rates 15 than do town centres 10 G however, the worst hit shopping centres have over half their units void - no town centre has been this badly hit. 5 The majority of shopping centres have lower void rates 0 than the average around town centres. This could be 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% because the units within shopping centres are typically Source: Oxford Economics / LDC owned and managed by one or in some incidences two organisations, compared with high streets which tend to Figure 15 Distribution of shopping centre voids be owned by multiple landlords. This means that decisions on making improvements to facilities for example, or Horizontal axis indicates upper end of void range (%), vertical axis number of shopping centres in range. June 2011 flexing rent in vacant units to fill them and sustain footfall, are easier to implement in shopping centres than 30 high streets. Therefore shopping centre owners on 25 average have greater power to keep units full.

20 However at the same time, while most shopping centres have a lower void rate than the average high street, if 15 shopping centre owners find themselves unable to cope with a sudden burst of voids, or funding for improvements 10 proves difficult to come by, the concentrated ownership structure may actually become a burden as it focuses 5 losses on one owner as opposed to multiple landlords. 0 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% More Source: Oxford Economics / LDC

BCSC : EMPTY SHOPS What does the future hold for town centres? 15 4.3 Regional and local variations Figure 16 Regional town centre void rates in voids % of units void, June 2011 25% The LDC data also indicates there is a relatively narrow distribution of void rates when looking at the regional level. For town centres the North East seems to stand out 20% as having relatively lower void rates, while London and Wales seem to do better at sustaining shopping centre 15% occupancy. For most other regions in both categories there is a much narrower distribution (between 17% 10% and 22% in town centres and 14% and 18% in shopping centres). This suggests that local factors are more 5% important than regional ones. Figure 13 looked at the impact of local variations in labour markets. The next section examines one final characteristic of towns and 0% shopping centres themselves that seems to be well correlated with void rates. Y E o a W r E s k e a t s

s s S N

o S N t t & o o o

f o u M M

r u H E r Source: Oxford Economics / LDC t t L i i t t h h n d d u o h h W

g l l m n

W W a a l E E a d a n n b e e a a l n o d d e e s s s s d n s s s t t t t r Figure 17 Shopping centre void rates % of units void, June 2011 20%

16%

12%

8%

4%

0% Y E o a W r E s k e a t s

s s S N

o S N t t & o o o

f o u M M

r

u Source: Oxford Economics / LDC H E r t t L i i t t h h n d d u o h h W

g l l m n

W W a a l E E a d a n n b e e a a l n o d d e e s s s s d n s s s t t t t r

16 BCSC : EMPTY SHOPS What does the future hold for town centres? 4.4 One more factor - size matters! Figure18 Town centre size and void rates Void rate (%) on vertical axis. Number of shops on horizontal axis. There is some evidence to indicate that smaller town June 2011 centres have managed to limit void rates better than larger ones. Figure 18 plots latest void rates against the 40% number of shops within the town centre retail area. 35% There is a clear relationship between town size and void 30% rates between towns with 100 to 400 shops - larger towns have proportionately more voids. This relationship flattens 25% out at around 500 shops though, and it would seem that 20% for the very largest towns and cities (500-1,000 shops) size is a virtue. 15% 10% This could represent a distinction between small towns 5% with a highly concentrated retail core that serve a local community, larger cities that act as retail destinations for 0% surrounding areas, and medium size towns that are caught 0 200 400 600 800 1000 1200 1400 in the middle. The distinction between prime, secondary Source: Oxford Economics / LDC and tertiary space could be a factor here. Small towns with concentrated town centres are likely to have fewer Figure19 Shopping centre size and void rates secondary and tertiary locations than medium sized towns, Void rate (%) on vertical axis. Number of shops on horizontal axis. while for the very largest cities the rate of growth in demand June 2011 for prime locations could have pushed developers into 70% formerly secondary or tertiary locations. Medium sized towns close to large shopping destinations will benefit from 60% neither of these factors and this could explain why voids 50% seem to be higher in medium sized towns. 40% A very different story seems to hold for shopping centres, where the smallest centres are most likely to have high 30% void rates. A third of shopping centres with fewer than 20% 25 units have 30% of units void, whereas only a handful of larger centres do. This could be because smaller centres 10% are less likely to have the space and facilities to attract 0% an anchor tenant that ensures footfall which other stores 0 50 100 150 200 250 300 350 can feed off. Source: Oxford Economics / LDC

BCSC : EMPTY SHOPS What does the future hold for town centres? 17 5 Financial impact of voids

In this section, the financial impact of retail voids is examined. This will primarily concern the impact of voids on rental income, both directly through the rent lost on void units but also through the downward pressure on other units that voids create, as fewer shops means lower footfall and lower income for units that are occupied.

18 BCSC : EMPTY SHOPS What does the future hold for town centres? Determining the financial impact of void units on local However, this result might only be applicable to London high rents is difficult though. To isolate the impact of a void on streets, which may compete more fiercely for tenants than the local retail unit rental markets really requires data on high streets in separate towns. In addition, the study was comparable units within the same area before and after the conducted in 2007 - it is possible that the economic void unit has become void. However, there is little publicly downturn has accentuated the effects illustrated by this available data on rents for specific units and even at the study. It is also a cross-sectional study, looking at the town / city level data is sparse. The impact is also likely differences between locations at a point in time. The to be lagged, with existing tenants tied into leases and results therefore are not necessarily applicable to a single unable to immediately use void units as leverage with location over a period of years (indeed, where rents are existing landlords. agreed on a contract for a fixed period of time, the impact of voids appearing in neighbouring units is only likely to This research presents two sets of results that give some appear with a lag). indicative estimates of the impact of voids on local rents - one set of estimates for London high streets published by To supplement this finding, available data for prime retail the Commission for Architecture and the Built Environment rents in large UK cities was examined. Colliers Retail Rents (CABE), and one set of results for UK towns using rental monitor has data for rents in five such cities, and the yields from Colliers CRE retail monitor and LDC data. The change in rent over the June 2008 - June 2010 period is direct loss of rental income for four (anonymised) shopping plotted in Figure 20. Although there is extremely limited centres is examined using publicly available data on rental data, at face value the results suggest that at least in some costs and void rates. cities (Edinburgh, Birmingham and Leeds in particular) the increase in void rates has been felt in lower rents.

5.1 The impact of voids on rents Figure 20 Voids and rents in major cities in surrounding areas Change in average prime retail rent, 2008-2010, vertical axis. Change in void rate, June 2008 -– June 2010, horizontal axis. CABE commissioned a study into the impact of good street 10% design 7 on local economies, including the effects on local Glasgow property prices and retail rents. The study was based on ten 5% Manchester London town centres ranging from Chiswick to Walworth, 0% and involved a substantial amount of field research. 5% 10% 15% 20% Amongst other results, CABE found that: -5%

G controlling for other factors, there is a clear negative -10% Leeds relationship between average Zone A retail rents in these -15% Edinburgh locations and the proportion of units either void, or occupied -20% by charity or betting shops Birmingham -25% G in particular, each 1% increase in the void rate was associated Source: Oxford Economics / Haver Analytics with a reduction in rent of £46m 2 / year. Given that the average retail rent across the sample was around £500 m 2 / year, this approximately equates to a 1% increase in void rates reducing prime rents by about 9%

G putting this into context, the highest rent district in the sample (Hampstead, £1,151m 2 / year) had 1% of stores either vacant or occupied by a charity or betting shop, the lowest rent district (Streatham, £251m 2 / year) had 9% of shops vacant, charity or betting.

7. Paved With Gold: The Real Value of Street Design , Commission for Architecture and the Built Environment, 2007.

BCSC : EMPTY SHOPS What does the future hold for town centres? 19 5.2 The direct impact of voids The rental income lost by these four anonymised centres is estimated by looking at the rent for a typical unit in that on lost rent centre as advertised by the relevant commercial estate Using publicly available information from commercial estate agency, then multiplying this by the number of units vacant agencies, the financial impact of void rates on the rental within the centre. Of course, not all the units within the income in four shopping centres with the highest void rates centre will be the same size, so the estimates have a according to the LDC was estimated. These estimates should margin of error. only be seen as very rough estimates though: Nevertheless, it is clear that the loss of rental income is • the units advertised do generally seem typical of the centre likely to be a serious concern for the owners of high void (indeed, since most of the centres have a large number of centres - the estimated income lost to voids within these voids, it should be expected that a typical unit will be centres ranges from £164,625 to £280,000 - in the case of available for rent), however better data on the total square centre A the loss is equivalent to half the total potential footage of the centre would allow a more robust assessment. income. As discussed in section 4.2, when bearing these Unfortunately this data is more difficult to obtain for units kinds of losses, continuing to have to pay the costs that are not currently being offered for let therefore it is associated with these units (for example, servicing loans difficult to be certain all units are comparable and paying empty property rates) it is difficult for centres to make the necessary investments to retain existing • in addition, there is considerable uncertainty about the clients and attract more. These centres therefore seem impact of voids on rents - the very limited time series especially at risk. analysis for different cities indicates that a 1% increase in vacancy rates lowers rents, while the impact is larger within London districts. To put it another way, the rent on units that are occupied could be depressed by the availability of so many units. Estimates set out as follows could understate the true scale of income lost due to retail voids.

Shopping Shopping Shopping Shopping centre A centre B centre C centre D

Total units 30 22 35 28

vacancy rate 50% 45.5% 22.9% 28.6%

Advertised annual rent £10,975 £19,000 £30,000 £35,000 for typical vacant unit

Rental income lost £164,625 £190,000 £240,000 £280,000

20 BCSC : EMPTY SHOPS What does the future hold for town centres? 6 Projection for void rates

This section examines the prospects for void rates in town centres over the coming decade. The projection is based on an analysis of the historical drivers of voids and Oxford Economics’ own macroeconomic forecasts.

BCSC : EMPTY SHOPS What does the future hold for town centres? 21 Looking at the behaviour of voids over the past couple of 6.2 Findings decades there is evidence to suggest a clear link between consumer spending growth and lower voids, as well as a The findings across the two estimations are broadly trend increase in void rates that accelerates around 2007. consistent - there is a negative relationship between voids It is expected that void rates will continue to grow for the and consumer spending growth, as well as an upward trend. next couple of years, before falling later in the decade as However, using the long run data allows us to estimate this consumer incomes recover. Towards the end of the decade trend more accurately, as well as test whether or not the though, long run factors start to dominate again and void trend accelerates at any point, perhaps due to the rates edge upwards. introduction of internet shopping. As such, the annual data is used in the following discussion.

Statistical analysis indicates that over the period 1993-2010 6.1 Methodology there is a trend increase in the void rate of 0.3% per annum. Using PMA data (which starts in 1992 on an annual basis and Neither the supermarket share variable nor the square from 2008 Q1 is available on a quarterly basis) the long run footage variables are significant in the analysis by themselves trend in overall UK high street voids was analysed. however the long term time trend may capture some of the impact of these two structural drivers, especially given the • Using the annual series has the advantage of allowing the difficulties of measuring these two factors accurately. relationship between voids and relevant variables to be modelled, as well as possible structural shifts and time The data also suggests a shift upwards in this trend increase trends, incorporating one full economic cycle - starting in 2007 - from this point on the increase is just over 0.4% with the recovery from the early 1990’s recession, the long per annum. As noted earlier, internet retail sales data is period of growth and the descent into probably the worst only available from 2007 onwards and ONS data on internet of the current recession. penetration amongst households before 2008 is only published on a three year average basis. It is difficult • Using the quarterly series allows for more accurate charting therefore to be confident whether this increase in the trend the current recession, as well as the position today. rate is due to a surge in internet penetration. However, since the supermarket share remained reasonably steady As explanatory variables the rate of growth in real (price- from 2006-2009 and retail development has slowed adjusted) consumer spending is used, a measure of the markedly during into the recession, it is regarded this as the square footage of retail space from CLG (albeit with a most likely driver of an increasing trend in void rates. number of necessary modifications and assumptions), a measure of the supermarkets’ share of total retail Figure 21 Structural drivers of void rates spending (from the ONS’ ABI), and a time trend to capture Supermarket share Growth in total floor space other factors. Ideally a measure of internet sales would of all retail sales one year ago (2009 estimated) also be included in the analysis, though only ONS produce 43% 3.5% this starting in 2007 - therefore a time trend to try and capture this factor has been used. 42% Growth in floor space 3.0% 41% 2.5% 40% 2.0% 39% Supermarket share 1.5% 38% 1.0% 37%

36% 0.5%

35% 0.0% 2 9 0 1 5 7 8 3 4 6 9 0 9 0 0 0 0 0 0 0 0 0 0 9 0 0 0 0 0 0 0 0 0 2 1 2 2 2 2 2 2 2 2 2 Source: Oxford Economics / CLG / ONS

22 BCSC : EMPTY SHOPS What does the future hold for town centres? On a positive, a 1% increase in real consumer spending Figure 22 Cyclical drivers of voids reduces the void rate by 1.1%, and a fall in the Unemployment rate Real consumer spending unemployment rate of 1% lowers the void rate by 0.6%. growth on year ago These two factors are closely linked to the wider economic 6% 12% recovery of course, but it does make sense that both could 5% have an impact - for example, consumer spending directly 10% supports the recovery in retail activity, while a falling 4% 3% unemployment rate underpins retailer confidence in the 8% future regardless of the outlook today, and therefore 2% discourages premature closure of stores. 1% 6% 0% 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 -1% 4%

6.3 Forecast -2% 2% Oxford Economics current forecast is for consumer spending -3% in real terms to remain broadly unchanged in 2011, before -4% 0% beginning a very slow recovery though 2012 and 2013 Source: Oxford Economics / ONS growing by just under 1% per year. Through 2014-2017, as employment starts to recover and wage growth starts to Figure 23 Projection for void rates outstrip prices, acceleration in real consumer spending Proportion of high street shops vacant ( %) growth is expected to around 2.5% to 3% per year, before settling back towards a long run trend of 2% by the end of 14 % the decade. 12%

Combining the time trends and Oxford Economics’ outlook 10% for real consumer expenditure produces the projection for high street voids (on the PMA measure) set out in the Figure 8% 23. Void rates are expected to remain elevated over the 6% next couple of years before edging down by 2014-15. Forecast However, with the trend void rate having continued to 4% increase in the meantime the scope for a meaningful 2% reduction in voids is likely to be limited. Indeed, as consumer spending moderates these structural factors 0% will mean that voids start to rise again. 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 (Data series is for the whole of the UK, including the South East and London.) Of course, all forecasts are subject to a degree of Source: Oxford Economics / PMA uncertainty. As noted previously, it has been possible to identify a clear trend in void rates over the past 15 years or so but it has been harder to quantify the impacts of these separate drivers. Looking ahead, for the projection to be robust assumes a continuation of these drivers. As discussed, it seems clear that the share of goods sold via the internet is likely to continue to rise, and with supermarkets moving into convenience store formats and expanding into more non-food areas, particularly online, it is plausible to suppose the supermarket share will start to rise again. Less clear is the rate of retail space development - if the development of new retail space remains depressed beyond the next few years, this could imply the forecast is a touch pessimistic about the prospects for retail voids.

BCSC : EMPTY SHOPS What does the future hold for town centres? 23 7 Conclusions

The incidence of void retail units on the UK’s high streets and shopping centres has increased substantially over the course of the recession, but long before the recession began a number of structural drivers were undermining the demand for traditional retail space in many parts of the country.

24 BCSC : EMPTY SHOPS What does the future hold for town centres? As such, even as the economy emerges from recession over Recommendations the coming years, we should not expect a return to the low void rates seen during the last decade. It is anticipated that Based on what the research has found, key recommendations barring substantial changes to the offer provided by current are as follows: high streets and shopping centres, or a rationalisation of some of the space currently classified as retail, the void 1. National planning policy should retain a strong emphasis rate could settle in the double digits. on directing investment to town centres, then in edge- of-centre locations and only if suitable sites are not Yet there are clear differences in the experience of towns available should out-of-town development be considered. and shopping centres up and down the country. Part of these differences can be explained by tangible factors, such as 2. In some locations there may be a case for reducing the the size of towns and the people they attract as visitors, amount of floor space classified as retail to create a the rate of internet and supermarket penetration within more concentrated core. different localities, the pattern of recent retail development, and the impact of major store closures on 3. Owners and investors, of high street property in footfall. However, quantifying all of these factors is difficult. particular, need to consider ways of reconfiguring space Further development of the available data on voids, internet to make it more relevant to the market. penetration and retail space development would all help further highlight the precise drivers of void rates. 4. Shopping centre owners and groups representing town centres need to share intelligence on managing empty It seems that even in neighbouring towns, and shopping property, and mitigating its impact from a financial and centres within the same location, can have quite different aesthetic perspective. experiences with voids. At this level, it does seem that the right management can make a lot of difference. One thing 5. Government needs to produce more regular and up to that could help would be for a relevant organisation to date data on town centre vacancy, along with forecasts develop a best practice guide to ensure that wherever on how this may change over time due to specific local possible town centre and shopping centre managers in top economic, social and physical circumstances. performing locations were able to share their experiences with their counterparts in struggling locations. 6. More research should be undertaken on the relationship between empty shops and the impact on the rental Nevertheless, for the next couple of years the proportion income of neighbouring properties to establish the true of void units in the high street and shopping centres will financial impact of empty units. continue to rise. The burden of maintaining empty properties, as well as continuing to service debts, 7. Government must review the effectiveness of its policy responding to pressure from other tenants for lower rents, on taxing empty property given the low level of demand and paying empty property rates on void units could prove from occupiers for space in many locations and the too much for some landlords. Some of the units that are impact this additional cost has on an owner’s ability to lost may represent a difficult but ultimately necessary invest in its asset. adjustment to new economic realities. However, there is also a danger that some units will be lost that could have been viable over the longer run for retail or other usage. To prevent this needless destruction of value will demand a co-ordinated effort from all stakeholders - including retailers, landlords and investors, local and national government, and the people who live in the affected communities themselves.

BCSC : EMPTY SHOPS What does the future hold for town centres? 25 8 Appendix

26 BCSC : EMPTY SHOPS What does the future hold for town centres? 8.1 Town centre vacancy rate

Town centre Shop vacancy rate (%) Town centre Shop vacancy rate (%) Abergavenny 5.7 Epping 2.3 Accrington 22.2 Exmouth 10.8 Aldershot 22.9 Falmouth 7.0 Altrincham 26.5 Farnham 9.2 Barrow-in-Furness 20.4 Folkestone 19.1 Berkhamsted 8.7 Godalming 8.7 Billericay 3.7 Golders Green 4.4 Birmingham 23.9 Gravesend 20.0 Blackburn 24.5 Greenwich 15.7 Blackpool 26.6 Grimsby 27.7 Bracknell 22.0 Harpenden 3.5 Bradford 28.6 Hartlepool 29.4 Brentwood 9.2 Havant 23.0 Bristol 21.7 Hexham 7.3 Brixton 21.0 High Wycombe 16.2 Burnham-on-Sea 7.8 Hinckley 19.0 Burnley 20.1 Kingston-upon-Hull 24.5 Camberley 20.7 Letchworth 21.7 Canary Wharf 7.0 Liverpool 20.4 Carmarthen 16.9 Louth 10.5 Chatham 21.2 Margate 37.4 Chichester 7.8 Market Harborough 7.2 Chippenham 8.9 Merthyr Tydfil 10.0 Clacton-on-Sea 10.2 Middlesbrough 20.4 Cosham 11.6 Morpeth 10.2 Cwmbran 6.2 Muswell Hill 2.7 Dewsbury 28.6 Neath 11.3 Doncaster 24.8 Newmarket 8.4 Dover 23.5 Newquay 6.9 Dunstable 22.1 Newton Abbot 9.3 East Ham 4.9 North Shields 17.2

BCSC : EMPTY SHOPS What does the future hold for town centres? 27 Town centre Shop vacancy rate (%) Town centre Shop vacancy rate (%) Northwich 12.9 Stourbridge 16.1 Nottingham 24.7 Stratford 9.3 Penzance 10.7 Street 4.8 Pontypridd 16.2 Sunderland 21.0 Redcar 19.8 Sutton-in- Ashfield 13.1 Reigate 4.0 The Metro Centre 17.2 Rochdale 18.8 Upper Norwood 17.1 Saffron Walden 7.7 Upton Park 4.6 Sale 16.9 Walsall 26.4 Scunthorpe 17.7 Walthamstow 7.5 Sevenoaks 7.9 Wandsworth 34.0 Sheffield 23.9 Whitley Bay 15.8 Shipley 21.0 Wimborne Minster 13.4 Sleaford 12.2 Woking 11.2 St. Ives, Cambridgeshire 10.1 Wolverhampton 25.3 Stockport 27.5 Worksop 16.3 Stockton-on-Tees 29.0 Source: Local Data Company, June 2011 Stoke Newington 10.1 Stoke-on-Trent 24.4

28 BCSC : EMPTY SHOPS What does the future hold for town centres? 8.2 Shopping centre vacancy rate

Shopping centre Town vacancy rate (%) Shopping centre Town vacancy rate (%) Abbeygate Grimsby 8.4 Crispin Centre Street 33.3 Academy Aberdeen 56.3 Crown Centre Stourbridge 48.6 Accrington Arndale Accrington 26.2 Cwmbran Cwmbran 6.9 Arcade (The) Ald ershot 22.3 Dundas Arcade Middlesbrough 11.1 Arcadian Centre Birmingham 7.7 Eden High Wycombe 11.4 Atrium Camberley 50.0 Emery Gate Chippenham 4.2 Baytree Centre Brentwood 17.9 Exchange Arcade Nottingham 7.4 Beacon North Shields 4.6 Fletchers Walk Birmingham 36.4 Beacons Place Merthyr Tydfil 9.1 Forum Chester 5.9 Bligh’s Meadow Sevenoaks 10.3 Foundry (The) Scunthorpe 20.5 Bon Accord Aberdeen 3.1 Frenchgate Doncaster 12.0 Borough Parade Chippenham 7.7 Freshney Place Grimsby 12.8 Brindleyplac e Birmingham 9.1 Garden Square Letchworth 11.0 Britannia Hinckley 3.2 Great Western Arcade Birmingham 31.2 Brixton Village Brixton 64.3 Green Lanes Barnstaple 11.5 Cabot Circus Bristol 9.5 Greyfriars Carmarthen 5.4 Canary Wharf Canary Wharf 1.3 Grosvenor Chester 16.2 Captain Cook Square Middlesbrough 6.5 Hepworth Arcade Kingston-upon-Hull 16.8 Castlegate Stockton-on-Tees 11.8 Hildreds Centre Skegness 5.3 Cavern Walks Liverpool 6.4 Hill Street Middlesbrough 4.4 Centre (The) Margate 57.5 Idlewells Sutton-in- Ashfield 5.8 Charlton Dover 42.1 Kirkgate Bradford 11.2 Charter Walk Burnley 5.9 Liverpool One Liverpool 12.8 Chilterns High Wycombe 32.8 Magnolia Centre Exmouth 3.3 Cibi Walk Abergavenny 0.0 Mall Middlesbrough Middlesbrough 16.4 Clarendon Centre Oxford 3.8 Mall Blackburn Blackburn 6.0 Clarks Village Street 0.0 Mall Bristol Bristol 33.7 Clayton Square Liverpool 14.5 Mall Camberley Camberley 10.1 Clifton Down Bristol 8.9 Mall Trinity Centre Aberdeen 4.2 Colonnades Doncaster 2.5 Mall Walthamstow Walthamsto w 1.9 Corner House Nottingham 50.0 Mander Centre Wolverhampton 23.7

BCSC : EMPTY SHOPS What does the future hold for town centres? 29 Shopping centre Town vacancy rate (%) Shopping centre Town vacancy rate (%) Martineau Place Birmingham 11.8 Rochdale Exchange Rochdale 16.3 Meadowhall Sheffield 6.9 Ryemarket Stourbridge 23.3 Meridian Centre Havant 22.3 Saddlers Centre Walsall 15.2 Merseyway Stockport 21.9 Square Sale 9.5 Metquarter Liverpool 18.8 St. Catherine’s Walk Carmarthen 40.0 Metrocentre Gateshead 17.4 St. Georges Gravesend 12.2 Middleton Grange Hartlepool 26.3 St. James Centre Edinburgh 12.5 Moor Sheffield 18.7 St. Johns Liverpool 12.0 Neath Indoor Market Neath 3.8 St. Nicholas Centre Aberdeen 36.7 Old Square Walsall 31.1 St. Stephens Kingston-upon-Hull 14.6 Omni Centre Edinburgh 0.0 St. Tydfil Square Merthyr Tydfil 8.1 Orchard Square Sheffield 20.0 Stratford Centre Stratford 3.5 Overgate Dundee 8.7 Taff Vale Pontypridd 0.0 Pallasades Birmingham 28.6 Thamesgate Gravesend 7.6 Paradise Forum Birmingham 0.0 Union Square Aberdeen 5.2 Parishes Scunthorpe 19.9 Victoria Centre Nottingham 16.5 Park Place Walsall 23.3 Wellgate Dundee 33.3 Park View Whitley Bay 10.4 Wellington Centre Aldershot 7.6 Pavilions Birmingham 28.6 Wellington Square Stockton-on-Tees 19.9 Peacocks Centre Woking 10.6 Westgate Oxford 9.8 Pentagon Chatham 12.6 Wheatsheaf Centre Rochdale 17.9 Portland Walk Barrow-in-Furness 16.0 Willow Place Corby 26.8 Potteries Stoke-on-Trent 9.9 Wolsey Place Woking 7.5 Princes Mall Edinburgh 40.1 Wulfrun Wolverhampton 12.0 Princes Quay Kingston-upon-Hull 23.4 Source: Local Data Company, June 2011 Princess Of Wales Dewsbury 16.0 Princess Square Bracknell 11.2 Priory Centre Worksop 14.3 Prospect Kingston-upon-Hull 25.4 Quadrant Centre Dunstable 24.7

30 BCSC : EMPTY SHOPS What does the future hold for town centres?

EMP TY SHOPS What does the future hold for town centres?

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