GOVERNMENT cuts and a fall in consumer spending have created fresh uncertainty for the retail property market in Yorkshire, said a report.
The Colliers International Midsummer Retail Report said there were fewer signs of distress on the UK high street compared with a year ago. Retail administrations fell by 65% year-on-year in the first quarter of 2010 – down to 44 from 124 in the same period last year.
However, consolidation and cost cutting in relation to high street property continued to be a priority for many retailers – as cuts in public spending and increased taxes put more pressure on consumers.
The report said there had been a modest 1.5% decline in prime retail rents over the past year – a big improvement on the 11.5% fall logged a year ago.
Only a quarter of the 420 retail centres covered in the report showed a fall in prime retail rent between June, 2009, and June, 2010. That compares with 90% in the corresponding period last year.Š
Yorkshire shopping centres saw a 1.1% decline in retail rents. But the average disguised a mixed picture – with prime retail rents falling in Huddersfield, Keighley and Hull but rising in Leeds, Scarborough and York. Meadowhall continued to command the highest rents in the region.
The report also logged an increase in the proportion of empty retail units – from 10.7% to 11.4% now.
Greg Styles, head of retail development at Colliers International in Yorkshire:I believe that we will start to see a marked polarisation in the retail property market as a whole – with an increased demand for ‘quality stock’ in major towns, city centres and major regional shopping centres.
“We have found that retailers are finding it increasingly difficult to justify being represented in every town in the UK.
“This means that larger cities and towns like Leeds and the biggest shopping malls, like Meadowhall in Sheffield which offer ‘experience’ and choice for the consumer and high volume trading potential, will continue to be viable.
“In the smaller and weaker trading locations, high vacancy rates will persist.”
The report also highlighted the rise of internet shopping – with clicks taking over from bricks – as “savvy shoppers” looked to save money against high street prices and retailers looked for the most cost-effective way to sell their goods and services.