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COMMERCIAL PROPERTY NEWS

With the Brexit inertia still dominating the political agenda and the latest RICS Commercial Property Market Survey reporting this as the underlying factor adversely affecting all three main sectors of the commercial property market, we now have the European elections to look forward to. No doubt many will vote against the main parties in frustration at the continuing political incompetence and prevarication. Quite where this gets us and how we are going to get the UK economy back on track, goodness knows! Meanwhile, a recent report puts the amount of retail floor space left empty from company voluntary arrangements, administrations and portfolio reconfigurations at close to 20 million square feet. Hot on the heels of House of Fraser’s problems comes Debenham’s and whilst the Swindon store has not yet closed, its future is cloudy. Retailers in their high street shops are suffering from structural changes arising from the quantity of internet shopping, on top of which, many are being squeezed by too high business rates, increases in the minimum wage and other costs, and so are seeking rent reductions from landlords. WH Smith reports reducing its rents by up to a third. Bookmaker, William Hill is asking landlords for 50% rent reductions as new Government legislation against fixed odds terminals in betting shops is prompting a flurry of bookmaking shop closures, just at a time when new vacant shop are just not needed on the High Street. For some time, High Street take-up has relied heavily upon the expansion by bookmakers, coffee shops, vape shops, charity shops and nail bars to fill empty shops. With a number of these now easing back, where is the new demand coming from to fill the empty shop properties? Certainly take-up from the restaurant sector has cooled thanks to various closures, including Patisserie Valarie as one of the latest. Like the retail sector, restaurants are being affected by the digital influence and the growth of services such as Deliveroo and UberEats. It seems, particularly the youth of today, cannot resist moving more than the finger it needs to press the latest app on its smart phone! However, growth in the low cost gyms market is growing with budget gyms said to be the fastest growing segment of the industry, according to PwC, increasing market share from 3% in 2012 to 12% last year. However, all is not lost for the high street and whilst we humans are not suddenly going to give up our smart phones, just maybe there is a trend of growing distrust of online and its ability to collect data from us, phones listening to our conversation and pushing goods to us. Lush has just closed a number of its social media accounts reflecting the consciousness of a growing number of millennials. So just maybe the digital detox could be the saviour of the High Street? 07/5//2019