In Q4 2023 the overall commercial vacancy rate was stagnant at 14.0 per cent - but there is good news for prospective investors in the commercial sector.
High Street vacancies remained unchanged from the previous quarter, staying at 14.0 per cent; shopping centre vacancies fell to 17.7 per cent, down from 17.9 per cent in the third quarter of last year; and retail park vacancies decreased to 7.6 per cent down from 7.8 per cent in Q3.
Retail parks continue to be favoured by many GB occupiers, and are set to remain the most popular retail sub-sector according to the organisation compiling the figures, the Local Data Company.
LDC commercial director Lucy Stainton says: “This quarter reveals continued notable improvements in both retail parks and shopping centres, with retail parks, in particular, achieving their highest occupancy levels since 2019. We anticipate this positive trend will persist, given the continued focus of a diverse range of operators across various sub-sectors. Grocery-led anchors lead the way, but we also observe an uptick in other categories such as health clubs, health and beauty, and food to go.
“This diversification enhances the appeal of these parks to consumers, aligning with their broader shopping missions.
Whilst vacancy rates demonstrate continued stability post-pandemic and exhibit promising signs, it is crucial to remain attentive to persistent vacancy levels across GB. These levels serve as robust indicators of areas requiring structural change and substantial stakeholder intervention. Persistent or long-term vacant stock has risen across all location types and asset classes, highlighting the need for targeted redevelopment to address the lack of demand for traditional uses of these spaces.”
And John Phillips, chief executive of Spicerhaart and Just Mortgages, adds: “A drop in transactions in December will come as little surprise, as many potential buyers will have put their plans on hold in the run up to Christmas. It’s a similar story for the fourth consecutive month-on-month fall, as market conditions continued to impact the confidence and ability of many to push forward with plans – despite growing positivity.
“While it was far from an ideal end to the year, we have started 2024 on a really strong footing with high levels of buyer registrations and valuations being booked – the highest we’ve seen for a good number of months. New build lead numbers have also seen a strong start to the year too.
“Despite the recent inflation scare, there are many positive indicators for the market and the year ahead, and there’s no question potential buyers are beginning to respond to this and find some confidence. Whether they can find the affordability to match is another matter, and another reason why advice is so essential. There’s no doubt that affordability will continue to be a big factor this year. If brokers have ever needed a reminder to be proactive and remain visible in their local area, this is certainly it.”