Whilst big supermarkets, DIY stores and online retailers have largely survived intact over the last six months, permanent changes can be expected in the make-up of our high streets in the aftermath of the coronavirus epidemic. This is the prediction of the Centre for Retail Research (CRR), an independent monitoring and research group which provides market analysis for the retail sector in the UK and beyond.
With an estimated £9 billion worth of sales being lost during the lockdown, so far this year nearly 14,000 high street shops have closed for good, an increase of 25% over the same period last year. The CRR estimates that 10% of these stores will never re-open as retail outlets, with landlords now preferring to look for alternative uses for properties they are unable to re-let. The situation may be even worse in cities and bigger towns, where large numbers of one-time commuters have become accustomed to working from home.
Due to the coronavirus pandemic and the huge impact it is having on both commercial landlords and tenants we are extending our monthly commercial property legal clinic and are offering free daily telephone appointment slots for the foreseeable future. Commercial Property solicitor Osman Dervish will try and answer any questions you have regarding your legal position during this current crisis. If you need advice please book your appointment via Calendly.
Further research by property specialists Altus Group, in a poll of 400 industry executives, showed that already over a third of high street landlords in the UK are repurposing some of their retail units, whilst another 57% are actively considering changes. Even before any restrictions on opening during the coronavirus lockdown, high street retailers had been under pressure from over-supply, online sales, rising wages and increased rents. The pandemic restrictions have only made matters worse.
Just as their high street tenants have suffered through the lockdown, the knock-on effect of late or missing rent payments has hit landlords, including some of the biggest names in retail property. Hammerson, owner of the Bullring shopping centre in Birmingham, received less than half the rents it was due between April and June. At Meadowhall in Sheffield, British Land collected only 36% of rent on time during the second quarter. Intu, owner of Manchester’s Trafford Centre, the Metrocentre in Gateshead and Lakeside in Essex fared even worse, and was forced into administration in June.
With difficult trading conditions on the high street likely to continue for some time many landlords are looking to convert their empty retail properties into offices and flats. Commenting on the Altus report, Executive Director Scott Morey said: “the property industry is recognising opportunities that exist and will seek to repurpose assets during the period of uncertainty and well into the recovery stage”.
Bretherton Law have been serving people and businesses in Hertfordshire for over 50 years. If you are buying or selling business premises, looking to lease a new property, or subject to a rent review our experienced Commercial Property team will give you honest, professional advice. Contact Osman Dervish on 01727 869293, or use the contact form below.