Shop vacancy rates hold steady in final quarter of 2023

The overall shop vacancy rate stood at 14 per cent in the final quarter of 2023, unchanged from Q3 and 0.2 percentage points higher than the same period last year, industry data showed on Tuesday.

Geographically, the highest rates were in the North East, though a slight improvement from the same time last year, according to market researcher Local Data Company. Greater London has the lowest vacancy rates.

High street vacancies remain unchanged from the previous quarter, staying at 14 per cent. Shopping Centre vacancies fell to 17.7 per cent, down from 17.9 per cent in Q3 2023.

Retail parks reached the highest occupancy since 2019, with vacancies decreasing to 7.6 per cent in Q4, which was an improvement on 7.8 per cent in Q3. They continue to be favoured by many occupiers, and are set to remain the most popular retail sub-sector.

“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,” Lucy Stainton, commercial director at Local Data Company, said.

“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 exhibit promising signs, she said it is crucial to remain attentive to persistent vacancy levels across Britain.

“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,” Stainton added.