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High Street Vacancies Still Stubbornly High, Says Report

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http://www.bbc.co.uk/news/business-24025297

High Street vacancies remain "stubbornly high", according to a report from the Local Data Company.

Its data for Britain showed that the average vacancy rate in the top 650 centres was 14.1%, down just slightly from the previous reading of 14.2% taken in February.

Wales had the highest national vacancy rate, at an average of 17.5%, Scotland hit 14.9% and England 14.0%.

Of the large centres, Blackburn had the highest vacancy rate of 26.9%.

Cambridge recorded the lowest proportion of empty shops at 7%.

I doubt it's going to get better any time soon. There's an over supply and rents are too high.

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http://www.bbc.co.uk/news/business-24025297

I doubt it's going to get better any time soon. There's an over supply and rents are too high.

Interesting remark in there:

"We just let out one shop in Bradford that had been empty for three years for a client who owns 20 or 30 shops," he says.

Its previous tenant, a jeweller, had been paying £93,000 a year rent. It has now been let to a pawnbroker for £65,000.

"In a place like Bradford, there will be 10 or 15 suitable vacant properties for any retailer to choose from," Mr Stirling-Aird says.

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I wouldn't be in a rush to pay 60% of the 2007 price for a shop in Bradford these days.

I expect pawnbroking is a boom industry in Bradford nowadays so they can probably afford it.

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Surely that rent is too high. Or is the pawnbrokers the size of a Homebase store? :huh:

I think they have the decimal point in the wrong place!

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Surely that rent is too high. Or is the pawnbrokers the size of a Homebase store? :huh:

I agree! But it's interesting that:

  1. Such high rents are being asked (are the landlords greedy or just have stupidly large mortgages?)

  2. It takes a 30% cut in rent to find a tenant, but even that is a struggle

  3. The article doesn't mention that the rent is still ludicrous!

Any chance the banks will seize commercial properties from non paying landlords, write off the debt, and sell them for a "normal" price? Probably not.

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Any chance the banks will seize commercial properties from non paying landlords, write off the debt, and sell them for a "normal" price? Probably not.

Maybe. In 1993 the banks swung the axe on massively over-stretched and luxuries-lover Serpico, with his com-props. Serpico who thought he deserved to stay at the top in his fancy mansion.*

(*Mansion bought by Serpico at the bottom of the previous crash in 1976, almost given away in fact.. suspicion it was taken by the authorities to recover former owner's debt .. no money around, or perhaps lower supply or demand for mortgage debt).

I agreed to let them try the bank at the £40K, I had nothing to lose the security contract I had signed restricted the bank only to property I was amazed the bank accepted their offer leaving a £160K shortfall

http://www.housepric...ndpost&p=444946

Bank valued the com-prop at at £225K as start of recession, £160K debt on it, accepted £40K for it. Trouble being the new owners, who bought the com-props for £40K, got carried away with expanding their business, before recession end, and the bank then took their houses too, they'd pledged as security for loans.

This was in the Wilmslow Express a few weeks ago. The Daily Mail ran with it too. Chocolate Shop guy in posh(ish)-Wilmslow, having to close, not making enough profit to survive with that shop, with rents and rates at £1,000pw. http://www.dailymail...rced-close.html

Similar angle on it here too (there's a claim further down that Gordon Brown stopped ever carrying money on him in 1991).

Edited by Venger

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I wouldn't be in a rush to pay 60% of the 2007 price for a shop in Bradford these days.

Nothing wrong with it. If you have a viable business that needs a high street presence.

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Surely that rent is too high. Or is the pawnbrokers the size of a Homebase store? :huh:

It does look high. But it would seem to be a substantial reduction on a historic (albeit bubble-time) rent, and since someone achieved it in the market I infer it's a market price.

Anyone have a graph of high street rents over the years?

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It does look high. But it would seem to be a substantial reduction on a historic (albeit bubble-time) rent, and since someone achieved it in the market I infer it's a market price.

Anyone have a graph of high street rents over the years?

1000sqft on a decent footfall pitch in a city centre has always probably been around £100k pa rent. In comparison same in a decent provincial market town would probably be £40-60k pa. Good secondary locations, of the same, would generally be available sub £40k pa.

In my business the rule of thumb would be to look for 10 x the annual rent in turnover. Pawn brokers *might* be doable at £65k pa as it's effectively a money lender more than a physical goods shifter. A lot of shops are getting towards worthless for anyone but solicitors or dentists' offices in locations where they can derive some benefit from the advertising effect to passing traffic.

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Maybe. In 1993 the banks swung the axe on massively over-stretched and luxuries-lover Serpico, with his com-props. Serpico who thought he deserved to stay at the top in his fancy mansion.*

(*Mansion bought by Serpico at the bottom of the previous crash in 1976, almost given away in fact.. suspicion it was taken by the authorities to recover former owner's debt .. no money around, or perhaps lower supply or demand for mortgage debt).

http://www.housepric...ndpost&p=444946

Bank valued the com-prop at at £225K as start of recession, £160K debt on it, accepted £40K for it. Trouble being the new owners, who bought the com-props for £40K, got carried away with expanding their business, before recession end, and the bank then took their houses too, they'd pledged as security for loans.

This was in the Wilmslow Express a few weeks ago. The Daily Mail ran with it too. Chocolate Shop guy in posh(ish)-Wilmslow, having to close, not making enough profit to survive with that shop, with rents and rates at £1,000pw. http://www.dailymail...rced-close.html

Similar angle on it here too (there's a claim further down that Gordon Brown stopped ever carrying money on him in 1991).

Banks will stretch forbearance to the absolute limit before repossessing commercial property. They can mitigate ongoing costs relating to the property by appointing a fixed charge receiver but even so all the evidence points to them wanting to do anything but repossess.

Interesting things going on in commercial property. Heard a tale the other week of how landlords are getting into dutch auctions for internet retail tenants. Some online retail companies even put their stock into the premises on shelving that's effectively a giant trolley and take dirt cheap, or zero cost, short-term deals and then wheel it all into the back of a truck and move on the next cheapest place. The property guy I was hearing this from was bemoaning the lack of engineering companies that used to have skilled staff locally and would be a safe assumption they'd be unlikely to move on. :lol: bless him.

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The property guy I was hearing this from was bemoaning the lack of engineering companies that used to have skilled staff locally and would be a safe assumption they'd be unlikely to move on. :lol: bless him.

Makes a sort of sense, providing the next temporary offer taken offers good security/faciliites for their stock ect.

Better to have more landlords offer rents that businesses can afford. Not be too greedy. Set rent against market conditions for the businesses. Now it's mostly either extremes of high rents what many landlords would like to charge (or need to against the bank debt they've taken on), or being forced to keep moving for next teaser rate.

High rents, for less than adequate facilities, are also beginning to annoy some of the Queen's Counsel.

QC slams Inner Temple over high rents as chambers bails to City

12 September 2013

London’s historic Inns of Court run the risk of pricing themselves out of the barrister market unless they slash their rents and improve services, a silk at a leading criminal set has warned as his set shifts to City offices.

Inner Temple chambers 6 King’s Bench Walk has moved within the last few days to refurbished offices near the City’s Cannon Street railway station. The chambers has bought offices in College Hill but is retaining the 6KBW branding.

“Rents at the inns are not set at a level that we expect for the standard of accommodation,” 6KBW College Hill’s Mark Dennis QC, a member of the chambers’ management committee, told The Lawyer. “They are much too expensive for what they offer.”

Dennis said he was convinced that his view was generally shared across the bar and he anticipated that other sets – especially those on tight budgets – would move away from the inns in the near future. “If the inns don’t adjust their position and address the problems being faced by sets doing publicly funded work, then there will be real difficulties,” he warned.

In full/more.. http://www.thelawyer.com/news/practice-areas/bar-news/qc-slams-inner-temple-over-high-rents-as-chambers-bails-to-city/3009403.article

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