High StreetProperty

Store closures lead to slump in demand for retail space

New research has found that 70% of chartered surveyors in London saw a notable slump in demand for retail space over the last quarter, in light of recent closures by Poundworld and M&S.

The research by the Royal Institution of Chartered Surveyors (RICS) said that demand for retail space is currently, its lowest since 2008. RICS figures showed that 46% of chartered surveyors, surveyed said they had seen an increase in retail vacancies.

Over a third of those surveyed said they saw an increase in the use of Company Voluntary Agreements (CVAs), with over two thirds adding they predict more retailers will insert CVA clauses into contracts moving forwards.

Simon Rubinsohn, RICS chief economist, said: “The challenges being faced by retail not surprisingly come through strongly in the latest set of results, but the counterpoint to this is the ongoing strength of demand for good quality, well located industrial/logistic sites. Indeed, the lack of availability of stock in the industrial segment of the market and the generally sluggish development pipeline, is pointing towards further healthy gains in pricing.”

Despite the slump in retail space, RICS said that demand for industrial space had continued to rise, having done so for the previous 23 quarters.

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