Alarm over 200 shopping malls which could go bust
MORE than 200 shopping centres risk going bust, with a “catastrophic” impact on local areas, experts warned yesterday.
Malls across Britain worth £7billion are in danger of going into administration amid a wave of store closures.
Areas most at risk are believed to include ageing shopping centres in smaller towns. Many of the sites are owned by overseas private equity firms.
The centres face a worrying future with many falling into a downward spiral.
“Anchor tenants” such as Debenhams have announced 50 closures, with further cuts feared at House of Fraser.
The demise of BHS and ToysRUs has also had a knock-on effect.
Owners have been hammered by a toxic combination of soaring costs and competition from online rivals such as Amazon. A report from APAM, an asset management firm, said the 200 malls at most risk needed to raise fresh finance to fund “much-needed redevelopment”.
Nelson Blackley, of Nottingham Business School, said: “If centres close, particularly in small towns, it will be catastrophic. If a major anchor store moves out, that has a halo effect on other stores in that centre. It’s a downward spiral – you can’t fill shopping centres with nail bars and vape shops.”
Mr Blackley cited the example of Nottingham’s Broadmarsh Centre, where the BHS store still lies empty.
The fear is that the UK goes the way of the US, where mass store closures have led to “ghost malls”. While the centres most at risk are believed to be on high streets, out-of-town malls are also struggling. Last week industry giant Intu, which runs Manchester’s Trafford Centre and Arndale malls with Lakeside in Essex, cut the value of its estate by a further £300million.
The firm, which has 17 centres, responded by earmarking excess land for 5,000 homes. In July, rival Hammerson put its out-of-town retail parks for sale.
Meanwhile, supermarkets with massive stores are trying to get other retailers to rent space. Experts say out-of-town shops will have to be converted to other uses. Online firms could turn some into warehouses to speed up deliveries.
The Budget has proposed changes to make it easier to convert empty shops into homes and offices.