Growing retail unit demand

The challenges to bricks and mortar retailing on our high streets have been well documented over recent years.

The situation has been exacerbated by the current pandemic through declining footfalls, forced closures and the resultant increase in online shopping which has accelerated through the months since lockdown last March.

Many high street businesses have arranged restructures – including entering into Company Voluntary Arrangements – with creditors to survive, while others have been forced to enter administration. Unfortunately, there is no doubt there will be more casualties ahead.

However, district centres, which serve surrounding residential neighbourhoods and tend to be occupied by independent and regional retailers and service providers, are proving more resilient.

Occupier demand for suitable properties in such locations has improved.

Factors behind this include the large swathes of the population now working from home who are paying more visits to their local centres.

These centres may also see long-term benefits from the shift to support local businesses during the pandemic, and continued home working or the likely mix of home and office working when some form of normality returns.

By way of examples, we marketed two well-located compact retail shops when the property market was permitted to reopen in June.

One was in the Sinderins district centre serving Dundee’s West End and the other in Broughty Ferry. Both shops attracted strong tenant demand.

They were let after short marketing periods culminating in closing dates where multiple offers were received, and in both cases proposals were received in excess of the asking rents.

These units do have an advantage over city centre peers which tend to be more expensive and come with higher overheads including non-domestic rates liabilities, whereas the cases referred to previously have rateable values below the £15,000 threshold for Small Business Bonus Relief and qualifying occupants obtain rates relief at 100%.

This sub-sector of the retail market is showing resilience and well-located retail property is attracting good levels of occupier demand.

District shopping centres such as Broughty Ferry are proving popular.