Posted on Tuesday 25 September 2012 by Ulster Business
Declan Flynn believes the problem will get worse if nothing is done
Underscoring the problems facing the local retail sector and the economy in general, the ‘state of the property sector’ report analysed retail vacancy rates in towns and cities across Northern Ireland and compared them to last year, as well as the UK average.
The percentage of vacant shops in Northern Ireland stood at 19%, up from 14.4% in 2011, which further widened the gap with the UK average of 11.4%, said Lisney.
Belfast has fared the worst, with an overall vacancy rate of 23.1%, while vacancy rates in Newry and Coleraine doubled over the year, from 9.7% to 20% and 11.2% to 21.2% respectively.
Craigavon remains the town with the lowest vacancy rate, but the report showed its rate has risen substantially from 3.6% to 9.1% in the year.
Lisney noted the unprecedented levels of retail administration and resulting store closures had a major effect on the figures. In the last year a number of high profile retailers have gone into administration, including Game, Peacocks, La Senza, Past Times, Clinton Cards, Fultons and - confirmed this morning - JJB.
The property firm said that the high level of business rates in prime locations remains a major issue for retailers.
Commenting on the research, Lisney Managing Director, Declan Flynn, said: “In retail, business rates remain a major issue. We have a situation where the level of business rates levied on shops is completely decoupled from the commercial realities of rents and the trading performance of the retailer. This is unsustainable and will continue to be a significant factor in administrations and rising vacancies, unless addressed.”
“We still haven’t seen a decision on a reduction in corporation tax. Designating Northern Ireland as an Enterprise Zone is another potential option to boost the economy and help make us more competitive. In the areas of GB in which Enterprise Zones exist, they provide a streamlined planning system, tax incentives and business rates relief.
“What is clear is that if nothing is done, the issues identified in this research will become even more acute, and Northern Ireland will continue to lose major potential occupiers to the Republic of Ireland other locations,” he added.
The Northern Ireland Independent Retail Trade Association described the report as disturbing.
NIIRTA Chief Executive Glyn Roberts said: “This survey is yet another wake up call that urgent and joined up action needs to be taken by the Executive to reverse the decline in our town centres. Northern Ireland has not just the worst shop vacancy rate in the UK, but is now approaching double the UK national average.
“The survey paints a stark picture and we believe that we are approaching a trend of one in three shops being empty by this time next year. This figure is sadly highlighted by the bad news of JJB Sports entering into administration.”
Lisney also researched vacancy levels and activity in the office and industrial sectors, and activity in the property investment market.
It said that the availability in Belfast of Grade A office space, which is essential to attract quality foreign direct investment, is declining further from an already low level.
It highlighted that there is currently no development of Grade A office space in the pipe-line. Take-up of space in Dublin is over six times that of Belfast and occupiers indicate that they are opting for Dublin because of its more competitive corporation tax rate, said Lisney.
Vacancy rates at industrial property locations now stand at 16%, which is in line with the UK average. Mallusk has the highest vacancy rate at 24%.