Ghosts of business past: Empty shop units for rent for £100,000
- Credit: Roche
Walk through Norwich city centre, King's Lynn or even Holt and where once there was life, there are now empty retail units. Who's picking up the tab? Caroline Culot reports.
Nothing symbolises the true economic effect of Covid more than the inside of the former Debenhams stores in Norwich and King's Lynn.
Peer through the entrance doors and the sad remnants of a once lively superstore stare back. Empty shelving where the Mac beauty counter once was, bare mannequins once adorned with the beachwear that greeted you as you walked in looking for a holiday must-have. Still some of the same signage and the escalators. But no people.
Empty retail units are fast becoming a more common sight; in Norwich alone, there is Debenhams, the huge old Primark/BHS unit as well as Argos and Top Shop. The Royal Arcade still cannot fill the huge former Jamie's Italian unit - vacated two years ago, before Covid even struck.
King's Lynn's got a gaping hole left by its Debenhams in 10-16, High Street and even the ever popular Holt is struggling to fill units in Appleyard and Feathers Yard as well as Bull Street.
It is not difficult to see why. The rents alone for some of these buildings are huge. The former Argos shop in St Stephen's is £105,000 a year to rent with service charges and rates on top.
It is going to take a very confident retailer in this climate to sign up. What it means is they have more negotiation power but investor landlords bought these properties in the first place because of the returns. So what you get is a stalemate; and the units stand empty.
But isn't the panacea to retail woes the 'mixed scheme,' fast becoming the saviour of the big stores when they go bust?
Put in residential above, retail below, job done. But is putting in dozens of new homes right in the middle of a retail hub with no parking and little infrastructure really the answer?
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And who is going to buy or rent them? Lots of professionals on bicycles? Or Airbnb customers, much more transient occupiers more interested in where the best coffee bar is rather than whether they put out the recycling bin correctly.
Do other retailers, who are managing to survive in the high street, actually want to be next door to new housing developments? What is the effect on their business of this?
Nick Dunn, a partner in commercial, Brown & Co, said: "There really are two trains of thought; one believes passionately that if you bring more life, more activity into the high street, in terms of residential or student accommodation, community use or leisure, that it has to be a good thing for the town or city centre.
"The foil to that is do the existing retailers see it as watering down and eroding the appeal of the high street?
"Everyone is trying really hard to repurpose, revitalise shops within centres - so you get a drop-in table tennis centre or an indoor skate park which is good on one level but if you're a jeweller, paying £90,000 a year, you may not want to be next to this.
"I picture in my mind pop-up shops, restaurants, all making the high street more vibrant but the harsh reality is that how long can that last when the landlords need to get £60,000 plus a year?
"If you own a centre or arcade and have retailers paying the going rate, it's really difficult to drop the rent for someone as your existing bedrock tenants will want a concession too."
It may be the way forward has to be landlords offering more flexible deals to tenants to fill units but softer deals mean shorter ones too. Landlords aren't prepared to commit long term to getting a lower rent and retailers aren't signing up like they used to for 10-15 years.
Guy Gowing, managing partner, Arnolds Keys, said: "There is going to be some short-term pain. Landlords have got to be realistic and more flexible. The problem with a landlord like Legal and General, which owns the Royal Arcade, is they are more worried about its asset value and worried that dropping rents will affect that.
"But years ago no one wanted to live in the city centre; now it is popular and I think retail and resi can survive side by side."
Right now, there's too much uncertainty it seems, a lack of retail confidence because of Covid and a hesitance from landlords to negotiate on price.
For now it's a papering over the cracks - but long term, it seems the high street is going to have to really change.
The ghosts of business past: Big units standing empty
Orford House, Orford Place, Norwich; formerly occupied by Debenhams. Offers 111,723sqft.
23-29 St Stephen's Street, Norwich; formerly occupied by the old Primark and before that, BHS. Offers 45,186sqft.
43-45 St Stephen's Street, Norwich; formerly Argos. Offers 8,863sqft. Available to rent for £105,000 a year plus service charge of £3,106 a year.
21-24, Royal Arcade; formerly Jamie's Italian. Offers 9,991sqft.
The Library, Guildhall; formerly a restaurant. Offers 5,482sqft. Available to rent for £60,000 a year.
21, Castle Street, Norwich; formerly Cath Kidston store. Offers 2,398sqft.
10-16, High Street, King's Lynn; formerly Debenhams. Offers 46,791sqft.