Retail Space - Vacant Property Rises and Rents Start to Fall
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Vacant retail space is something that many owners, of commercial retail property, have had to get used to over the last few years. Reduced demand for retail premises has come courtesy of the sharpest recession in a generation, which has knocked out a wide array of retailers. For hard pressed owners, the question has become whether it would be best to consider a sale of retail space, instead of banging ones ahead against the wall of an empty shop.
As with the broader commercial property market, retail space prices have fluctuated dramatically over the last few years of boom and bust. The excess of retail space for rent, left after the sharp withdrawal of demand from the service-led recession, has pulled rents down fast. Real retail rents are some 10% off from their peak before the credit crisis.
And it does appear that the saturation of the market, in retail space, will continue- despite a lack of new capacity build. The respected latest quarterly report from Capital Economics, The Commercial Property Analyst, Q1 2010, has said that:
"In our view, over the next few quarters, occupier demand is unlikely to be strong enough to erode this overhang of space. Accordingly, we expect all-retail rental values to fall throughout 2010 and, albeit at a much slower pace, into 2011."
Of course retail space is pretty diverse, ranging from standard shops on the high street, to shopping centres up to large retail parks and warehouses; and the forecast does vary across those sub-sectors. The same report postulates that "retail warehouse rental values will decline by about 4% this year, a slightly smaller fall than in the shopping centre (5%) and standard shop (6%) sub-sectors, (with) further small declines across all the retail sub-sectors in 2011..."
So if you are struggling to let your retail space, the above forecasts seem to suggest that you will be in good company; the balance does seem to be shifting towards selling, rather than letting, your retail space. The advantages include the opportunity to release capital and to make better use of any gains made through your investment in the retail property market. It will also mean you can avoid the messiness of your bank pushing a foreclosure on your property loans, a scenario that may become more likely as the UK drifts towards its double dip recession (evidenced by reports in August 2010 of a rise in insolvencies and a fall in retail sales in the UK).
If you are serious about investigating the benefits of this solution, then call us at SellMyCommercialProperty- we can bring you a sale, without the hassle, by buying direct from you.
We are an investment company, with access to significant funds, and are keen to buy retail space of all types. Our funds are readily available, as we are not dependent on credit, so we can move fast with a purchase from you. SellMyCommercialProperty will pay you a fair price, as we do not charge you fees. The advantages of selling direct, without losing time to find a buyer, are obvious in today's market. So start the release of your monies that are sitting in your retail space today - and contact SellMyCommercialProperty.
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