How high streets will be the victims of recession

The latest Midsummer Retail Report by Colliers International highlights e-tailing as one of the recession's "winners" with the increasing importance of the internet leading to a need for less retail space in the future.

It predicts that consumers will concentrate their expenditure in large regional cities, such as Leeds, and out-of-town shopping centres like Meadowhall, leaving vacant properties in smaller towns.

UK void rates rose from 10.7 per cent a year ago to 11.4 per cent, according to the report.

Pound shops and other value retailers have offered a solution for many desperate landlords in these towns, albeit with significant compromise in rental and lease length and with large incentives.

Greg Styles, head of retail development at Colliers International in Leeds, said: "Online shopping is growing much faster than the wider retail market as savvy shoppers look to save money against high street prices. It was up 15.1 per cent in 2009 compared with a fall of 0.4 per cent for retailing as a whole.

"Furthermore, online spending is predicted to grow a further 62 per cent in the next five years and by 2020, 1 in every 5 spent by British shoppers will be online. For some pitches in some secondary centres like Rotherham, this really will result in clicks taking over from bricks."

He added: "I believe that we will start to see a marked polarisation in the retail property market as a whole; with an increased demand for 'quality stock' in major towns, city centres and major regional shopping centres.

"We have found that retailers are finding it increasingly difficult to justify being represented in every town in the UK. This means that larger cities and towns like Leeds and the biggest shopping malls, like Meadowhall in Sheffield, which offer 'experience' and choice for the consumer and high volume trading potential, will continue to be viable. Whereas, in the smaller and weaker trading locations, like Dewsbury, high vacancy rates will persist."

Although retail rents decreased by 1.1 per cent in 2010 across Yorkshire and the Humber as a whole, the figure is still above the 1.5 per cent average decrease across the UK. However, areas such as Scunthorpe, Scarborough and York saw rents increase by 10 per cent, 6.7 per cent and 5.7 per cent respectively, while in Huddersfield, Keighley and Hull, retail rents decreased by 30 per cent, 16.7 per cent and 10 per cent respectively.

Leeds saw a slight increase in its retail rents with an increase of 3.8 per cent and Meadowhall still stays strong achieving the highest prime retail rents in the region at 400 per sq ft as it did in 2008 and 2009.

Colliers predicts that the general pressures on retailers and the changing nature of the retail market will cause an upsurge in supply in the years ahead from administrations, CVAs and portfolio rationalisation.

Coupled with generally weak levels of demand, this will result in a general fall in in-town rents in 2010 and a further increase in incentives, as landlords fight to secure the occupiers that are taking space.

However, Mr Styles said the supermarkets could regenerate struggling town centres in the future.

Looking to the future

The total shopping centre pipeline for the next four years has dropped by 85 per cent in the last two years, according to Colliers International Midsummer Retail Report.

Only 6.2m sq ft is projected, with only a few schemes predicted to start in the next two years.

Greg Styles, head of retail development at Colliers International, based in Leeds, said: "A handful of schemes across the country are currently under construction and, like Wakefield Trinity Walk, their genesis has sometimes been problematic."

Many developers predict an upward spike in openings during 2014.

Colliers predicts that meaningful levels of new openings will not begin until a year or two later.