Almost one in five shops are vacant in the North, according to a new study.
New research published by commercial property agency Lisney, says the percentage of vacant shops in Northern Ireland has increased on 2011 to 19%, far ahead of 11% in the Republic and the UK average 11.4%.
The study found that’unprecedented levels of retail administration and resulting store closures have had a major effect on this year’s figures’.
Another issue highlighted included the high level of business rates in prime locations, which ‘remains a major issue for retailers’.
Great Victoria -treet, Belfast. Belfast has an overall shop vacancy rate of 23.1%
Breakdown of towns
The study found that Belfast has ‘fared the worst’, with an overall vacancy rate of 23.1%, meaning that ‘almost one in four shops in Belfast is now vacant’.
Vacancy rates in Newry, County Down and Coleraine, County Derry have doubled in the year, from 9.7% to 20% and 11.2% to 21.2% respectively
Lisney’s research also found that Craigavon, County Armagh remains the town/city with the lowest vacancy rate, but its rate has ‘risen substantially from 3.6% to 9.1% in the year’.
The study also looked at office space and found that in Belfast, it is ‘declining further from an already low level’.
Headline rents in Belfast remain at £12 per sq ft, which ‘compares very favourably with other cities in the UK and Ireland’.
According to Lisney, the research indicates that take-up of space in Dublin is over ‘six times that of Belfast’ and occupiers intimate that they are opting for Dublin because of its more ‘competitive corporation tax rate’.
Lisney Managing Director, Declan Flynn said that in retail, business rates remain a ‘major issue’ because there is currently no link between rent paid by retailers and income generated by the retailer, a situation which Mr. Flynn calls ‘unsustainable’.
“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,” Mr. Flynn added.
“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 concluded.
The Northern Ireland Independent Retail Trade Association described the fact that Northern Ireland has nearly double the UK National average in relation to shop vacancies as ‘disturbing’.
NIIRTA Chief Executive Glyn Roberts said that the survey is another ‘wake up call’ that ‘urgent and joined up action’ needs to be taken by the Executive to reverse the decline in the town centres.
“Northern Ireland has not just the worst shop vacancy rate in the UK, but is now approaching double the UK national average,” said Mr. Roberts.
“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”
The Northern Ireland Independent Retail Trade Association’s 50 point plan
The Northern Ireland Independent Retail Trade Association had put forward a fifty point plan, said Mr. Roberts, to address the problem.
“Solutions such as Planning Policy which supports Town Centres, action to freeze car parking charges, extending the Small Business Rate Relief Scheme and bring forward proposals to establish local Enterprise Zones should be the top priority for the Executive,” concluded NIIRTA’s Chief Executive.
Vacancy Rates in Republic
In August, a study by GeoDirectory found that the number of vacant commercial buildings in the Republic stood at 11 per cent.
Dublin had the largest number of vacant units with 5,851 currently not being used, equivalent to a 12 per cent vacancy rate for the capital.
A total of 8 counties – Carlow, Donegal, Dublin, Galway, Leitrim, Mayo, Roscommon and Sligo – recorded commercial vacancy rates above the national average of 11 per cent.
The research showed that Galway had the largest number of commercial premises vacant for a city at 818, 13 per cent of total stock.
Sammy Wilson: Not Just a Rates Issue
Speaking to the BBC on Tuesday, when Lisney’s research was released, Stormont Finance Sammy Wilson said that the problem of retail vacancy was ‘not just a rates issue’.
He said the more people were shopping online and traders had to do their part in ‘increasing footfall’.
He mentioned Ballymena, County Antrim have one Thursday in November of discounts.
Case Study: Ballymena
Ballymena is a case in point. With huge retail parks outside the town centre with Tesco, Sainbury’s, Curry’s, B&Q offering free parking, the town itself has died dramatically.
Ballymena was famous for its outside markets, haberdashery shops, family-owned department stores, hardware shops, greengrocers and drapers. With the exception of a few, most are long since gone.