New data has found that more than 200 of the UK’s shopping centres are teetering on the brink of administration unless they find fresh funding.
In a BBC report, analyst Nelson Blackley from the National Retail Research Knowledge Exchange Centre told of the demise of “major anchor stores” such as BHS and Toys R Us, and the rise of online retail had caused a “downward spiral”.
“We have too many of them, doing exactly the same – the same range of stores and products – and basically that’s not attractive,” said Blackley. “The collapse of BHS, two years ago, left empty units in around 200 shopping centres and more than half of those large, empty units have not yet been filled.
“If the major anchor store moves out, that has a halo effect on other stores in that centre. It’s a downward spiral and you can’t fill shopping centres with nail bars and vape shops.”
“It’s a downward spiral and you can’t fill shopping centres with nail bars and vape shops.”
Nelson Blackley from the National Retail Research Knowledge Exchange Centre
The majority of the centres at risk are reportedly owned by US private equity firms under deals which will soon require refinancing. “They have to return money to their investors, but that’s not looking very likely,” commented Blackley. “Frankly, the centres are either going to have to be sold at a lower price or have capital injected in order to regenerate, and we don’t see banks having an appetite for that.”
Blackley pointed out that the growth of online retail in the UK had been faster than in almost any other retail market in the world and that is now threatening traditional retail stores. He also noted that according to research from the Financial Times about £2.5bn worth of shopping centres and retail parks are up for sale in towns across the UK.