Does a town with 5% of shops being vacant mean renting out a shop is a buyers market?

Raveboy

My local newspaper had an article recently mentioning that the town centre had 5% of its shop vacant. One business owns about about 6 vacant shops at the moment. the shops have been vacant for nearlly 6mths now.

if this is the case then that business has lots out on loads of rent payments because the shops have been vacant. i also think the are paying out £600 per yr on rates for a vacant premesis. not only is no one paying rent for the these properties it is also costing them a small fortune in rates.

Does this mean it is now a buyers market (meaning the people wanting to let out the shop are in the driving seat and can negotiate a lower rent?)

If the rent is £40,000 how much could I knock them down?

dmg24

You could argue that it is a lessee's market, or it is possible that the rent is set at a level that already reflects this.

Such a report would also indicate that there is a low demand for commercial premises in the area, which would imply that there has been a significant downturn in trade (perhaps there has been a nearby out of town retail area developed?).

a11waysindebt

I think it is all down to what you are selling.

Lets say you opened a sex shop in the area,as long as no one is selling the same items you have the market.

If you opened a small newsagents you might have problems competing with every one else.

There is a small town by me that had nearly 30% of the shops empty.Wilkinsons applied for planning and every one agreed that it would fetch business to the area.Of course it will to Wilkinsons,but now 45% of the shops are empty.

fc123

Raveboy wrote: »

My local newspaper had an article recently mentioning that the town centre had 5% of its shop vacant. One business owns about about 6 vacant shops at the moment. the shops have been vacant for nearlly 6mths now.

if this is the case then that business has lots out on loads of rent payments because the shops have been vacant. i also think the are paying out £600 per yr on rates for a vacant premesis. not only is no one paying rent for the these properties it is also costing them a small fortune in rates.

Does this mean it is now a buyers market (meaning the people wanting to let out the shop are in the driving seat and can negotiate a lower rent?)

If the rent is £40,000 how much could I knock them down?

If you are considering taking on a lease then I would be VERY cautious.

Some landlords keep properties empty on purpose as it means that their other properties are not "devalued" if one comes up to rent review.
It is the same as house sales. If there is a letting in a High St at a lower rent. then it sets the "value" of rents in the same area.

The least I would expect from a Landlord (considering market conditions in Jan 08) with other vacant units would be
1; 6 months rent free.
2; No premium payable for lease.
3; a lease of between 5 yrs and 10 WITH break clauses every 3rd yr.
4; rent review every 5 yrs. Try not have an upward only clause...but "market rent" only.......but these clauses are difficult to obtain.

My next Q would be...
1; are you already trading in retail at the mo? If answer is no, then pls post more details as I may be able to advise (in an anecdotal way) having been independent retailer in 2 prominent locatios for 2 decades.

I am fed up with novice retailers in our area being taken to the floor by commercial landlords...mainly because they didn't understand the complexities of lease laws and thought more lax laws on vacating domestic properties applied in a commercial situation.
They don't BTW.

Hope this is of some help.:D