This slow decline of the high has accelerated over the last month, with Jessops, HMV and now video rental chain Blockbuster all falling into administration.
Stories of mismanagement, failures in foresight and an inability to change with the times are all cited as reasons for the collapse of these famous brands, but in the end, it’s just an inevitable sign of the times.
Should these companies fail to recover, what will happen to the buildings they have occupied?
While prime locations, such as HMV’s flagship store on London’s Oxford Street, will no doubt be snapped up immediately for continued retail use, many empty stores in less desirable locations will likely be left unoccupied as the retail sector continues to struggle.
There is a very real opportunity, however, for these outlets to be reappropriated for other commercial uses. If a gap exists in the local market, for say, a restaurant, it’s worth looking at buying up an empty retail outlet for conversion. Locations are often ideal, as even through economic turbulence high streets have enormous footfall.
There are many factors to consider before embarking on a project like this, however. A major refit, requiring planning permission, will almost certainly need to be undertaken. It may be a long, expensive and arduous process, but the return may make it worthwhile.ll. While cash may not be going through the tills in the surrounding shops, even browsers need to eat.
Figures released by Fleurets this week show that this is exactly what is happening in another struggling sector, the pub trade.
The report states that 48% of bottom end freehold* pub sales were made for alternative uses, most commonly for residential purposes (54%), retail and restaurant (each 14%).
While the total number of bottom end freehold pubs sold for alternative uses over the course of 2012 was down year-on-year from 2011 (54%) and 2010 (50%), the average sale price of pubs for non-pub use was significantly higher than in sales for continued pub use.
In 2012, there was a 16% differential between the average sale price for non-pub use and continued pub use nationally, in 2011 sale prices for pub use and non-pub use were relatively similar.
Fleurets make the very interesting point that this suggests that the wider property market is seeing greater increases in value than the pub property market.
Could the same save the high street?
*Bottom end freehold sales are broadly defined as properties sold without accounts, sometimes closed or vandalised or if operational, under temporary tenancy/management arrangement. These are primarily pub company sales but also include administration sales and occasional private sales. Invariably they reflect some degree of forced sale situation.
Take a look at the report here