Commercial rents in the heart of Cardiff have dropped by 70 per cent in some cases, as the city centre fails to attract new retailers.
A landmark building formerly occupied by Habitat is one of the most high profile properties yet to be let. After the closure of the interior design store in 2011, property developer Calan Retail has failed to fill the unit, and has requested permission from the city council to change the retail space into a restaurant.
Empty prime retail properties in the Welsh capital have fallen from 9.7 per cent at the peak of the 2008 financial crisis, to 15.8 per cent in October of 2012. Numerous reasons have been suggested for the drop-off, including the poorly performing economy, changing shopping habits, and an excess of retail space in nearby St. David’s shopping centre, resulting from a recent expansion.
Rents in Queen Street have reduced by one third since 2007, with a large number of empty units, some of which have been vacant for three years.
Illustrating the fall in value of central Cardiff retail sites, sandwich firm Pret A Manger secured the rights to a unit at Captiol Centre for £70,000 a year; the previous occupant, clothes chain Oasis, had paid £224,000 – 68 per cent more.
Property consultants warn that over the top rents are scaring off would-be tenants, and that flexibility is required; a busy tenant paying a lower rate is better than an empty property.
While residential landlords are enjoying an unprecedented boom in demand for their properties, commercial landlords are coming up against significant challenges, as may be borne out by our commercial and landlords building insurance clients.