Shop occupancy up, but cities still hard hit

The high street is coming back to life quicker than expected, according to a report published on Thursday by retail research group Locatus.

Between January and August 2021, the percentage of empty shops in the Netherlands fell from 7.5% to 7.2% − with a total of 600 new occupancies. Vacancy rates are now below pre-pandemic levels, with 7.4% of properties empty in March 2020.

Food stores have fared the best, with many increasing their turnover due to the restrictions on the catering industry. Furniture and DIY stores have also stayed strong (now at 6.3%). The report attributes this to the housing boom and working from home, with cancelled holidays leaving consumers with more money for renovations.

Last year, Locatus predicted a 10% vacancy rate for early 2022, anticipating a longer recession. But the recovery may be temporary, cautions the report, as many small business have depended on government subsidies to weather the crisis.

‘As soon as that support stops, any small setback … could be fatal for an entrepreneur, and many will still have to close down,’ wrote Gertjan Slob, author of the report.

For the Netherlands’ largest cities, where tourism is an important source of income, times are still tough. Rents remain high and vacancy rates continue to rise, with 8.3% of shops still empty.

Internet shopping is replacing physical retail, and despite vaccinations, shoppers are staying close to home, avoiding public transport and busy centres. ‘I don’t see this trend changing yet,’ added Slob. ‘The Netherlands’ big city centres will therefore face a major challenge in the coming period.’

For many properties, a change of use may be the only way forward. Some shopping centres, particularly in smaller towns, have survived by converting almost 5% of commercial units into residences or offices − a switch, says the report, which is unlikely to be reversed.

‘It is finally sinking in that retail units cannot be reinstated in all these empty properties,’ concluded Slob. ‘In addition to all the misery, corona sometimes brings something good.’