Shop rents have fallen by up to a startling 70% in parts of Cardiff city centre as landlords struggle to attract retailers to the Welsh capital, property experts have told the council.
The number of empty shops in Cardiff increased from 9.7% in October 2008 – when the financial crisis came to head with the collapse of Lehmann Brothers – to 15.8% last October.
The recession and changing shopping habits, exacerbated by an over oversupply of space caused by the St David’s shopping centre expansion, have been blamed.
The revealing figures were presented to Cardiff council planners by property firm Calan Retail, which has been searching for tenants for the empty Habitiat unit on The Hayes.
The interior design chain closed its Cardiff store in August 2011 and the landmark building, the sole surviving pre-war building on the eastern side of The Hayes, has remained vacant since.
Calan Retail, which has been marketing the property since November, has now applied for permission for a change of use for the ground and upper floors to a restaurant and/or cafes.
In making a case for planning permission, Calan’s Andy Sturrock says the retail market has undergone a “seismic change” over the past six years.
Shop rents on Queen Street have fallen by a third since 2007, with an “unprecedented” number of vacant units available, some of which have been empty for more than three years.
One example given is a unit at Capitol Centre, which sandwich shop Pret a Manger acquired last year for £70,000 per annum, compared with the £224,000 previously paid by fashion chain Oasis – a drop of 68%.
Despite a widespread marketing campaign to fill the Habitat building, demand for the property was described as being “almost non-existent”.
Retailers already in the UK were approached, including American Apparel, Abercrombie and Fitch, Esprit, Forever 21, Uniglo and Tommy Hilfiger.
“Their feedback was consistent in that at present, Cardiff and specifically [9 to 11] The Hayes, is not a location they would consider at present,” Calan’s planning document states.
Attention switched to the A3 food and drink market and there has already interest from national operators – some of whom were described as “world-renowned names”.
Matthew Morgan, partner at commercial property consultants EJ Hales, said “way over the top” business rates are the biggest concern for potential occupiers.
Landlords were having to be “flexible” by offering leases with short-term breaks after one, two or three years, Mr Morgan said.
“Landlords have realised that rather than having someone in there who is struggling to pay rent each month, it’s better to be more flexible and allow for a higher turnover,” he said.
“Landlords also understand that certain uses, such as restaurants and cafes, allow for more ‘dwell time’. It’s perfect because it draws people in and hopefully the neighbouring shops will benefit from that.”