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Retailer tactics that shone online and over the Christmas trading period

18 Jan 2019

Reports and insight into tactics that worked for retailers online and across the sales channels in the recent months with a particular focus on the Christmas period.
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Local shops supported by Welsh assembly members

18 Jan 2019

Assembly members were able to pledge their support for their local shops at the National Assembly for Wales.
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Can discounting have a negative impact?

14 Jan 2019

This year may mark the most brutal Christmas and New Year's for retailers ever.
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Future High Streets Fund

9 Jan 2019

The launch of Future High Streets Fund is there to modernise high streets and town centres.
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Decline in Boxing Day footfall

9 Jan 2019

The footfall numbers from Boxing Day have declined for the third consecutive year.
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UK not ready to go cashless yet

9 Jan 2019

The Access to Cash Review published a report suggesting that the UK is not ready to go cashless yet.
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Government plans to extend plastic bag charges

9 Jan 2019

The Government plans to extend the charge of plastic bags to small retailers by 2020, with plans to increase the charge from 5p to 10p.
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Making Tax Digital pilots and webinars available

8 Jan 2019

Making Tax Digital (MTD) is to come into effect on the 1st of April 2019, find out what you need to do and more helpful tips.

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APPCG meeting on latest updates from Manchester and London

7 Jan 2019

The APPCG hope you can join their next meeting on the latest updates from Manchester and London.
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20-70% correction in retail properties

18 Dec 2018

Fidelity is predicting a 20-70% correction in retail property as the sector gets de-rated due to rent cuts.
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20-70% correction in retail properties

Posted on in Business News, Cycles News

London skyline 

According to a report published by Fidelity International, UK retail properties could lose up to 70% in value due to rent cuts.

Fidelity said it anticipates that UK retail real estate values will fall by 20% to 70% depending upon the nature and quality of the assets.

This correction is driven in part by, a 10%-40% reduction in rent to make them sustainable and affordable and by, the change in risk profile of the underlying tenants and their future cash flows de-rating the sector equivalent to 10% to 30%.

Data in the report has revealed that from 2015 to October 2018, the value of unlisted UK retail sectors has fallen by 5%, whereas listed retailers during the period have experienced a 17% drop.

Fidelity said:

"Profitability among bricks-and-mortar retailers in the UK has shown a marked deterioration"

This can be reverted if rental costs fall by 10% to 40%. Of course, this would then lead to the significant de-rating for UK retail real estate by anything from 10% to 30%.

This correction would be the largest in UK retail rents and would lead to major repercussions for landlords.

"Retail real estate would transform from a defensive, premium asset class into one of the most volatile elements in any real estate portfolio".

Fidelity, taking the issue wider and globally, said that countries with, "high retail space per capita, weakening consumer spending growth or a structure change to GDP away from consumer-driven growth are at risk of market repricing; with France and Australia being two markets of particular concern".

According to Fidelity, rent is the only key cost, amongst wages and supply costs, that can be reduced.

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