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Retailers react to disposable vape ban.

5 Feb 2024

The retail sector has been responding to government plans to ban disposable vapes as part of plans to tackle the rise in youth vaping.
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UK’s indie food retailers to be recognised in the Farm Shop and Deli Retailer Awards 2024.

23 Jan 2024

Bakers, butchers, cheesemongers, delicatessens, fishmongers, greengrocers, village stores and small farm shops from around the UK have been shortlisted in the Farm Shop and Deli Retailer Awards... Read more…

How Independent Retailers Can Stand Out in A Crowded Market

23 Jan 2024

An interesting article has appeared in Forbes reflecting many of the issues that Indie Retail & ActSmart members will be experiencing – the challenges and... Read more…

Eight in Ten Small Businesses Taking Positive Steps to Strengthen Their Enterprises in 2024

22 Jan 2024

Eight in ten small business owners (81%) are planning to develop their companies in 2024, according to new research from Novuna Business Finance. The research shows that over a third (33%) are... Read more…

The Times names 12 of the UK’s best independent bookshops — as chosen by its readers.

22 Jan 2024

The Times has named 12 of the UK’s best independent bookshops — as chosen by its readers. Readers highlighted places that combined books with a friendly and welcoming atmosphere.... Read more…

Bira Launches Second Annual Campaign for Valentine's Day - #LoveYourHighStreet

22 Jan 2024

The British Independent Retailers Association is championing the high street again this Valentine's Day for the second consecutive year with its #LoveYourHighStreet campaign.
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Family-run shop in Lanarkshire village scoops community retailer award for second year running.

10 Jan 2024

Nads Store, a family-run shop in Law, Lanarkshire, has been named Community Retailer of the Year at the Scottish Asian and Business Awards ceremony for the second year running.
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Bira urges vigilance against loan fee fraud following FCA guidance.

10 Jan 2024

In the face of the escalating threat of loan fee fraud, the British Independent Retailers Association (Bira) is urging its members to heed the Financial Conduct Authority's (FCA) recent guidance... Read more…

Canal boat record store Rubber Ducky Records is back afloat.

9 Jan 2024

Canal boat record store Rubber Ducky Records is back on the water after it sank last April, ruining over 1,000 vinyl records and a stow of music equipment stored on... Read more…

New research shows UK retail sector powered by entrepreneurs and start-ups

9 Jan 2024

While mass-market players continue to dominate the UK retail industry, research by Geek Retreat shows that 15% of Brits have set up their own business in the past ten years, and of these,... Read more…

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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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