Value of retail property falls to slowest rate in nine years as vacancies and losses take their toll on landlords

Fresh evidence of the woes facing high street landlords and shopping centre owners emerged today, as new data showed that the value of retail property has fallen by its largest monthly amount in nearly a decade.

The value of retail property tumbled 1.9 per cent in November, marking the sector’s sharpest month-on-month drop since May 2009, according to new figures from real estate advisor CBRE.

The statistics underline the current challenges facing landlords and retail property owners, who have been hit by new vacancies and lower rents amid a flurry of closures and profit warnings from some of the UK's major department stores and high street brands.

Waning confidence across much of Britain’s retail sector has helped push the value of shopping centre and high street property down by 1.5 per cent and 1.6 per cent respectively in November.

A three per cent drop in the value of retail warehouse property during November has also driven the fall in the retail sector's capital values, which have dived 5.3 per cent since the start of the year.

Robin Honeyman, senior research analyst at CBRE UK, said: “Sharp falls for retail warehouses this month resulted in the first negative capital value growth at the ‘All Property’ level since the EU referendum. The three per cent decline in capital values over the last month brings the year-to-date fall for retail warehouses to 5.7 per cent, still some distance behind shopping centres where values have fallen 8.2 per cent in 2018 so far.”

The figures come on the same day as a new CBRE report warns of the “perfect storm” facing the UK’s retail industry, with factors such as rising labour costs and weaker consumer wage growth impacting on firms as much as competition from online rivals.

Major high street names such as John Lewis and M&S have unveiled store closures and major restructuring plans in recent months following the changing retail conditions that have hit profits and sales.

Concerns over the future of Britain's shopping centres have also come to light recently, with landlord Intu seeing its shares plummet by more than 40 per cent a fortnight ago after investors aborted a £2.8bn takeover bid.