UK Retail Sector Struggles Amid CVAs and Closures
- UK retail property values fell by 0.8% in June, the largest monthly drop since May 2012
- High street shops’ capital values dropped by 1.3% and shopping centres by 1.1% in June
- Q2 saw a 1.3% decrease in retail property capital values
- Retail rental values fell by 0.5% in Q2
- CVAs affecting retail sector performance
- House of Fraser, Calvetron Brands, New Look and Maplin among major retailers in administration or CVA
- UK commercial properties overall saw a 0.2% capital increase in June
- Industrial sector and office capital values rose by 1.7% and 0.3% respectively
The value of UK retail properties fell by 0.8% in June, marking the largest monthly drop since May 2012, according to CBRE’s Monthly UK Index. High street shops’ capital values dropped by 1.3%, while shopping centres saw a decrease of 1.1%. In Q2, retail property capital values fell by 1.3%, with shopping centres contributing to the decline with a 2.3% drop and other retail properties experiencing a 1.9% fall. Retail rental values also decreased by 0.5% in Q2. The recent spate of company voluntary agreements (CVAs) has impacted the sector’s performance, as House of Fraser, Calvetron Brands, New Look, and Maplin are among major retailers that have gone into administration or entered a CVA. Despite this, UK commercial properties overall saw a 0.2% capital increase in June, with both industrial and office sectors rising by 1.7% and 0.3%, respectively. Miles Gibson, head of UK research at CBRE, commented on the contrasting fortunes between the retail and industrial sectors: ‘June’s results throw a spotlight on the contrasting fortunes of two market sectors. The industrial sector continues to enjoy strong occupier and investor demand.’
Factuality Level: 10
Factuality Justification: The article provides accurate information from a reliable source (CBRE), presents relevant data and statistics, and offers an expert opinion on the situation in the retail sector. It does not include any sensationalism or personal perspective.
Noise Level: 3
Noise Justification: The article provides relevant information about the decline in UK retail property values and attributes it to specific factors such as company voluntary agreements (CVAs). It also includes data from CBRE’s Monthly UK Index and quotes an expert for context. However, it could benefit from more analysis or discussion of potential long-term trends or solutions.
Financial Relevance: Yes
Financial Markets Impacted: UK retail properties, high street shops, shopping centres, and other retail properties
Financial Rating Justification: The article discusses the decline in capital values of UK retail properties and its impact on companies such as House of Fraser, Calvetron Brands, New Look, and Maplin, which have gone into administration or entered a CVA. It also mentions the contrasting fortunes between the retail sector and the industrial and office sectors.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the last 48 hours.
www.retailsector.co.uk