Monday, June 27, 2022

News: How to deal with empty buildings in Rotherham town centre


According to research, around 5% of empty units on the nation's High Streets are persistently vacant, meaning they have been shuttered up for more than three years – a record high. In Rotherham, this figure jumps to 18%.

Could a radical idea to force landlords to temporarily bring shops back into use help?

An estimated 14.4% of high street units in the UK are currently vacant. The latest figure for Rotherham (2021) is 31%.

UK think tank, Power to Change used the figures from the Local Data Company in their report on giving local communities greater power and ownership to regenerate their town centres.

The data showed that Rotherham's persistent vacancy rate (3+ years) was the highest shown in the study, at 18.1% in 2022. Up from 12% in 2015.

New reports have the twenty-year exodus of retailers from town centres and the COVID pandemic as a key reasons for record vacancies but also evidence that it is often down to who owns the properties.

For example, UK think tank Onward highlight that High Street units owned by investment management schemes have a vacancy rate (13%) that is ten times as high as the vacancy rate for shops owned by private individuals (1.3%). Real estate and property companies account for 25% of vacant units, while overseas investors account for 21%.

It has become easy for large financial institutions and investment schemes to sit on High Street properties, unconcerned whether they are empty or let.

In its new Levelling Up and Regeneration Bill, the Government has started to address this issue with the idea of “compulsory rent auctions” (CRAs). This is described as "a deceptively simple but radical idea," under which local authorities would be given a power to require landlords of high street units empty for more than 12 months to hold a public rent auction, where prospective tenants offer bids for the maximum level of rent they are prepared to pay on a fixed term lease.

The landlord would be legally required to let the unit to one of the bids and if they refuse then the local authority would have the power to hold an auction and lease the property in absentia.

The Onward report sees this as a needed intervention to reduce vacancies, tackle absentee landlords, increase housing supply and aid innovation on the High Street.

The report concludes: "The high street is not just a centre for local commerce, it is a symbol of the health of a place. People notice when their high street deteriorates, when shops go unfilled and when footfall declines. The impact of successive events - the arrival of out-of-town shopping, the growth of internet shopping, and most recently the pandemic - has ripped the heart out of many town centres, and the market has not responded accordingly. Nothing we have tried to date has worked, so it is time for trying something new.

"Compulsory rent auctions are a radical idea to force landlords to temporarily bring shops back into use at a price determined by the market. Just as local authorities can issue improvement notices on properties which represent a hazard, a compulsory rent auction allows councils to tackle the negative externalities of vacancy on the wider community. The interference with landlord rights is minimal: the only restriction is on their ability to maintain an empty property.

"If ministers get this right, such a policy could give local authorities an invaluable tool to tackle long-term vacancy and lead to creative uses of the high street."

In Rotherham, some long term vacant units have been as a result of regeneration schemes. The Riverside precinct and the former Primark unit were purchased by the council to be demolished to make way for new projects.

The burnt out buildings on Corporation Street are perhaps the most visible reminder of the worst kind.

On the key route through town, the former Envy nightclub building, which suffered a malicious fire in 2007, and Muskaan restaurant, which was closed after a fire in 2011, have been left empty ever since, and whilst not structurally unsafe, the buildings are widely acknowledged to be an eyesore.

Negotiations with the absentee owners appear to have failed over the purchase of 3-7 Corporation Street so Council officers are hoping to gain Cabinet approval in the summer for the compulsory acquisition of the properties.

Images: Google Maps / HRH Retail


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