More than 23,000 shops and 175,000 jobs will be lost from UK high streets in 2019, new research has warned.
The figures, forecast by real estate adviser Altus Group, would make this year worse for bricks-and-mortar businesses than 2018, when almost 20,000 stores shuttered and 150,000 jobs were lost.
Altus Group predicted that such are the challenges facing physical stores, the overall value of retail property will slump by as much as 15.9% this year as consumers continue to switch to online shopping and seek experiential spending.
The stark warning came as the Royal Institution for Chartered Surveyors (RICS) took the rare step of instructing valuers to be “aware of the potential for significant changes in value” of retail properties.
The alert could have a huge impact on property giants including Hammerson and Intu, the shopping centre owners that are both listed on the London Stock Exchange.
The RICS said “structural change” in retail “might not yet be reflected, or easily identified, in recent market activity”. Valuers have been urged to take account of “analysis and commentary” as well as deal prices.
Last week, The Postings shopping centre in Kirkcaldy, Fife was put up for sale with a reserve price of just £1.
According to Altus Group’s annual Commercial Real Estate (CRE) Innovation Report, 62% of major property owners in the UK said ecommerce businesses such as Amazon were having a “profound effect” on their decision-making.
Some 78% said the demand for ‘experiential’ retailing was impacting investment decisions and driving the need to repurpose space.
Altus Group managing director Guillaume Fiastre said: “Retail of the future will use bricks-and-mortar spaces in a very different way, mixed in with leisure and lifestyle residential spaces, for example.
“The most successful retailers – the survivors – are learning to draw in their customers with the promise of a personalised experience. Technology makes that all possible, but it still needs a strong human element.
“The growth of online retailing, which had been seen as a difficult trend for property, is one property owners and investors can now take advantage of to drive revenue.”