Retail vacancy increasing as shops buckle under Covid debts, increased costs
Retail vacancy is increasing in the Netherlands’ 40 largest city centers. In the first quarter, 2,500 stores stood empty, 8.3 percent of the total. Many have been empty for over a year, according to a report by Colliers. Shops are buckling under rising costs and coronavirus debts that are coming due, the real estate adviser said.
“This leads to bankruptcies or closure of some of the stores,” Bart van der Meer of Colliers said. “In addition, online shopping makes it unnecessary to have a sales point on every corner. Brands more often opt for one large showroom in the city’s main shopping street.”
The large Dutch cities are doing better than the smaller ones, with an average retail vacancy rate of 6.1 percent. Rotterdam is a negative outlier, with a 10 percent vacancy rate. In smaller cities, with between 70,000 and 100,000 residents, one in ten shops is now standing empty.
Retail’s share in inner-city shopping has been declining for years, and that trend is continuing, Colliers said. Over 100 clothing stores disappeared last year, and more than a thousand in the past decade, for example. But there has been an increase in thrift stores and repair shops for electronic devices. “This seems to show an eye for sustainability.”
Over half of the retail space now consists of catering, services, or culture and relaxation businesses. “It is mainly the fast food businesses that are growing rapidly in number,” Colliers said. Rotterdam saw 34 new fast-food restaurants open last year, an increase of 60 percent.
There are also more and more personal care businesses opening. Last year, the Netherlands got 39 new tattoo and piercing shops, for example. “Nail studios, beauty salons, and hairdressers are also increasingly visible.”
According to Colliers, Netherlands residents are becoming increasingly critical of retail vacancy as the housing shortage rises and the Netherlands’ scarce space runs out. The government needs to more actively drive transformations with flexible zoning plans and targeted investments, the real estate adviser said.
“City centers must become more compact with a rich mix of functions,” Van der Meer said. “Not just shopping, but more living, working, services, catering, and culture.” Everyone benefits from that, he said.
The real estate advisor mentioned several city centers where this is already happening. Leeuwarden and Eindhoven are successfully combating retail vacancy by not allowing the construction of new stores but making conversions easier, for example. “Things are also going in the right direction in Ede and Almelo.”
