US mall vacancies reached 8.6 per cent in the second quarter of this year, their highest level since 2012.
And real-estate research company Reis, which monitors vacancy rates in shopping centres and strip malls across the US, says the rate will only rise later this year, as Toys R Us stores close down and other planned store rationalisations occur. Reis says the highest vacancy rate since the recession was 9.4 per cent in the third quarter of 2011.
What makes the latest quarter’s figure shocking is that the US economy is currently in one of its strongest growth periods in decades with low unemployment and solid consumer spending. There is no economic downturn which has led to previous periods when US mall vacancies rose.
Reis says strip malls are the hardest hit, with 10.2 per cent vacancy rate, or about 3.8 million sqft of empty space.
Retail Dive in the US says the over construction of stores leading up to the financial recession is “coming back to haunt landlords”.
“There is roughly 24sqft of retail space per person in the US, a figure notably higher than the 16sqft per person in Canada, the 11sqft per person in Australia and 5sqft per person in the UK,” the site recorded, sourcing a Morningstar Credit Ratings report last year.
Coresight Research reports that so far this year some 4095 store closure announcements have been made by retailers and just 1884 openings. In contrast, in the UK, there have been 631 store closure announcements and 616 openings.