Plans to auction off empty Union Street shops to the highest bidder could have a “very positive impact” on the future of Aberdeen city centre according to one property expert.
Rent auctions for empty premises is one of 27 measures being considered by Aberdeen City Council (ACC) in response to the growing number of disused units on the Granite Mile.
The Empty Shops Action Plan lays bare the scale of the challenge with 111 of the street’s shops and offices – almost a quarter – currently lying mothballed.
DM Hall partner Stuart Johnston said he was “encouraged” to see the city council focusing on measures to try and solve the problem.
He said: “In isolation, some of the suggested measures are likely to have limited success but if ACC can link together and package these measures with the support of other major city centre stakeholders including Aberdeen Inspired and Aberdeen and Grampian Chamber of Commerce (AGCC), I think what is being suggested could have a very positive impact.”
Councillors will meet next Wednesday to discuss options for the street which also includes a £1million regeneration fund, partly backed by the council with £500,000, to help reconfigure vacant shops “to the size that both consumers and businesses require”.
It also proposes the provision of arcade space for entrepreneurs that want to pilot retail ventures – paying a peppercorn rent for a year before progressing to new space.
Rent auctions
Under the rent auction proposal, the council could designate areas that are important to the local economy and have the power to hold the process for any shop that has been empty for more than one year.
Under the auction the landlord of the property would be obliged to accept a bid from a prospective tenant forcing the empty shop to be brought back into use.
However, the Scottish Government has indicated that a change in the law may be required to make this happen.
Signs of recovery?
The city council report highlighted that the increase in empty shops is prevalent in city centres across the UK, with vacancy rates exacerbated by the effects of the pandemic and are now being compounded by rising energy costs facing businesses as well as the rising cost of living impacting on consumer spend.
Nevertheless, the report highlighted that footfall – the number of people visiting the high street – has shown a recovery.
City centre footfall in Aberdeen recorded its highest monthly footfall reaching over 2 million in September 2022 for the first time since February 2020.
On Union Street, footfall was in excess of 600,000.
The report noted that while this still wasn’t at pre-pandemic levels, the city is performing relatively better than the Scottish and UK baseline.
The improvement has led to an uptick in sales – with “in person” sales now almost reaching pre-pandemic levels.
However, the report added Aberdeen “may now have an oversupply of retail units and shopping centres” and that the plan would aim to “reduce the retail footprint of Union Street through repurposing of units”.
‘Time for radical thinking’
AGCC policy director Ryan Crighton said: “It is a time for radical thinking about how we repopulate Union Street and we look forward to working with the council administration, officers, and other partners to bring forward fresh ideas to help the city centre flourish.”
He added: “It would appear that rent auctions would require legislative changes, so this will ultimately be a decision for the Scottish Government.”
Union Street transformation
Forecasters predict a refreshed city centre could bring a near £5 million a year economic boost.
If given the go-ahead work could begin in August and the search for a company to transform Union Street will begin.
If the business case is approved next week, council bosses will look to contract firms to design and put in place the huge change.
Mixed bag for city centre business rates
The scale of the challenges facing Union street was recently highlighted in changes to taxes on business owners expected in the upcoming business rates revaluation.
The Marks & Spencer in the Bon Accord shopping centre is among Granite City properties expecting a big fall in their rates bills next year.
Hopes are this reduction could factor into the retail chain’s deliberations as it considers where the axe may fall in an ongoing store closure program.
However, others aren’t so lucky with one bar and restaurant facing a more than three-fold increase in business rates from April next year.
ACC’s Empty Shops Action Plan said it would pilot a “retention” of any rise in business rates from April which would be pooled for city centre investment.