Beyond austerity: the long-run outlook for high street shops

With the influence of supermarkets and internet retailing likely to grow, we think that a downward trend in real high street shop rents is possible over the long run, with real rents falling by 1% to 1.5%p.a. However, by contrast, if planning rules were changed to make it easier for obsolete shops to be converted to housing, this may be enough for real rents on the remaining shops to remain broadly flat. This would support investor interest and prevent the eyesore that is empty shops.