Nick Tubbs, UK Managing Director at VPS – The Vacant Property Specialists, offers advice on how to mitigate the risks and protect retail property assets.
As the UK comes out of recession slowly, the number of empty buildings, particularly representing retail casualties, continues to rise. The value of many of these shops could plummet if they are left unattended and allowed to deteriorate. Vacant property presents serious issues and can lose significant value through environmental deterioration, criminal damage and the presence of vermin or squatters, causing wider impact on local communities. Optimists will champion the positive news that the British economy is continuing to grow and point to the instability and distress in foreign markets, highlighting the UK as a relative safe haven in a storm. Indeed, the latest report published last by PwC shows a decline in corporate insolvency numbers for the second consecutive quarter.
But UK GDP growth for the second quarter of 2011 was a rather sluggish 0.2 per cent, which has done little to endorse the government’s strategy for economic growth across the private sector. The overall picture for insolvency figures is worse than this time last year so it would seem the cuts are beginning to have a considerable effect on consumer spending. Retail has stood out as one of the sectors hardest hit, with over 3,500 retailers collapsing in the last two years between Q3 2009 and Q2 2011.
The impact on the high street and across our towns and cities is undeniable, with increasing numbers of retailers running into financial difficulties and shutting up shop. According to the Local Data Company the number of vacant shops has risen to 14.3 per cent with some towns seeing between a quarter and a third of shops lying empty. HomeForm, Habitat, Jane Norman and Edinburgh Woollen Mill are just some of the recent casualties, and IPD, the property research house, estimates that retail landlords have lost future rental payments worth nearly £400m as a result of the recent collapses. The situation was made worse by riots across the UK in August 2011 costing an estimated £100 million through stock loss and property damage during unprecedented violence across town centres that left many retail units damaged and requiring protection until insurance claims have been settled.
With this in mind many security professionals, retailers, landlords and property managers will be managing a significant amount of empty retail properties that need to be swiftly secured and will have incomplete insurance cover if they suddenly become unoccupied. To comply with health and safety, duty of care and building insurance requirements it is critical that the issues that surface when buildings become vacant are properly handled. VPS has acted for some of the world’s largest companies working with clients to quickly secure retail properties after companies have gone into administration or receivership. It is essential that these properties are able to be secured within 24 hours or less and a range of cost effective and innovative solutions can be employed for vacant retail property security and surveillance:
•Taking immediate action is the most effective way to protect a property and mitigate the risks associated with vacant retail properties and ensure that any assets inside a property are secured. You are required by law to inform your insurer immediately when a property becomes vacant. They may have specific requirements to ensure your building is properly covered.
•Undertake a comprehensive risk assessment using a specialist company to assess potential risks, such as fire hazards and public liability exposure as well as the exposure to damage from criminals and/or squatters.
•Isolate and shut down the power and gas supplies and drain down your water systems properly to avoid flooding. Clear the property making sure to remove any combustible material. Install a letter box seal to prevent arsonists setting fire to the property.
•Increasing costs of manned guarding and growing thefts has seen as increase in the development of alternative solutions, and growth of electronic security systems, which can be one-twelfth of the cost of manned security. Electronic security, such as one or more VPS SmartAlarm, can be rapidly deployed to provide instant security. Wireless sensors provide immediate detection and report on a range of incidents including intruders, flooding and fire. Entirely free-standing, they use wireless GSM mobile phone technology and a long life battery, so mains power or a phone line are not required. They can also include loudspeaker voice messages, a 120 decibel siren and CCTV video recording.
The most effective way to protect a vacant retail property and mitigate the risks is to take immediate action when a premises becomes vacant, rather than wait for an incident to happen. At VPS, we help to make vacant retail property safe and secure with a fast response, identifying cost effective integrated solutions for customers, using a combination of technology and manned services to ensure legal and insurance requirements are met. This enables administrators and receivers to control the financial cost of vacancy and ensure the property assets retain value and can be re-occupied quickly. Importantly it also reduces the negative impact of vacant property on local communities and helps make areas safer.
