Available Out Of Town Retail Space At Lowest Level Since 2002

April 15, 2016

Lack of newly built retail and leisure parks is resulting in lack of available space for retailers

Unknown-1Retailers must rely on a ‘second-hand’ supply of units for their expansion plans

89 development schemes likely to proceed before the end of 2022 easing the squeeze

Research by Trevor Wood Associates gives detailed insight into the market

Expanding retailers have had to rely on a ‘second-hand’ supply of units on retail and leisure parks because of the low levels of new development, according to research by Trevor Wood Associates in “The Definitive Guide to Retail & Leisure Parks 2016” published on Thursday 14 April 2016.

This lack of new build has also meant that available space fell to 5.9 per cent, the lowest level since the end of 2002. Much of the vacant space became available to meet demand from retailers due to disposals, relocations and downsizing by established companies such as B & Q, Homebase and PC World. Also administration and CVAs with tenants like Brantano and Paul Simon freed up units allowing others to expand, although the failure rate reduced during 2015 and the first two months of 2016, lessening this source of available space.

As an encouraging counter-balance to the recent lack of new build, 89 development schemes are thought likely to proceed before the end of 2022, including 51 Retail Parks. This will significantly increase the amount of available space.

Trevor Wood, senior partner of Trevor Wood Associates, said: “We studied over 1,500 retail and leisure parks and major retail warehouse developments across the UK, with detailed historic information for every one of the 15,600 retail warehouse units in the country. The vacancy rate in mid-2013 was 10 per cent. This has now reduced sharply to half the level seen previously.”

The latest edition of the annual state of the market report revealed Cineworld, Frankie & Benny’s, McDonalds, Nando’s and Pizza Hut were the names most likely to be found on Leisure developments. Argos, Carpetright, Currys, Halfords, Next and Pets at Home, of the non-food tenants, were most often found on retail parks, shopping parks or retail and leisure parks.

B & Q occupied most floorspace, leading the Top 10 Retail Park Tenants ranking, despite decreasing its total area by five per cent. Currys was second with broadly the same space as 2014 and Homebase was third, even after its 11 per cent fall in floorspace.

Value retailer B & M continued the rapid expansion seen last year, with an impressive 23 per cent increase in square footage compared with 2014.

The increased presence of companies, such as B & M, that may be considered as ‘discount’ or ‘budget’ retailers was highlighted too in “Going Shopping 2016 – The Definitive Guide to Shopping Centres”, also published by Trevor Wood Associates. This trend for expansion is seen not only in the leading shopping centres but also on retail parks.

The lack of available space is demonstrated by the research which shows the total retail warehouse market grew marginally to 184.5m sq ft in 2015 from 181.3m sq ft in 2014. Likewise, floor space on Retail Parks grew to 116.0m sq ft in 2015 from 114.2m sq ft in 2014.

Reflecting recent market conditions, rents have remained similar to the previous year with a wide variation achieved on Retail Parks, ranging from £8 per sq ft to £105 per sq ft at Fosse Shopping Park in Leicester which led the Top 10 Retail Park Rents ranking. The majority of parks recorded peak rents below £22.50 per sq ft.

British Land is the largest owner and investor in retail rarks and retail warehousing and, most significantly, the leading investment manager of retail rarks for the eleventh consecutive year.

Leisure remained an important attraction, adding to the dwell time, benefiting neighbouring retailers and restaurants. Cinemas, bowling alleys and health & fitness centres were the most common choices. However, 47 parks have nightclubs, 93 incorporate a hotel and four have theatres.

Trevor Wood added: “The high level of occupancy of retail and leisure parks show the continuing demand for space. The anticipated development pipeline over the next few years will ease the squeeze on units, allowing greater choice for customers.”

The Definitive Guide to Retail & Leisure Parks 2016 contains 368 pages of information. It features reviews and detailed listings, not only of those schemes currently trading, but also those proposed to open by 2022.

The report is available to order from www.trevorwoodassociates.co.uk priced £575.

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