Expanding retailers have had to rely on a ‘second-hand’ supply of units on retail and leisure parks across the UK because of the low levels of new development, according to research by Trevor Wood Associates in “The Definitive Guide to Retail & Leisure Parks 2016”.
The latest edition of the annual state of the market report revealed that, in the West Midlands, just 5.6 per cent of retail warehousing space was vacant at the end of 2015. This is the same level as East Midlands showing a similar picture across the middle of England. The West Midlands figure is the result of an ongoing downward trend every six months since the second half of 2012, and is a long way from the heights of 11.5 per cent seen in 2009. The most recent level puts the area in sixth equal position out of 11 UK regions.
The national and regional research findings were unveiled recently to local property experts at a presentation in Birmingham, hosted by Bilfinger GVA. 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. In the West Midlands, we looked at every site including 91 Retail Parks and 29 major retail warehousing developments.”
Nationally, much of the vacant space became available due to disposals, relocations and downsizing by established companies such as B & Q, Homebase and PC World. Also administrations and Company Voluntary Arrangements (CVAs) with financially struggling tenants 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.
Each year, national rankings compiled by Trevor Wood Associates are treated as league tables for the sector and studied closely by the property industry. They highlight the relative size of schemes allowing easy comparisons to be made.
In the West Midlands, Star City in Nechells, Birmingham achieved ninth position in the top Leisure Schemes listing.
The highest ranked Shopping Park was The Fort Shopping Park in Birmingham at number 12. For Retail Parks, Merry Hill Retail Park in Brierley Hill is included at number 15. Festival Way in Hanley, Stoke-on-Trent was the highest ranked Retail Warehouse Cluster in the West Midlands at position 16. Finally, in the Retail & Leisure Parks list, Junction One Retail & Leisure Park in Rugby is included at number 17.
Despite some reduction in space, the report highlighted the strong national position of DIY warehouse B&Q, which retained its top UK position for the 10th consecutive year. However, in the West Midlands, B & Q is the fourth largest tenant on retail and leisure parks, the same position as last year. Matalan is the largest tenant in the region, repeating its top position from last year. Currys and Next took second and third positions, respectively.
Trevor Wood added: “Vacancy rates in the West Midlands are continuing to fall. That decline plus the lack of top 10 schemes shows the potential in the region for new developments and investment in retail and leisure parks.”