Trevor Wood Associates this week presented its Definitive Guide to Retail and Leisure Parks 2017, a comprehensive review which suggests the sector is faring well despite economic uncertainty, at BNP Paribas Real Estate’s offices in the City of London. The retail consultancy’s flagship report, which incorporates rankings of schemes, owners, agents and tenants, reveals continued market growth, falling vacancy rates and appetite amongst key occupiers for well located second hand units.
The vacancy rate for retail warehousing fell by more than 10% during the past year and is now lower than at any time since records were first compiled in 2001. At 5.3%, the rate is significantly below the figure of 5.9% recorded last year and well below the peak figure of 11.8% recorded in 2009.
Trevor Wood Associates has built up the most comprehensive retail warehousing database in the UK, with detailed information for every one of the 16,400 retail warehouse units currently trading or under construction. Its 2017 guide shows that despite economic pressures, the total retail warehouse market enjoyed marginal growth in 2016, incorporating 187.34 million sq ft.
Although some big name retailers continued to suffer in 2016, with the likes of Bhs and Brantano put into administration or entering into a CVA, the research highlights a strong pool of expanding retailers keen to take second hand space. Last year, more than 5 million sq ft of floorspace was taken by retail park tenants, with 39 of the top 50 non-food tenants increasing their retail park presence. Expanding retailers include the likes of B & M, The Range, Poundland and Home Bargains.
This balance of supply and demand has meant rental levels have remained relatively stable, although a combination of lettings and late reviews saw the proportion of retail parks with peak rents between £25 per sq ft and £30 per sq ft rise by 15%.
The Definitive Guide to Retail and Leisure Parks also includes a series of league tables. The top 10 retail parks remained the same as last year, with Middlebrook Retail & Leisure Park in Bolton taking top spot thanks to a GIA (gross internal area) of 646,661sq ft. The top retail warehouse cluster was Westwood Road in Broadstairs, with a GIA of 1,120,538 sq ft whilst the O2 Entertainment District in Greenwich was awarded the coveted title of the top leisure scheme, with a GIA of 600,000sq ft.
For the twelfth consecutive year, the guide named British Land the leading investment manager of retail parks in the UK. It also retained the title of the leading direct property owner, with IKEA edging past Hammerson into second position.
Wilkinson Williams was ranked the leading retail warehousing letting agent for the seventh year running, whilst Savills maintained its status as the leading retail warehousing managing agent, with more than 23 million sq ft of instructions.
Trevor Wood said: “This analysis shows that the retail warehouse market is buoyant and vacancy rates look set to improve over the coming year with numerous store openings proposed. The future looks positive, particularly when you consider that we have featured 113 schemes thought likely to proceed before 2023 in our development pipeline. This pipeline is greater than at any time since our 2008 review when the vacancy rate was recorded at 8.3% and rising whereas now it is 5.3% and falling.”