Retail warehouse voids soar
Published: 31 March, 2008
Out-of-town vacancies have risen sharply over the past year to reach 8.3 per cent of total stock, according to the Definitive Guide to Retail and Leisure Parks 2008, produced by Trevor Wood Associates in conjunction with Savills.
The review found that large space users like B&Q, Focus, Matalan, Homebase and Currys are continuing to downsize stores as part of a wider strategy to rationalise portfolios. This downsizing, combined with numerous administrations and receiverships from tenants such as Choices UK, GlynWebb, Klausssner and Right Price Tiles, has provoked a peak in new and second hand space available.
A higher vacancy rate has been further fuelled by the fact that much of the space released by the bulky goods retailers is between 30,000 sq ft and 40,000 sq ft, while the unit size most in demand is currently between 7,500 sq ft and 10,000 sq ft.
As a result, landlords are now having to sub-divide larger units. For example Royal London Asset Management broke up the former Co-op unit on the Tunbridge Wells Shopping Park into four new stores that were subsequently let to New Look, Next, Argos and TK Maxx.
Martin Supple, head of out of town retail at Savills, said: “Vacancy rates did lift again last year but this is largely driven by the old guard of retailers such as Focus, MFI and B&Q taking active steps to rationalise their portfolios. Furthermore, evidence of such consolidation is very often the sign of a maturing market, so as the retail warehouse sector continues to grow, we would expect there to be more space becoming available, providing good opportunities for new retailers to enter the market.
Supple cited New Look, Asda Living, Tesco Home Plus, Laura Ashley, Dreams and Maplin as examples of retailers still in the market for new space. “We expect the main retailers acquiring space over the next five years to be fashion, clothing, homewares and food stores,” he said.