Vacancy rates for retail warehouse space in the UK remain at their lowest level in 12 years, according to the latest research from Trevor Wood Associates. The findings show that rates have remained at 5.9 per cent from Q4 2015 to Q2 2016 and are anticipated to drop further by the end of the year, despite store closures from B&Q, Brantano and BHS.
Since the recent peak of 10.0 per cent in mid-2013, the retail warehousing vacancy rate continued to reduce for the next two years despite disposals, relocations and downsizing by retailers. By the end of 2015 the retail warehousing vacancy rate (including both free-standing units and parks) had fallen from 6.4 to 5.9 per cent.
Despite BHS’ closure of its retail park stores Woods reports that more than one million sq ft of recently-vacated space is already under offer and he forecasts that the vacancy rate will have fallen further by the year end.
The three regions that have seen the biggest reduction in available space are Northern Ireland, the North West and Yorkshire & Humberside. In contrast, five regions – East Anglia, the North, Scotland, Wales and the West Midlands – have shown an increase over the past six months, primarily as a result of the Brantano administration and store closures by both B&Q and Currys/PC World. Despite this East Anglia continues to have the lowest vacancy rate in the UK at just 3.1 per cent and Northern Ireland the highest at 9.6 per cent.
The top three direct property owners within the retail park market at the end of Q2 2016 are British Land, Hammerson and the Crown Estate, which has replaced Land Securities in third position. B&Q, Currys and Homebase remain the top three occupiers, despite all three reducing their portfolios by between 0.9 and 3.8 per cent.
Trevor Wood concluded: “Despite continued administrations, receiverships and store closures for some retailers, a significant amount of space on retail parks has been taken by expanding retailers. The fastest growing tenants include Poundland, Tapi, Poundworld and The Range.”