‘Essential’ retailers dominate new openings at UK’s out-of-town parks
Overall, the UK’s out-of-town retailers have continued to perform well in 2023, with 510 new unit openings recorded in H1 2023, putting the market poised to exceed the long-term full-year average total of 843 new openings.
Looking at the total retail warehousing market, Savills says that continued appetite for store expansion is driving down voids in the sector with the vacancy falling from 4.8% in January to 4.4% in July, following a peak of 6.1% in 2021. If Wilko, however, is not rescued from administration 1.21m sq ft of retail warehouse floorspace will return to the market, although this will still only raise the UK vacancy rate to 4.7%, according to Savills.
Sam Arrowsmith, director in Savills commercial research team, comments: “With consumer budgets squeezed, once again the operators that focus on essential products are dominating the ‘new openings’ retail warehouse league table in 2023. Vacancy rates are falling, but mask an even more competitive situation on the ground as 54% of the 17.9 m sq ft of the space that is currently available has been vacant for over three years, indicating it’s no longer fit for purpose. If we were to remove this space from calculations, the vacancy rate would fall to 2.0%, equating to only 8.2m sq ft of space currently available. When you consider net take-up in recent years has averaged 4.8m sq ft per annum, we essentially have less than two years of supply in the market. If Wilko unfortunately doesn’t survive we therefore anticipate plenty of suitors will compete to secure its vacated space.”
Johnny Rowland, joint head of out-of-town retail at Savills, adds: “The discounters continue to be an essential part of the market this year, and the competition for the Wilko’s business will be intense. We are also seeing an increasing number of food & beverage operators featuring in the top 20 most acquisitive operators. Those active in H1 this year included Greggs (20 units), Starbucks (19), Costa (12), Burger King (7), McDonald’s (7), KFC (6), Taco Bell (6) and Tim Hortons (6), with a particular onus on drive-thru units. Many of these F&B operators would like to take more space, but are limited by scheme configuration and planning constraints.”