‘Essential’ retailers opened the most stores on UK out-of-town retail parks during H1 2023, according to the latest data from Savills.
Discount grocers and value homewear brands accounted for 19% of total new unit openings, equating to 39.2% of additional floorspace. B&M Retail took the most floorspace in H1 (470,692 sq ft), followed by Home Bargains (445,538 sq ft) and Lidl (425,307 sq ft.
The out-of-town retail sector is on track to exceed the long-term full year average of 843 new openings, with 510 new openings recorded in H1 2023.
Void rates in the sector have fallen from 4.8% in January to 4.4% in July. If Wilko is not rescued from administration, the 1.21m sq ft of retail warehouse floorspace that is expected to return to the market will raise the UK vacancy rate to 4.7%.
Sam Arrowsmith, director in Savills commercial research team, said: “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, added: “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 and 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.”
