Vacancy rates at UK retail parks have fallen to 4.7% – the lowest level since 2018, according to data from Savills.
In Scotland, vacancy rates have fallen below the national average to 4.3% thanks to 92 new retail park store openings last year – the highest level since 2019 – and an additional 27 new openings in Q1 this year. Leasing activity north of the border has been led by Lidl, Poundland and Home Bargains.
Discount retailers and F&B operators have driven take-up across the UK with Lidl the most active retailer taking 50 new units last year, followed by Greggs (34 new units).
Savills said it expected the vacancy rate to fall further over the course of 2023 with a number of deals exchanged and waiting on planning approval or refurbishment programmes to complete.
In Scotland, leasing activity could be hamstrung by the current shortage of stock, according to Ian Buchan, director in the out of town retail team at Savills Scotland. “A combination of lack of development, absence of corporate failures and the ongoing strength of new openings have led to a real shortage of available space across retail parks in Scotland,” said Buchan.
Net effective retail parks rents rose 1.1% last year, with the drive-thru sector seeing more significant rental growth of 8.9% due to the volume of operators vying for space.
Sam Arrowsmith, commercial research director at Savills, said: “Despite the strength of wider headwinds, rents across the retail park market have remained robust. Given the lack of availability, there is a confidence that we will continue to see further growth going forwards, with 2023 already getting off to a strong start as retailers continue to expand out of town.”
