Out-of-town retail has consistently outperformed its high street counterpart in recent years, with both opportunistic retailers and customers trading town centres for retail park shopping. Rental analysis of the retail park sector shows that the next five years could be testing for landlords as vacancy and lease terms work to suppress asset values.
According to Radius Data Exchange over 50% of retail park leases signed since 1990 expire or experience lease break between now and 2025.
The outcome of this is that large swathes of out of town stock will be vacated or revalued. While
it is unlikely that more occupiers will seek to evict themselves than remain, what we should instead
expect is the sector to begin to revalue itself at the will of tenants.
We know this from additional analysis into the current costs of renting, which show that many occupiers are paying over the market rent.
Cheaper rents, more space and free parking have offered welcome relief against a turbulent period on the UK’s high streets.
However, with valuations heading south and new space still being built out despite the relentless increase of online spend and occupier consolidation; is the sector in danger of becoming overrented? Radius Data Exchange looks at the top headlines from the sector…