It’s fair to say that high street success stories during the peak of the pandemic were few and far between. However, the struggles of the high street have paved the way for an alternative asset class – out-of-town retail centres.
The rise and continued success of out-of-town centres was reflected in British Land’s results this week as the landlord reported a rise in net asset value for the first time since 2018, thanks largely to its investment in retail parks.
Darren Richards, Head of Real Estate at British Land, told Property Week “Retail was struggling before the pandemic, but we flipped it around as retail parks really rebounded well during the Covid period.”
This is a progression from July 2021 when British Land ended rent concessions to tenants across its centres, allowing tenants to select monthly payments or writing off rent at the height of the pandemic.
Mark Powell, Partner at XPROP, specialists in the out-of-town retail market, argues that out-of-town centres are a good bet having been stress tested like never before during the pandemic. Not only have these assets proven resilient but they are bouncing back to pre-pandemic levels and producing outstanding underlying figures, breeding confidence in these assets.
Yet, it’s not entirely surprising that out-of-town retail centres are becoming consumers’ go-to choice. The vast majority centres boast an abundance of space to social distance and link well with the omni-channel, supporting click and collect facilities which have proved increasingly popular as the shift to e-commerce has accelerated due to the pandemic. Changes in consumers’ attitudes appears to be sticking, boosted by the ‘essential’ status awarded to many retail categories located in retail parks during the pandemic.
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