Retail parks continue to be a bright spot in the UK’s retail landscape, enjoying their highest occupancy levels since the pandemic, as they prove increasingly attractive to retailers compared with high streets and other locations.
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According to the latest Quarterly GB Vacancy Monitor from the Local Data Company (LDC), vacancies on retail parks fell to 7.6% in the fourth quarter of 2023 from 7.8% in Q3. This compares with the overall vacancy level across all types of retail of 14%, unchanged from the previous quarter but 0.2% up on the same period last year.
This represents a continuation of the gradual increase in vacancies in the retail sector compared to the pre-Covid-19 period when they stood at 12.1%. In contrast, retail parks have been on something of a tear, having seen vacancies come down from a high of 11.5% in Q2 2021 to the current 7.6% level.
The category had been a consistent performer during the lockdown periods and it has continued to enjoy buoyant footfall and spend right up to the present day as shoppers benefit from free parking and an airy environment while retailers increasingly use retail park units for online fulfilment and clock & collect collections and returns.
Shopping centres have also been on an improving trend, having fallen from a high of 19.4% in Q2 2021 but they still suffer from a vacancy rate of 17.7% despite a 0.2% reduction in the past quarter. Changes are being affected by the ongoing right-sizing of a number of centres. Meanwhile, high street vacancies for Q4 remain unchanged on the previous quarter but still stand at 14% across the UK.
Lucy Stainton, commercial director at LDC, says: “This [fourth] quarter reveals continued notable improvements in both retail parks and shopping centres, with retail parks in particular, achieving their highest occupancy levels since 2019. We anticipate this positive trend will persist, given the continued focus of a diverse range of operators across various sub-sectors. Grocery-led anchors lead the way, but we also observe an uptick in other categories such as health clubs, health & beauty and food-to-go. This diversification enhances the appeal of these parks to consumers, aligning with their broader shopping missions.”
There are regional differences in overall vacancy rates, with London the lowest at 10.6% following a year-on-year drop in Q4 of 0.4%, while the North East has the highest overall vacancy rate at 17.9%. The North West has enjoyed an improvement of 0.4% post-pandemic to 15.6% on the back of major investments in Manchester city centre and the Trafford shopping centre that have been attracting both shoppers and retailers to physical shopping.
