Trevor Wood Associates identifies a further rise in retail warehouse vacancy rates.
The UK’s out-of-town vacancy rate hit 7.5% at the end of 2018, up from 6.3% six months earlier. The figures reflect tough trading conditions for UK retailers and show the biggest increase recorded since the consultancy began gathering data at the end of 2001 with an extra 5m sq ft of vacant space coming to the market.
2018 proved a challenging year for many UK retailers as turbulent economic conditions and diminishing confidence took their toll. Tenants including Fabb Sofas, Maplin Electronics, Poundworld and Toys “R” Us went into administration or entered into a CVA. In addition, there were disposals, relocations and downsizing by the likes of Carpetright, Office Outlet and Homebase.
However, the current rate is still significantly lower than the peak vacancy rate of 11.8% Trevor Wood Associates recorded in mid-2009. The report also indicates that there is some cause for optimism with second-hand space helping fuel the growth of expanding retailers. During 2018, more than 2m sq ft of floorspace was taken by retail park tenants.
Much of the recent take up has been by Comparison Goods retailers predominantly interested in good quality Open A1 Non-Food consented units, together with variety retailers looking for good value bulky goods units. Trevor Wood Associates calculates that at the end of 2018 the Open A1 vacancy rate had risen to 6.2%, compared to 4.7% in 2017. Meanwhile, Open Non-Food units rose from 4.9% to 8% and the rate for other units increased from 4.6% to 7.0% in 2018.
