Investors pump money into buoyant retail parks - report
We know UK retail parks have been a pandemic success story, constantly beating high streets and shopping centres in attracting consumers during and in-between lockdowns.
And that success drew strong investment last year, attracting twice as much money to out-of-town retail parks than in the year before, “reflecting confidence in the City that this part of the retail property market will emerge stronger from the pandemic”, according to property specialist Cushman & Wakefield.
Financial institutions spent £3.8 billion buying up retail parks last year, according to data compiled by the firm, compared with £1.8 billion in 2020. It was the biggest annual investment into the sector since 2015 and the second-largest in the past decade.
The report noted that retail parks are cheaper locations in which to rent, “which is why only 6% of their shops are vacant, compared to high street vacancy rates of 14% and shopping centres closer to 16%”.
Leasing activity remains “strong”, Cushman said, with Sports Direct, JD Sports, B&M and Home Bargains “leading the way”.
It noted that investors have also been drawn in because retail parks work well as click & collect points, or last-mile delivery hubs. “If all else fails, the owners can turn them into warehouses, demand for which is booming”.
It cited British Land as being among those to have placed a contrarian bet on retail parks, spending £300 million on sites last summer, including in Farnborough in Hampshire, and Thurrock in Essex.
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