According to research by Trevor Wood Associates, retail warehousing vacancy rates remain on a downward spiral. Figures from the leading retail consultancy responsible for compiling the Definitive Guide to Retail and Leisure Parks, indicate the UK’s mid-year retail warehousing vacancy rate stood at 5.1%, falling from 5.3% at the end of 2016.
Trevor Wood Associates has built up the most comprehensive retail warehousing database in the UK and its research reveals an ongoing decline in average vacancy rates. Since hitting a peak of 10.0% in mid-2013, the rate, which includes both free-standing units and parks, has almost halved to 5.1%.
The findings suggest the retail warehousing market remains resilient despite challenging conditions. Since January 2016, many retailers, including Bhs, Brantano and 99p Stores, have been put into administration or entered into a CVA. Meanwhile, the likes of B&Q and Currys/PC World have downsized their property holdings. The combined impact of this market shift could have potentially increased the amount of retail warehousing space available by almost two million sq. ft, yet take up of space has kept the vacancy rate in check.
The research shows the level of vacancies varies depending on planning consent. By the end of Q2 2017, the Open A1 vacancy rate stood at 4.5%, the same as at the end of 2016. Meanwhile, the level of vacant Open Non-Food units fell from 5.4% at the end of 2016 to 5.3% and other units dropped from 5.4% to 5.2%.
In terms of geographical trends, retail warehousing vacancy rates in the first half of 2017 reduced in all but three regions – the North was unchanged, whilst the South West and Yorkshire & Humberside saw rates rise slightly, largely down to Brantano going into administration.
Since July 2017, there have been other store closures and economic pressures continue to mount. Yet Trevor Wood Associates understands that retail warehousing units totalling more than one million square feet, are currently under offer. Given robust take up, the consultant predicts the end-year vacancy figures will fall yet further.
Trevor Wood said: “We feel these figures show that the retail warehousing market has reacted well to changes over the past few years. We are optimistic that the year end figures will show further falls across the board and that this trend may well continue into 2018.”