According to Savills research, the number of retail units to let on Scottish out of town retail parks in 2018 totalled 82, 8% up on the long-term average, as administrations and CVA’s (company voluntary arrangement) released vacant units onto an otherwise constrained market.
Key retailers driving activity include Aldi, Lidl, The Range, Home Bargains, Iceland/Food Warehouse and B&M as well as a number of bulky goods retailers. Scotland has also seen a number of new entrants in the market, with Homestore & More securing its first UK stores at Craigleith Retail Park in Edinburgh and Mavor Avenue, East Kilbride in 2018.
As the wider retail sector continued to struggle against changing consumer habits and rising costs, 2018 was dubbed ‘the year of the CVA’, says the international real estate advisor, with big brands including Carpetright, New Look and Homebase – all of which had a dominant retail park presence – opting in favour of a CVA and Maplin, Toys R Us and Fabb Sofas going into administration. The result was a release of vacancies across Scotland’s retail parks, generating increased churn in the sector and opportunities for new entrants.
Mike Spens, director in the out of town retail team at Savills in Scotland, comments: “Corporate failures in the retail sector in the last 12-18 months have released space onto the out of town retail market and allowed for greater churn. This has created an opportunity for brands such as Home Bargains and B&M and the discount food retailers to expand across Scotland and for new entrants to secure representation.
“The retailers active in the market are exploring options to sub-divide existing units to make them fit for purpose and landlords need to be receptive of these wishes to ensure retail parks have longevity in an ever-changing marketplace. While some retailers continue to struggle in the wake of an online retail boom, others are adapting with the changes and harnessing the new ways in which we shop. Retail parks, in particular, are host to a number of retailers that offer products that customers want to inspect before buying – furniture, carpets, kitchens, bedrooms – and this is one reason why we believe, despite the ongoing negative headlines, retail parks continue to serve a much needed purpose in an affordable context. Equally, the discounters who have been successfully expanding do not offer the ability to buy online and therefore the focus for them remains on physical stores.”
Commenting on the wider UK out of town retail market, Sam Arrowsmith, associate director in Savills research team, adds: “Unlike the retail failures we saw after the global financial crisis, the events of 2018 show signs of a retail revolution rather than a recession. With the endless negative press coverage around CVA’s you would be forgiven for thinking the out of town retail market was in distress. In reality only roughly 3% of units in the UK out of town market were affected by either a CVA or administration in 2018.
“Furthermore, of those stores that were affected in 2018 only 36% were earmarked for closure; this is less than 1.2% of the UK market as a whole. Despite the likelihood of more CVA’s and failures in the coming months, the evidence suggests the impacts are not as severe as what has been reported.“