Retail parks see lowest vacancies for five years
Retail parks remain resilient with the vacancy rate falling to 4.7%, the lowest level since 2018, following an ongoing period of strong occupational demand.
Savills research shows 92 store openings in Scotland last year, the highest level since 2019. Momentum has continued into the first quarter of this year with 27 openings led by Lidl, Poundland and Home Bargains.
As a result of this strong activity, vacancy rates across Scotland currently stand at just 4.3%, which remains below the UK average of 4.7%.
Overall, Savills has seen the discount retailers and F&B operators continue to drive acquisitions, with Lidl remaining the most active retailer taking 50 units in the UK last year, followed by Greggs at 34.
In Scotland, the retailers accounted for seven and three openings respectively.
Savills says the vacancy rate is expected to fall further over the course of the year. A number of additional deals have already exchanged and are awaiting on conditions such as planning or refurbishment, which, when complete, will likely bring the vacancy rate down to even lower levels.
A substantial proportion of the vacant stock in Scotland is also either largely obsolete or due for repurposing or redevelopment.
Ian Buchan, director in the out of town retail team at Savills Scotland, comments: “A combination of lack of development, absence of corporate failures and the ongoing strength of new openings have led to a real shortage of available space across retail parks in Scotland.”
The research from Savills shows that net effective retail parks rents rose 1.1% in 2022, with the drive thru sector seeing more significant rental growth of 8.9% due to the volume of operators vying for space of that format.
Sam Arrowsmith, commercial research director at Savills, adds: “Despite the strength of wider headwinds, rents across the retail park market have remained robust.
“Given the lack of availability, there is a confidence that we will continue to see further growth going forwards, with 2023 already getting off to a strong start as retailers continue to expand out of town.”