WAREHOUSING MULTICHANNEL


SPECIFIC RETAILERS’ INCREASE IN OUT-OF-TOWN SQ FT SPACE SINCE 2002


358%552%


of town it seems the writing is anything but on the wall for retail parks. Research from out-of-town retail prop- erty consultancy Trevor Wood Associ- ates shows that a total of 2.7 million sq ft of out-of-town space was added in the 18 months to January 2011 alone. One possible explanation is simply


that a retail park is a cheaper place to be than a high street, and the vacancy rates appear to back this up. In-town vacancy rates are now stuck


at an alarming average of 14.5%, and many towns have as many as 16% of their stores sitting empty. But cost isn’t the only reason. “Retailers don’t want to stay in their in-town shopping centre units because these don’t offer what they want any more,” says Neil Varn- ham, fund director of property invest- ment fund Pradera. “There has been 10 to 15 years of increasing unit-size demand from retailers anyway, even without multichannel, and owners can’t accommodate them any more.” This trend can be seen clearly when


you look at research from CBRE and Experian in the latest Accessible Retail report, published by CBRE in June 2010. The report not only revealed a general decline in the overall amount of town centre space and a big increase in the number of out-of-town units between 2003 and 2009, but a signifi - cant jump – 487 units – in the amount of stores between 5,000 sq ft and 50,000 sq ft.


VI Retail Week November 2011


“MORE AND MORE HIGH STREET RETAILERS ARE CONTINUING TO COME OUT


OF TOWN” Andrew Berger-North, Hammerson


Many retailers are embracing the potential of the out-of-town market


On the high street, the biggest decline


in demand was seen in the smallest units, with 3,095 fewer stores of between 500 sq ft to 2,000 sq ft, and 1,108 fewer stores of 500 sq ft or smaller by 2009. For landlords of out-of-town schemes problems on the high street offer the perfect opportunity.


Spaced out Hammerson is one of the UK’s largest out-of-town landlords with a total of 4.2 million sq ft of retail warehousing space worth £1.1bn. Its director of retail parks, Andrew Berger-North, says the com- pany is fully aware of the opportunities that retail parks offer. He says that because of the problems


on the high street in terms of satisfying retailers’ unit space requirements “a lot of retailers are looking to out-of-town to fulfi l that need. Demand for space out of town is high. More and more high street retailers are continuing to come out of town and that’s going to continue”. Online retailing is only one of many


reasons why some retailers might be deterred from opening new stores on the high street. But as click-and-collect takes off, many believe the retail park will really come into its own rather than suffer as a result. Cushman & Wakefield partner and joint head of out-of-town retail Martin Supple explains: “Retail parks are tailor-made for click-and-collect. We’re defi nitely going to see retail parks being used


887%


Source: Trevor Wood Associates


more and more for that. Click-and-col- lect is going to fl y through retail parks very fast where landlords get the format just right.” Another advantage of the retail ware-


house, says Supple, is that as a unit there are relatively very few physical restraints and landlords can adapt their estates to suit the changing needs of retailers. He adds: “Retail warehousing is big open space. They’re very simple boxes so if you want to change the store environment you can. It’s very fl exible.” Pets at Home is embracing the poten-


tial in the out-of-town market. The retailer has a big appetite for new stores, mainly out of town, and is experiment- ing with a smaller format unit of about between 4,000 sq ft and 6,000 sq ft to allow it to expand even quicker. Stead explains: “We need to keep adding space on retail parks. We can only do certain things like nutrition consulta- tions while in-store. These are things we are doing to draw people to the retail park units and keep things fresh and new. The whole dwell time increases the more you’re offering.” Retailers need to embrace mul-


tichannel to make their stores practical and inviting for customers, and land- lords need to adapt their estates with online shopping in mind in order to make them attractive to retailers. Some landlords are doing better at


this than others. CBRE head of retail consulting Jonathan De Mello says


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