Out of Town Retail Sector Overview

Executive Summary

GDP flat in 2012, however, recovery forecast for 2013 and 2-3% annual growth by 2015.
Despite low interest rates (0.5% since Q1 2009), the number of mortgage approvals are still less than half that seen in 2007.
Inflation has dropped significantly during 2012 and is now in line with the Bank of England target rate.
UK unemployment (8%) has remained consistently lower than the Eurozone average.
The retail sector is the third largest employer by industry sector, behind that of business services and the health service.

Out of town retail sales growth has historically been, and continues to be, higher than the equivalent in town centres.
The proportion of retail spending on bulky goods will continue to grow year-on-year going forward.
Shopping centre completions continue to be centred around town centres as opposed to out of town locations.
Smaller units in town reduced between 2003 and 2009.
Out of town units between 2,000 and 50,000 sq ft grew between the same period.
Compared to in town retail, out of town sales densities are higher.
Vacancy rates are lower out of town versus in town location.
The retail pipeline is showing signs of recovery.
The value of retail warehousing grew by £4.7 billion between 2009 and 2011 – the highest amongst any asset class.

Bluewater remains the top out of town mall in the UK, followed by both London based Westfield schemes. Fosse Park is the top retail park.
Out of town retail now accounts for 25% of total floorspace.
From a spend density perspective, new space requirements are highest in Greater London, East Anglia and the South West.
Out of town retail growth has been driven by grocery demand.
The sector must adapt to changing consumer demands such as the ability to ‘click and collect’ as well as coping with retail casualties such as Comet.