European Retail Park Development

Martin Supple

International Partner

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The full report

European Retail Park Development Report 2016
WHAT’S DRIVING THE GROWTH OF RETAIL PARKS ACROSS EUROPE?

Retail parks stand out as locations of choice for many retailers and the nature of those retailers is changing. There are a number of traditional high street and shopping centre retailers who are testing the waters, trying to understand if retail parks are a viable option in their portfolios, alongside the traditional locations they have occupied in the past (e.g. H&M, Zara, Célio, C&A, CCC, Vision Express).

Relatively low costs, flexible floor layouts, better logistical structure for supplying the stores, click and collect services, the opportunity to test new formats and concepts are the key drivers of growing occupier demand reflected in the generally high occupancy levels in retail parks. One stop shopping, easy access, free parking and wide range of retailers are key factors attracting customers to this retail format. Moreover, recent trends are indicating that experience is just as important as convenience. Improved designs and style and the presence of leisure and entertainment operators are having a positive impact on footfall.

2015 saw 863,000 sq.m of new retail park space complete, increasing the total European stock by 2.4% to 37.3 million sq.m as compared to 36.4 million sq.m at the end of 2014. Development activity was highest in France, Belgium and the UK which accounted for more than 60% of all retail park space added in 2015. Activity is expected to surge ahead in 2016 and 2017 with 2.4 million sq.m currently in the pipeline and expected to be completed.

TRENDS

  • The quality of the offer is improving with redevelopments and refurbishments paving the way
  • Growing consumer and retailer demand for well located and accessible retail
  • Expanding retail range, leisure and entertainment mix are key success factors for a scheme
  • Increasing levels of smaller scale schemes servicing more local catchment areas
  • Reorientation of tenant mix with a growing proportion of newcomers to the retail park market that previously only took space in high street locations or shopping centres
  • Addition of upmarket food operators
  • Growing franchising in several sub-sectors, including fashion, white good retailers, leisure and entertainment operators in order to limit new format risk
  • Increasing footfalls and decreasing vacancy rates

Retail Park Development in Europe 2016

 Top 3 most active countries for Retail Park development (2015)
 Country   Space added in 2015 (sq.m)
 France   393,000
 Belgium   102,000
 United Kingdom   66,000

Increased retail park development across Europe is set to deliver 1.3 million sq m of new space to market by the end of the year, up 50% on 2015’s total.

A further 1.1 million sq m of new retail park space is scheduled for delivery in 2017. This is also significantly more than the 863,000 sq m of space added across Europe in 2015.

If all the new space is delivered as planned it will take the total retail park floorspace in Europe from 37.3 million sq m at the start of 2016 to nearly 40 million sq m by the end of 2017. Of the potential 2.41 million sq m to be added, 2.06m is in Western Europe and 0.35m is in Central and Eastern Europe (CEE).