British Land, the leading UK property giant, is enjoying great prosperity in the retail park sector. With a substantial 8% market share, the largest in the country, both retailers and consumers are showing strong interest. Retail parks are particularly appealing to customers because of their affordability, convenience, and compatibility with omni-channel experiences.
British Land attributes its success to several factors: the combination of high demand, limited supply, successful operational execution, and scale. These factors have resulted in an impressive 99% occupancy rate and enhanced pricing power. Over the past five months, the company has experienced significant leasing momentum, leasing 511,000 square feet, which is 15.3% above the Estimated Rental Value (ERV). Furthermore, there are currently 677,000 square feet under offer, at a remarkable 19.4% above ERV.
To further solidify its position in the retail park sector, British Land recently organized a tour for key investors and analysts at Nugent Shopping Park in South London. The purpose of this tour was to provide detailed insights into the company’s retail park strategy, occupational dynamics, and investment landscape. Retail parks have proven to be attractive and highly liquid investments in the direct market.
The company’s outstanding 99% occupancy rate has been bolstered by five recent deals with Frasers Group. Sports Direct has expanded its presence by doubling its size to 21,000 square feet at Teesside Park and 24,000 square feet at Wheatley Retail Park in Doncaster. High-end fashion retailer Flannels has secured a new 13,000 square feet letting at Teesside Park. Value fashion/lifestyle retailer Primark has taken a 23,000 square feet space at Glasgow Fort, and value retailer B&M has leased a substantial 43,000 square feet space at Teesside Park.
Considering the significant leasing activity above ERV, British Land has revised its retail park ERV growth guidance for FY2024 from 2-4% to 3-5%. With its well-defined strategy, operational excellence, and strong demand in the retail park sector, the company is well-positioned for continued success in the future.
Useful links:
1. British Land Official Website
2. British Land Retail Parks
