British Land, the leading property firm in the UK, has raised its expectations for the performance of retail parks. Retail parks make up the largest share of the market in the UK, with British Land holding an 8% share. These retail parks have proven to be a profitable sector for the company, with both retailers and consumers showing strong demand. Retail parks are now the preferred format for a wide range of customers due to their affordability, convenience, and compatibility with omni-channel retailing.

British Land’s success in the retail park sector can be attributed to the combination of high demand and limited supply, as well as the company’s scale and focus on operational execution. As a result, the occupancy rate for the company’s retail parks stands at an impressive 99%, indicating a strong market position. British Land has also experienced significant leasing activity, with 511,000 square feet leased in the five months leading up to August. This leasing activity was 15.3% above the estimated rental value, showing the attractiveness of retail parks to tenants. Additionally, the company has 677,000 square feet under offer, indicating strong interest in these spaces.

To showcase the advantages of retail parks, British Land recently organized a tour for key investors and analysts at Nugent Shopping Park in south London. The purpose of the tour was to provide more insight into British Land’s strategy for retail parks and to highlight the occupational dynamics and investment landscape of this sector. The tour aimed to demonstrate that retail parks are a compelling and fluid investment option in the direct market.

One of the key factors contributing to British Land’s impressive occupancy rate is its recent deals with Frasers Group. Notable deals include Sports Direct doubling its store size to 21,000 square feet at Teesside Park and Wheatley Retail Park in Doncaster. Additionally, high-end fashion retailer Flannels secured a new 13,000 square feet lease at Teesside Park. Other significant deals include a 23,000 square feet lease to value fashion/lifestyle retailer Primark at Glasgow Fort and a 43,000 square feet lease to value retailer B&M at Teesside Park. These deals highlight the popularity of retail parks among well-known retailers and further demonstrate British Land’s strong leasing performance.

Based on its leasing momentum and success in securing key deals, British Land has upgraded its estimated rental value growth guidance for retail parks in FY2024 from 2-4% to 3-5%. This upgrade reflects the company’s confidence in the continued success of retail parks and its position to capitalize on this growth.

In conclusion, British Land’s focus on retail parks has proven to be a prosperous strategy. The high demand and limited supply in this sector have resulted in a robust occupancy rate and strong pricing power. The company’s leasing momentum and recent deals with prominent retailers highlight the attractiveness of retail parks as an investment opportunity. With an upgraded forecast for estimated rental value growth, British Land is well-positioned to continue benefiting from the thriving retail park sector in the UK.

Useful links:
British Land Official Website
Retail Gazette – News on Retail Parks