Optimistic Outlook for Commercial Real Estate Investments

2 mins
April 2, 2024

According to the latest report by the Local Data Company and Green Street, there's been a notable increase in both closures and openings across the GB retail and leisure market. Despite economic difficulties, the data underscores the resilience and adaptability of GB retailers and leisure operators, presenting clear opportunities for businesses and commercial landlords.

Navigating Economic Pressures

Rising interest rates and operational costs posed challenges for GB retailers, leading to a 14% year-on-year increase in closures between 2022 and 2023. However, a 5% rise in openings during the same period indicates a more robust market, with innovative changes such as retail-to-residential conversions emerging as viable solutions to address vacancies and revitalise town centres.

Strength in Retail Parks

Retail parks continue to demonstrate strength, experiencing a net increase in units and a decrease in vacancy rates. Demand remains high, with investors projected to witness rental growth as retailers expand their out-of-town presence.

Adapting Shopping Centres

While shopping centres faced a decrease in units due to competition from out-of-town retail, efforts to attract occupiers and repurpose vacant spaces led to an improvement in vacancy rates. Creating immersive in-store experiences and prioritising prime locations have become focal points for retailers in this sector.

Rising Sectors

Categories such as barbers, nail salons, beauty salons, and convenience stores saw significant growth in 2023, reflecting sustained demand for personal grooming services and convenience-driven shopping trends.

Anticipating Future Trends

Looking ahead, community provision and mixed-use development projects are expected to play a significant role in local retail strategies. Despite economic uncertainties, the data suggests a level of resilience across the GB retail and leisure sector, with agile retailers and developers poised to seize opportunities amidst evolving market conditions.

Navigating Volatility with Strategy

A spokesperson from the Local Data Company notes, "2023 was a period of significant volatility and churn, with activity across the market in terms of openings and closures far beyond anything we’ve seen in the previous couple of years." While challenges persist, careful strategy and adaptability are key to navigating the ever-changing landscape of the commercial real estate market.

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