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Deep Dive into Local Data Company: 2023 UK Retail and Leisure Trends Analysis

New insights on the UK retail and leisure market revealed a boom in commercial real estate activity over 2023.

The latest report by the Local Data Company (LDC) and Green Street, covering key developments across the entire Great Britain retail and leisure market over 2023, shows a spike in numbers of both closures and openings, representing significant churn.

Rises in interest rates and operational costs compounded the challenges for GB retailers, leading to a year-on-year increase in closures of 14% between 2022 and 2023. However, closures were somewhat tempered by a 5% rise in openings during the same period, indicating a much more resilient and adaptable market than has been seen in previous years. Innovative changes of use and retail-to-residential conversions have become increasingly attractive, offering an economically viable option to address vacancies, align locations with current demand and revitalise town centres.

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Retail parks were a particular area of strength, continuing the positive trajectory they have seen in recent years. With a net increase in units of 0.4% over 2023, they were the only location type to see a positive overall change. Demand remained high for retail park units, driving a 1.4% year-on-year decrease in vacancy rate. Further decreases are expected as retailers continue to expand their out-of-town offer, with investors in this space projected to see some rental growth.

While competition from out-of-town retail drove a 1.3% decrease in units for shopping centres, vacancy did improve by 0.5%, reflecting continued efforts to attract occupiers following the pandemic as well as convert long term vacant space into other uses. Analysis by Green Street reveals that strong, experience-led tenant mix is the key to thriving shopping centres; accordingly, for many retailers in this sector, the focus has been on creating immersive in-store experiences and prioritising highly visible prime locations.

Despite the economic headwinds seen over 2023, the latest data indicates a notable level of resilience across GB retail and leisure. While inflation and interest rates ease, making space for growth, uncertainty is still present in the form of anticipated economic and political change. Green Street and LDC anticipate that flexibility and careful strategy will enable agile retailers and developers to navigate any upcoming challenges and identify opportunities.

The full report includes further detail on:

  • Multiple vs independent performance
  • Growing and declining retail and leisure categories
  • Central London’s office hotspots
  • Long-term vacancy rates
  • Reoccupation of ex-Arcadia sites and department stores
  • The potential for repurposing and repositioning retail assets, including via retail-to-residential conversion

A Trusted Voice in the Industry

The Local Data Company provides market participants with exclusive data and insights to support the following core client groups:

  • Retail Occupiers- portfolio optimisation, expansion strategy, competitor tracking, market and sector tracking, and due diligence for M&A
  • The Property Sector- tenant strategy, due diligence, asset acquisition, radius analysis of health, research on reoccupation activity, and evidence for business rates reform
  • The Public Sector- strategic town planning, government funding applications, investment impact, and economic development projects.

LDC’s Quarterly GB Vacancy Monitor featured in recent React News article: Retail Vacancies Flatline As High Street Struggles Temper Recovery

PwC recently launched its latest figures for Store Openings and Closures in 2023 across Great Britain using research undertaken by Local Data Company.

The LDC and Green Street Partnership

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The Local Data Company is now joined with Green Street to provide in-depth market analysis across the U.K. retail sector. With LDC’s granular, location specific analysis and Green Street’s forward looking thought leadership, the union will continue to provide market participants with timely and expanded insights.

Recent reports that incorporate both Green Street and LDC data:

20 November 2023

Green Street takes a closer look at the London Retail sector using data from Local Data Company and sheds light on investor demand and real estate values. Whilst the holistic takeaway for London’s high-street retail is negative, granular analysis of two distinct portfolios suggests the negative read across is less severe than at first blush.

  • U.K. Retail Insights: Mind the Vacancy Gap

4 February 2024

Spot vacancy is an important determinant of future cashflow resilience. Most European PropCos only report EPRA vacancy rates – effectively a ‘financial’ gauge of vacancy. LDC records physical vacancy as well as tenant categories. Granular analysis of this data provides insight into how the EPRA vacancy rate can be widely different to physical vacancy rates and highly misleading in times of cyclical stress in the industry.

  • Office Insights – Central London: Holding Tight

20 December 2023

Green Street uses LDC’s rent and vacancy data to analyze both the investment and occupational markets. This provides insight into London’s total return outlook with prime submarket snapshots.

  • Retail Insights: Grocery Stores: An Attractive Opportunity

23 November 2023

U.K. grocery has three categories: supermarkets (~55% of the stock), discounters (~25%) and convenience (~20%). Each grocery segment differs in terms of (i) location, (ii) size, (iii) sales productivity and (iv) profitability. Green Street analyzes private market portfolio quality based on LDC’s Supermarket Index.

This year, Green Street’s unique data assets and LDC’s rich retail intelligence will be integrated yet more closely, resulting in an enriched joint offering that provides unmatched value and depth of insight. John Guilfoy, Chief Product Officer at Green Street, outlines what clients can expect in 2024.

“We’re excited to relaunch the online platform, with more predictive analytics— making the data even more applicable and supportive to a wider range of use cases. These enhancements will empower clients to gain maximum value from our products and the unique thought leadership and differentiated insights we bring to this industry.”

As with all our product releases, these LDC enhancements have been shaped with client feedback at the forefront, ensuring that we meet the diverse needs of our users. Our development process takes the wide range of use cases for our data into careful consideration to deliver high value for all.

“We interviewed a host of clients and have worked diligently to focus enhancements around the most key parts of the products, bringing the best of LDC and Green Street together to deliver unparalleled analytics on the current and future UK retail market.”

The plans for our new platform include enhanced health indices, forecasting, competitor analysis, retailer health scores, portfolio analysis, and filtering, resulting in a suite of comprehensive intelligence tailor-made for investors and retailers.

Check out LDC’s full offerings and more insights: https://www.localdatacompany.com/

 

Green Street UK is authorized and regulated by the Financial Conduct Authority (FRN 482269). Our global organization maintains information barriers to ensure the independence of and distinction between our non-regulated and regulated businesses.  Local Data Company is not a regulated Green Street business unit.

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