UK retail parks ‘effectively full’ after expansion of retailers like Aldi and Lidl
Property advisers have warned that retail parks are “effectively full” following the expansion of retailers such as Aldi and Lidl.
New research from Savills has found that space is running out amid sustained occupier demand and intense competition for best-in-class units.
Subscribe to TRBThe international real estate company stated that available space has dropped to just 1.8% of total floorspace. While headline vacancy rates currently stand at 4.3%, this falls sharply once long-term vacant and obsolete units are excluded.
There are also exceptionally high levels of occupier retention with the data showing that 91% of retailers are renewing leases, with minimal churn returning space to the market. This has resulted in retail parks becoming one of the “stickiest” segments in the property sector and letting activity being held back by supply rather than sentiment,.
Savills recorded 721 lettings in 2025 compared with a long-term average of 847. This came despite weaker consumer confidence and a more volatile trading environment.
Johnny Rowland, co-head of out of town retail at Savills, said: “The current market is best characterised by a structural imbalance between supply and demand.
“While lettings volumes appear below trend, this reflects an acute shortage of new and available space caused by a lack of available land, high build costs and challenging appraisals, as well as the general covenant strength of the sector.
“This is creating a highly competitive environment, particularly for well-located schemes, where securing space increasingly requires early engagement or waiting for rare lease events.”
The research also shows that retail parks’ evolving occupier mix is increasingly weighted towards value-led, grocery and essential retailers like Aldi and Lidl.
Sam Arrowsmith, commercial research director at Savills, said: “The evolution of the occupier base has fundamentally reshaped the retail warehouse market over the past decade.
“Where the sector was once dominated by bulky goods such as furniture, carpets and electricals, these categories have seen their share of floorspace fall, as growth has shifted towards grocery, discount and value-led operators.
“In particular, discount grocery and variety have expanded rapidly, significantly increasing their presence within retail parks.
“This reweighting towards essential and value-driven uses has not only broadened demand, but also underpinned stronger retention, creating a more resilient, supply-constrained market.”
