Insight: outlet sector outperforms wider retail market
The UK outlet sector is outperforming the wider retail market according to a new report.
The study by global real estate advisor CBRE found that outlet sales have grown at a faster pace than all shopping centres in recent years.
The report shows that a number of UK centres recorded almost double-digit sales per year between 2012 and 2017. Bicester was found to be the most successful with sales densities higher than any other mall in the world.
The sector’s strong track record means that it has attracted more attention from investors in recent years. In addition to being backed by UK based institutional capital, the outlet centre sector’s investor base has now diversified to include REITs and global capital.
The report shows that the UK has the highest floorspace of outlets per capita in Europe, but a large part of this is outside the top ten to twelve outlet centre assets. Colliers said there are still areas where outlet penetration is low with opportunities for development.
2020 will see two new additions to the premium outlet market when Cannock and Scotch Corner open for business. Glasgow and Grantham are also expected to see the opening of new outlets in the next few years.
Rhodri Davies, head of UK retail at CBRE, said: “Outlets have become increasingly attractive to brands and investors alike. Flexible lease structures, with strong landlord controls and the capacity for operators to achieve a swift return on investment through increases in sales, provide a stable platform for investors. While the discount model seems to resonate increasingly with shoppers.
“When well-located with a high-quality leisure experience, outlet centres present a unique experience tailored to the modern consumer, and should continue to perform in the new retail landscape.”
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