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An in-depth look at 3 GB retail parks currently on the market, showing the key points for potential buyers

29 September 2016 by Noelle Ghanem

Last week, it was announced that three retail parks are being put up for sale. People have inevitably started asking if that could be the first sign of the revival of investor activity.

The biggest of the three assets is the Interchange Retail Park in Bedford - on the market for £103m. The other two retail parks are based in Scotland: The Kingsgate Shopping Park (Glasgow) for £100m and the Kittybrewster Retail Park (Aberdeen) for £40m.

Now that the Brexit dust settled, it seems like investors and landlords are facing pent-up demand and more development is yet to come. Only two Scottish retail park deals were completed this year: The purchase by NewRiver Retail of Cuckoo Bridge Retail Park and Valad Europe’s purchase of Clyde Retail Park.

According to LDC’s most recent H1 2016 Retail & Leisure Report, Scotland’s retail park vacancy rate is currently 8.5% - the highest since H2 2014. The sale of Kingsgate Shopping Park and Kittybrewster Retail Park, could be an indication of Scotland's sub-market revival.

Using our Investor’s Dashboard in LDO we decided to share some statistics about those retail parks and compare them. Whilst the Scottish retail parks and The Interchange Retail Park are very different in terms of size, retail mix and location, they have two common characteristics:

● All three have a vacancy rate of 0.0%, which is below the GB Average.

● All three retail parks have a LDC/Morgan Stanley Health Index rating of 5 out of 10 in 2015 and 2016, based on 12 health indicators.


Understanding the LDC/Morgan Stanley Health Index breakdown

A. Interchange Retail Park
● Strengths: low vacancy, no persistent vacancy, affluent catchment and presence of anchor retail park retailers.
● Weaknesses: presence of competing schemes and undersupply of F&B.

B. Kittybrewster Retail Park
● Strengths: low vacancy, no persistent vacancy, affluent catchment
● Weaknesses: presence of competing schemes, undersupply of F&B, and below average number of people to shops based on a 20 min drive time catchment.

C. Kingsgate Retail Park
● Strengths: low vacancy, no persistent vacancy, presence of anchor retail park retailers and recent arrival of Next (includes Next Home).
● Weaknesses: presence of competing schemes (proximity to Glasgow), less affluent population and undersupply in F&B.

This snapshot analysis gives you an overview of the health and attractiveness of these assets. LDC can also provide further information to support the due diligence of those assets and how they benchmark against competing centres, regional and national averages. Find out more here.

To find out more please contact Nelia Vateva, or 0203 1111 4393

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