European Retail Warehousing 2008, a report by global real estate consultant Cushman & Wakefield, shows how the European retail warehousing market has begun its long-awaited transformation from being dominated by single units and clusters to see the emergence of a more sophisticated retail park format offering better accommodation for occupiers and consumers, as well as a more viable asset class for investors.
The UK is the most mature retail warehousing market in Europe, with 55% of provision accounted for by integrated retail parks. However, it has seen its share of total retail park floorspace in Europe fall from 80% five years ago to its current 43% as development continues apace elsewhere in Europe.
At present, the only other country where retail parks account for more than half of total retail warehouse provision is Spain.
European Retail Warehousing 2008 analyses the markets of 15 European countries, taking into consideration factors including existing provision, as well as rents, rental growth and yields.
Koen Nevens, Partner, European Retail Warehouses, Cushman & Wakefield, says: "We are seeing a structural shift in the retail landscape across Europe as the roll-out of the retail park format gathers pace. The total retail park pipeline, not including single-unit or cluster retail warehousing, is set to reach just over nine million square metres over the next two years."
France has more square metres devoted to retail warehousing than any other country in Europe, with a total of 23 million m². However, only 5% of this total is comprised of integrated retail parks rather than single units or clusters. It has around
4.4 million m² of space proposed for the next two years, although a proportion of this total has yet to receive the appropriate permits.
Christian Dubois, Head of Retail, Cushman & Wakefield in France, says: "France may have one of the highest existing provisions of retail warehouse space, but most of this is in the form of clusters and stand-alone units. What we are currently seeing is an explosion of purpose-built retail parks, with key schemes coming onto the market such as the 43,000 sq m family village in Aubergenville."
On a per capita basis, Poland and Italy have the lowest levels of retail warehousing. In Italy, just under 800,000 m² across 30 schemes is planned to be completed over the next two years, mostly in the north of the country, but also with important developments in the centre and south. In Poland, Ikea is the clear market leader in the development of purpose-built, integrated retail parks.
Retail warehousing provision per 1,000 people:
Country - GLA (m²) of total retail warehousing space per 1,000 of population*
Ireland - 431
France - 378
Austria - 354
Belgium - 289
Netherlands - 285
UK - 244
Germany - 212
Denmark - 174
Sweden - 166
Czech Republic - 117
Hungary - 90
Spain - 87
Portugal - 47
Poland - 34
Italy - 30
* Figures date from December 2007 and exclude food stores.
In terms of occupiers, we are seeing a hard core of around 20 international retailers emerge in a number of countries across Europe, says Darren Yates, Associate, European Research & Consultancy, Cushman & Wakefield. In particular, these retailers include UK, German, French, Austrian and Swedish DIY (do-it-yourself) and furniture operators, which are also among the most active in the newly emerging markets for retail warehousing in Romania, Bulgaria, Russia, Turkey and the Ukraine.
The tenant base for retail warehousing is broadening, continues the report, from a predominance of DIY and furniture retailers, and discount retailers, to include more traditional in-town and shopping centre names looking to extend their presence out-of-town, as has been happening in the UK over the last decade. "Such retailers are attracted by lower occupancy costs and larger units, as well as good accessibility and easy parking," adds Darren Yates.
Looking forward, Koen Nevens, says: "Over time, we will see a greater overlap in the