The recent retail tribulations of big-box operators Carpetright and Toys R Us could leave as much as 4m sq ft of empty space in the out of town retail sector.
Toys R Us fell into administration in March, closing its 105 UK stores and 3m sq ft of space, and Carpetright is pursuing a CVA which would see it close 92 stores, comprising 1m sq ft of space.
While much of the space in retail parks will be suitable for expanding discounters such as B&M, Aldi and Lidl, there is concern these two administrations in one sub-sector could leave some landlords struggling to fill the space.
However, landlords sitting on standalone stores could be open to more options in the event they are unable to relet their shops.
EG data has identified nine standalone stores in the Carpetright and 13 standalone stores in the Toys R Us portfolios which have a combined amount of 650,000 sq ft of potential redevelopment space. This means 16% of the 4m sq ft could be redeveloped into alternative uses.
One of the most notable opportunities in the Toys R Us portfolio is its store on Old Kent Road, SE1. It is one of several sites that Toys R Us Properties UK owns freehold, and is on the route of the proposed Bakerloo line extension.
Its positioning and proximity to the Old Kent Road Opportunity Area means it has become one of the most sought-after residential development sites in London, and one of the last pieces in the Old Kent Road jigsaw.
Other sites that will likely enthuse residential developers include Carpetright’s East Grinstead store, which is nestled between three resi-led developments on London Road.
Expectations for the majority of those empty units, specifically those in retail parks, will be reletting – value and fashion brands will likely continue on their relative growth and take advantage of the new dearth of space.
They are also less likely to be converted from retail due to their ownership and connections to other units on that site.
For those stores located away from major schemes and separate from other uses, we may begin to see a move from retail into alternate functions.
Looking at the consolidation of the B&Q portfolio when Kingfisher cut loose 60 stores in 2015, many of those units were reconfigured into new schemes in order to facilitate demand for smaller stores.
Many were taken by value retailers and discount supermarket chains and even residential developers lodged plans for the rest.
This could include residential, standalone leisure or having the stores reconfigured for alternative retail uses as many of the former B&Q stores were.
Additional reporting by James Child
