Retail parks with higher visitation in pandemic. Rents much lower than in malls

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Since the beginning of the pandemic, retail parks have recorded higher footfall than large centers, on average by several percentage points. At some points last year, the total number of customers in retail parks was even higher than before the pandemic, according to CBRE data. This is confirmed by Nielsen’s sales data, which show that small format stores (up to 100 sq m), including the so-called convenience stores, recorded stable sales of +1% on an annual basis. CBRE experts point out that it is a result of, among others, retail parks’ tenants’ structure, which is adjusted to clients’ current needs and is crucial from the point of view of functioning during the restrictions.

– Retail parks are oriented towards the customer who visits them regularly and needs to buy all the most necessary things in one place, without circulating between alleys. Unlike large malls, they save time when searching for products and shorten the distance between the parking space and the store entrance. At the same time, in contrast to online shopping, retail parks provide the comfort of receiving the necessary products “in hand”. The lack of common areas, well-ventilated stores accessible directly from the outside, the compactness of the facility and the high turnover in the parking lot increase the sense of security among customers in a pandemic. These advantages perfectly fit the needs of the present times – says Piotr Karpiński, head of the property management department at CBRE.

Retail parks are oriented towards customers who live nearby and shop there frequently, which is why grocery stores, drugstores and discount multibranch stores, among others, dominate among tenants. Other tenants, most often found in retail parks, offer products from the electronics, fashion, footwear, sports, as well as toys and children’s goods sectors. A pharmacy or a pet store also appear frequently.

More profitable parks

In addition to better accommodating customers in the pandemic, retail parks stand out for their attractive, relatively low rents and maintenance fees, which are a result of the facility’s simple design and no or minimal share of common areas. Average rents for most locations and shopping categories range from about €8 to €12 per sq m per month. Rates can be higher for locations in large cities. It is forecast that rents in retail parks will remain stable in the near future.

– From the point of view of both tenants and investors, retail parks have proved more resilient to the negative effects of the pandemic than shopping centers. In contrast to large schemes, they have not suffered from an increase in vacancy. On the contrary, despite the halting of expansion plans in certain industries, an upward trend has been observed among shopping categories popular in retail parks, such as food operators and discount stores. At the same time, it should be remembered that each of the aforementioned formats has different functions, and it is certain that smaller facilities are not able to take over the role of large galleries, which not only have a much larger offer, but also offer the possibility of spending time in a more interesting way, concludes Piotr Karpiński.

Source: CBRE