Retail warehousing market continues to “thrive” post-pandemic

Schroders Capital UK Real Estate Fund (SCREF) has announced that it has completed 121,000 sq ft of new lettings across its portfolio of retail warehousing assets, with deals signed in Essex, Kent, East London, and Norfolk.

The lettings, which take SCREF’s total retail warehouse and leisure portfolio to 93 per cent let by ERV, were agreed at the fund’s retail parks in Chatham, Norwich, Colchester, Chelmsford, and Romford.

At the “popular” Chatham Waterside in Kent, SCREF has signed fast growing dessert chain Kaspas and global coffee shop operator Costa on 10-year leases. Kaspas will occupy a 1,650 sq ft unit, while Costa will move into a 1,450 sq ft unit with both set to open in the next month.

The arrival of Kaspas and Costa follows the recent openings of KFC, Gymfinity Kids and Ninja Warrior UK at Chatham Waterside. The leisure scheme also includes Odeon Cinema and Pure Gym, as well as restaurant operators such as Nandos, Subway and Pizza Hut.

Alongside the lettings at Chatham, SCREF also announced a series of deals at its retail parks in Norwich and Colchester. At Hall Road Retail Park in Norwich, Pump Gyms has joined the line-up, committing to a 16,500 sq ft letting on a 25-year lease, whilst electricals brand Hughes has extended its lease on its 21,500 sq ft store to 10 year term.

Meanwhile at Turner Rise Retail Park in Colchester, a 10-year lease has been secured with B&M on a 32,500 sq ft unit, Bensons for Beds has committed to a 10,000 sq ft unit on a new 10-year lease and a third major national chain is currently finalising a five-year extension to an existing lease on 30,000 sq ft.

The series of new lettings across SCREF’s retail warehouse and leisure portfolio comes as Schroders’ research finds that retail park rents are expected to stabilise, with customer footfall at retail parks currently 3 per cent ahead of pre-pandemic levels.

With typical rents and service charges being lower than shopping centres, Schroders expects there will be “continued demand” for retail park units from discount retailers, convenience-led occupiers, gyms as well as coffee and ‘grab-and-go’ food chains.

Tom Woolven, asset manager at Schroders Capital, said: “Our partnership approach with our tenants gives us strategic insight into how best to model and provide the physical real estate they need for optimum trading performance.

“This is increasingly important as the sector continues to evolve following the challenges brought about by the pandemic and online shopping.”