The amount of retail park space is expected to grow in 2019-2020, according to a research paper by Cushman & Wakefield, a property firm. Pictured: A retail park in Howald is seen in March 2019. Staff photo.
Luxembourg had the fourth highest level of retail park prime rents out of 18 western European countries, a commercial real estate services firm has said.
Retail park prime rents in the grand duchy cost less--in terms of euros per square meter per year, as of March 2019--than those located in the UK, Ireland and Switzerland. Luxembourg was pricier than sites in France, Germany and Belgium, on the other hand.
“A retail park is defined as a scheme with a least 5,000 square metres of gross leasable area, mainly comprised of retail warehouse units, with traditional high street goods retailers occupying a minority share of the space.”
Retail parks are attractive because they charge lower rents than traditional shopping centres and often are located “on major roads” near major cities, the property firm said. On the other hand, retail parks are “not suitable for all types of retailers, e.g., high end luxury brands”, and some are in “poor” or “ageing” condition.
Total retail park floorspace in Europe was 50.1m square metres as of 1 January 2019, a year-on-year increase of 2.2%, the Cushman & Wakefield report stated. Across Europe, 995,000 square metres of new retail park space was completed in 2018 (15% less than in 2017). In 2019-2020, 1.45m square meters is forecast to hit the market, with the vast majority (1.3m square meters) in western Europe. France, Spain and the UK are the biggest markets for new retail park space.
Retail parks vs shopping centres
Rent at traditional shopping centres was more expensive in Ireland, the UK, Switzerland, Czech Republic, France and Sweden than it was in Luxembourg. Shopping centre rent in Belgium and Germany was cheaper than in the grand duchy.
The report was based on the company’s internal figures, and covered 22 markets, including Luxembourg and its neighbouring countries.