Its a Tenants' Market for Teesside's OOT Retail

The North East’s out of town shopping sector has been a curate’s egg of opportunities and pitfalls for retailers – and to a certain extent, landlords – in recent times.  

On the positive side, many sites have recorded a steady increase in rent over the past five years or so.

This has been driven by the growing popularity of out of town shopping, primarily down to more High Street fashion outlets, free parking and the growing diversity of popular chain-stores, which have refreshed the traditional discount environment. Factor in a recession-hit consumer base looking for value for money, and Open A1 sites are making significant inroads into the dominance of the High Street.

In the region, this rental increase is clearly seen at the Marks & Spencer-anchored Teesside Retail Park, where rates have risen from an historic low of £22 per sq ft in 2004 to their current level around £50. The recession has clearly checked that continuing rise for now, but there is nothing to suggest that when the market improves, rents will not follow.  

On the flipside, landlords have been hit by the effect the recession has had on retailers – especially in the bulky goods sector. The lack of consumer credit for big ticket items like furniture and DIY projects contributed to the demise of chains such as MFI and Leveys and subsequently holes have appeared in the line-up. For landlords, this has raised the spectre of punitive empty property rates and it has been all hands on deck to tempt in replacements with rent holidays and freezes and flexible terms. For instance, Block H, landlords of the 128,000 sq ft former Big W store on Portrack Lane are open to proposals to occupy all or portions of the warehouse. 

This has put retailers looking to expand in the box seat. The standout example on Teesside was GO Outdoors’ move into Portrack Lane, a transaction brokered by Sanderson Weatherall. Since moving into their 35,000 sq ft premises in March – the largest transaction in Teesside since the recession began – the retailer has quickly established itself as a popular addition to the home improvement warehouses that dominate the line-up.  

So despite the recession’s heavy toll on out of town, there has been some significant fluidity and growth. We can expect that to continue, but perhaps with less vigour than before. The downturn has, and continues to present retailers with some excellent opportunities to expand and grow in the North East’s out of town sector.