Retail Insights Q4 2023 – Q1 2024 Berkshire & North Hampshire

The retail market in Berkshire & North Hampshire encompasses approximately 33 million square feet of retail space spread across key towns such as Reading, Slough, Basingstoke, Windsor, and Bracknell. With a combined population of 1.3 million, this region offers approximately 26 square feet of retail space per capita, slightly above the UK average. Despite a low unemployment rate of 3.3%, which falls below the national average, retail demand in Berkshire & North Hampshire is on the rise, particularly in major retail hubs like Reading.

The introduction of Elizabeth Line services in Reading has significantly improved connectivity and spurred increases in house prices. Notably, Reading's Broad Street Mall has witnessed numerous deals in recent quarters, with establishments like Furniture Mode, Sushimania, and Brother2Brother opening stores there in 2023. Additionally, plans for a new arcade and gaming centre at the mall are progressing.

Elsewhere, retail parks in the region are performing well, boasting high levels of occupancy. With only 26,000 square feet of retail space available across the entire market, the availability rate stands at just 0.8%. Landlords of retail parks are leveraging this high demand to maintain rental rates, despite overall market declines.

Retail construction activity has slowed significantly following the completion of various town centre regeneration projects, such as in Bracknell. The next significant redevelopment is anticipated in Basingstoke, following the approval of a new master plan by the local council in early 2023. Additionally, more shopping centres are expected to transform into alternative uses, as seen with the approval of a demolition plan for the Nicholsons Centre in Maidenhead and the planned conversion of the Kennet Centre in Newbury into a residential-led development.

Retail investment in Berkshire & North Hampshire has cooled off amidst the market downturn of the past 18 months. Only £147 million worth of retail property changed hands over the past year, significantly below the 10-year annual average of £323 million. Yields have also seen an increase. Noteworthy transactions in 2023 include AEW's Urban Real Estate Fund acquiring Windsor Royal Shopping Centre for £18.5 million at a yield of 9.6%, aiming to capitalise on the resilient performance of retailers in Windsor and its strong tourist presence. Despite the slowdown, retail parks remain relatively attractive to investors, as evidenced by Columbia Threadneedle's acquisition of two units on Pincents Retail Park near Reading for £7.1 million, reflecting an 8.3% yield.

Retail investment in Berkshire & North Hampshire has seen a decline amidst the market downturn that commenced 18 months ago. Only £147 million worth of retail property exchanged ownership over the past year, significantly lower than the 10-year annual average of £323 million. Yields have also experienced a shift. Notable among the transactions of 2023 was the acquisition of Windsor Royal Shopping Centre by AEW's Urban Real Estate Fund for £18.5 million, yielding 9.6%. This move aimed to leverage the resilient performance of retailers in Windsor and the area's robust tourist presence.

Despite the market slowdown, retail parks have maintained their appeal to investors. Last summer, Columbia Threadneedle acquired two units on Pincents Retail Park near Reading for £7.1 million, reflecting an 8.3% yield.