• Swindon & Wiltshire Property
• Wednesday July 16 2025

South West out-of-town retail market set for strong 2025, says Savills

The South West out-of-town retail warehouse market is poised for another robust year despite macroeconomic headwinds, according to new research from international real estate advisor Savills.

The South West accounted for nine per cent (72) of all new UK retail warehouse openings in 2024, outperforming the previous year’s total of 56 and aligning closely with the region’s three-year average of 73.

This reflects a broader national pattern where demand remains strong, but supply is limited to failing tenant portfolios as no new space is being developed.

Q1 2025 saw a surge in lettings activity across the South West, largely driven by increased supply following the administrations of Carpetright and Homebase.

These units were quickly re-let, contributing to a strong start with 27 new lettings. Activity has since moderated, with 10 lettings recorded in Q2, bringing the H1 total to 37.

While the pace has slowed, the region remains on track to reach approximately 74 new lettings by year-end, which is broadly in line with 2024’s total of 72 – a positive result given the current economic uncertainty and reflective of the resilience of occupier demand.

In the last 18-months, the most acquisitive operators in the South West have been The Range, which has taken seven units, five of which came in Q1 this year, Tapi (six), Greggs (five), Bensons for Beds (three), PureGym (three) and B&M (three).

This is reflective of the UK market as a whole – with all these operators featuring in the top 15 most acquisitive operators for 2024 and so far in 2025 on a national basis.

Clive Power, director in Out of Town Retail at Savills in Bristol, said: “The South West continues to demonstrate the strength and resilience of the out-of-town retail sector.

“With vacancy rates below the critical five per cent threshold and demand from value-led and essential retailers remaining high, we’re seeing upward pressure on rents in certain towns, and a competitive leasing environment.

“As supply remains constrained and consumer focus shifts toward affordability and convenience, the region is well-positioned for sustained demand throughout 2025 and beyond.”

Savills reports that the UK retail warehouse vacancy rate rose slightly to five per cent following recent administrations but remains low and is falling due to lack of supply.

In the South West, vacancy is even tighter at 4.6 per cent, making it increasingly difficult for expanding operators to secure space. This scarcity is expected to support rental values and, in certain markets, drive rental growth.

In 2024, net effective rents across the UK rose by seven per cent to an average of £21 per sq ft.

However, undersupplied markets – defined as those with less than 5.95 sq ft of retail warehouse space per capita – saw average rental growth of 14.8 per cent, reaching £22.53 per sq ft.

he South West includes several such markets with significant catchment populations and limited supply, including Bath, Cheltenham, Exeter, and Salisbury.

Sam Arrowsmith, director of Research at Savills, added: “Our latest research highlights a critical shortage of available retail warehouse space, with vacancy rates at a historic low.

“This scarcity, coupled with a strong demand for out-of-town retail locations, has led to a upward pressure on rental values.

“The recent Poundland restructure will only see approximately 50 units returned to the sector nationally. Not enough to satisfy the appetite demonstrated in Q1 take-up.”