UK retail parks are effectively at capacity in 2026, with new research from Savills showing that available space has fallen to just 1.8 per cent of total floorspace, creating intense competition among retailers and limiting expansion opportunities across the sector.

The international real estate adviser said headline vacancy rates stand at 4.3 per cent, but the figure drops sharply once long-term vacant and obsolete units are excluded. According to Savills, the remaining availability equates to less than one year of supply across the market, leaving retailers competing for a shrinking pool of suitable space.

The shortage is restricting activity despite continued occupier demand. Savills recorded 721 lettings in 2025, below the long-term average of 847, which it attributed to a lack of available space rather than weaker retailer appetite. The property adviser described the market as one of the most competitive occupational environments in UK real estate.

Savills data shows that 91 per cent of retailers are renewing their leases, limiting the amount of space returning to the market. The high retention rate has made retail parks one of the property sector's most stable segments, with little churn available for expanding retailers or new entrants.

Johnny Rowland, co-head of out-of-town retail at Savills, said the market was characterised by "a structural imbalance between supply and demand". He added: "While lettings volumes appear below trend, this reflects an acute shortage of new and available space caused by a lack of available land, high build costs and challenging appraisals, as well as the general covenant strength of the sector."

The company pointed to a shortage of development land, rising construction costs and difficult development economics as reasons behind the constrained delivery of new retail park schemes. Rowland said competition was particularly intense for well-located assets, where retailers increasingly need to secure space well in advance or wait for rare lease events to create openings.

According to Savills, the composition of retail park occupiers has shifted significantly over the past decade, with grocery, discount and value-led retailers increasing their share of floorspace while traditional bulky goods operators have become less dominant. The change has broadened demand for retail park space and strengthened occupier retention.

Sam Arrowsmith, commercial research director at Savills, said: "The evolution of the occupier base has fundamentally reshaped the retail warehouse market over the past decade." He added that growth among discount grocery and variety retailers had created "a more resilient, supply-constrained market".

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