UK Commercial Property (UKCP) has completed the £33 million acquisition of Trafford Retail Park in Greater Manchester, a move based on an acknowledgment that some areas of retail are defying the general decline in store-based consumer trade.
The purchase of the 12-acre site from Peel is expected to bring revenues of £2.5 million a year, or £17.17 per sq ft. The attraction of the site, built in 1999, is based on its proximity to Trafford City which receives 2.5 million visitors a year and can be reached by car within 2 minutes by 1.5 million people.
This includes the Trafford Centre and various leisure amenities and is close to the M60 motorway and now served by Metrolink trams. UKCP said the proximity to junction 10 of the motorway gave it the chance to offer “a quasi-motorway service station function”.
Fund manager Kerri Hunter acknowledged that some parts of the retail sector “have struggled in recent years”, but noted this area is different. She observed: “Trafford Retail Park is primarily let to discount focused and convenience led retailers, which have proven resilient and continue to perform well.”
This suggests commercial property solicitors may find most major retail transactions are linked to out-of-town sites with more niche retail offerings. This may lead to similar patterns of retail property investment in the Humber region, although there is no single complex there on anything approaching the scale of Trafford City.
Such investments may be carefully selected, however, just as the Trafford City investment is a clear example of cherry picking in what Ms Hunter called “one of the UK’s premier shopping and leisure destinations”.
The Deloitte UK 2021 Retail Trends Report predicted that the growth of online shopping, accelerated by the pandemic, would remain a prominent feature.
However, it forecasted that the in-person market will “polarise” between ”real destination stores that will continue to attract consumers,” and ”hyper local shopping”, the latter benefitting the high street. Sites like Trafford Retail Park will fit in the former category.