National Retail
The UK retail market is showing resilient but polarised recovery. While H1 2026 investment volumes fell to £2.09 billion, down 17% year on year amid geopolitical and inflation concerns, underlying performance is improving; retail total returns reached 8.3% in the 12 months to May 2026 and retail sales volumes and values rose 2.9% and 4.9% respectively between January and May. Demand is strongest in supply-constrained formats, with out-of-town vacancy at a record low of 4.8%, stronger retailers taking larger or upgraded space, and dominant centres benefiting from brand investment and improving lender appetite.
The key headwinds remain business rates, wage inflation, operational costs and macro uncertainty, but the sector’s income returns, occupier resilience and limited development pipeline are supporting a more positive outlook for H2 2026.
As at September 2026, the market narrative remains broadly positive but constrained by limited supply. Recent commentary points to resilient sales volumes, strong relative retail returns and a shortage of prime space, particularly in retail parks, major Central London streets and the best shopping centres.
Q3 2026 continues to bring institutional and overseas appetite: Ardent has acquired Royal Priors Shopping Centre in Leamington Spa and the Howard Centre in Welwyn Garden City; Epsicap REIM has acquired three units at St Catherine’s Retail Park in Perth; and Supermarket Income REIT has continued its grocery-led acquisition programme with approximately £100 million of deals across six assets. Occupier activity also remains active in the best schemes, with Bershka, Hollister, Oliver Bonas and Urban Outfitters signing for new stores at Lakeside, while Primark’s acquisition of a Sheffield distribution warehouse underlines the ongoing investment being made in omnichannel retail infrastructure.
Headline transactions
Shopping-centre investment has regained momentum in 2026, led by larger, institutionally investable assets. Key completed transactions include Redical’s acquisition of Merry Hill for a reported £280–£290 million; Eurofund Group’s purchase of The Broadway for £74.23 million; and Hammerson’s acquisition of a 50% interest in Manchester Arndale for £218 million, implying a c.£436 million whole-asset value and a 7.8% topped-up net initial yield. Together, Merry Hill and The Broadway accounted for approximately 72% of H1 transaction volumes. In addition, Landsec has been named preferred bidder for the Metrocentre, Gateshead, in a potential £500 million-plus transaction; if completed, it would be the most significant H2 shopping-centre deal and an important marker for liquidity in dominant regional retail. The Friary, Guildford has also come to market at approximately £40 million.
The retail warehouse sector has continued to attract significant institutional capital through H1 2026, with UK retail warehouse investment volumes of £1.5 billion in H1 2026 — a 32% increase year-on-year and a continuation of the strong momentum established through 2025, when H1 volumes reached £1.48 billion (a 78% increase on the prior year). Retail parks have consistently attracted approximately 35% of total retail investment, maintaining their position as the most sought-after retail sub-sector among institutional and listed capital.
Prime yields on Open A1 Parks and Bulky Goods Parks stabilised at approximately 5.25% NIY through H1 2026, having compressed from 5.50% at mid-2025, with an average net initial yield of 6.15% across all retail investment transactions in 2025. Good secondary retail warehouse product has continued to trade in the range of 5.75%–6.75% NIY, reflecting the depth of investor appetite beyond the prime end of the market.
Total returns for retail warehousing reached approximately 8.4% annually to May 2026, ahead of the all-property average of 6.1% and confirming the sector's position as the top-performing commercial asset class on a rolling twelve-month basis.
Rental value growth in the retail warehouse sub-sector reached 2.9% in the twelve months to May 2026, significantly outperforming the all-retail average which has turned negative on some indices over the same period. On a three-month basis to May 2026, retail warehouse rents grew 0.5%, equivalent to an annualised rate of approximately 1.9% — a moderation from the pace recorded in 2025 but nonetheless positive across all prime and good secondary locations.
Occupier activity remains healthy. Screwfix has confirmed a target of 35 new stores, and the broader trade and DIY category continues to benefit from the structural shift toward out-of-town formats. The value and discount retail segment — including B&M, Home Bargains, and Lidl — remains an active source of demand, with these operators continuing to prioritise retail park locations as their preferred format. Polarisation between prime and secondary assets is, however, becoming more pronounced: occupier and investor preference is increasingly concentrated in well-located, modern, and infrastructure-ready schemes, particularly those with adequate power supply and EV charging provision.
On the High Street, the market remains selective but active: Fashion Clearances has taken the 82,000 sqft former M&S in Hanley, while Targetfollow has brought The Pantiles in Tunbridge Wells to market, comprising 40,074 sqft of retail and restaurant space with income of £936,855 per annum, rising to £1.07 million on reversion.
Who is buying
Institutional and overseas capital is returning to dominant shopping centres and prime retail parks, particularly where accretive debt, resilient income and asset management opportunities are available.
Shopping centre demand is increasingly asset-specific, with investors focusing on schemes that offer scale, catchment strength and experiential appeal. Occupier activity is being led by expanding fashion, food, jewellery, beauty, health and digitally native lifestyle brands, including Next, M&S Food, French Connection, Beaverbrook’s, Ernest Jones, Bath & Body Works, Sephora, Hollister, Skims and Superdrug. High Street: The buyer pool remains broad and private-capital-led, with family offices, SCPIs and long-hold investors targeting prime income-producing opportunities and heritage-led assets with mixed-use potential.
The Retail Warehouse buyer profile has remained broad, with listed PropCos, UK institutions, and overseas capital — including French SCPIs and US REITs — all contributing to deal flow. September transactions, including French SCPI-backed activity at St Catherine’s Retail Park in Perth, reinforce continued international appetite for smaller, well-let retail park units as well as larger institutional-grade schemes. Competitive bidding has been reported across all quality tiers, with yield compression evident at the prime end and strong liquidity for well-let, income-secure secondary product.
Who is selling
Shopping Centres: Supply is being released in a controlled manner rather than through forced selling, as owners seek to capture improved sentiment for quality stock. Targetfollow marketing of The Pantiles and the wider Tunbridge Wells estate reflects strategic portfolio repositioning, while larger shopping centre opportunities coming to market suggest improving confidence in liquidity.
Retail parks: For existing and prospective owners, the combination of constrained supply, durable income, positive rental growth, and a diverse and expanding occupier base continues to present a compelling investment case.
High Street: Institutional and long-term owners continue to be a key source of stock, largely driven by portfolio strategy, fund dynamics and capital recycling rather than distress.
Direction of travel in the market
Prime retail parks and dominant shopping centres should continue to outperform through H2 2026 due to limited supply, high occupancy and robust retailer demand. September activity supports this view, with further evidence of capital targeting best-in-class shopping centres, grocery-led income and well-let retail warehouse assets.
Retail warehousing remains the occupational standout among all retail sub-sectors — underpinned by the lowest vacancy rates in the sector, continued retailer appetite for out-of-town formats, and a development pipeline that offers no meaningful relief to occupiers seeking space. These conditions, taken together, support a stable outlook for both income and capital performance through the near and medium term.
In terms of the High Street select prime and heritage high streets are attracting renewed interest, particularly where there is strong footfall, tourism, leisure or mixed-use value. The latest lettings and upsizing’s to Sephora, Hollister, Skims and Superdrug reinforce that global, beauty, health and digitally led brands still want high-profile physical stores where they can deepen customer engagement and showcase full brand experiences.
Overall, the market is moving in a more positive direction, but remains polarised: best-in-class assets with strong income and clear asset management angles are likely to attract depth, while secondary stock will remain more pricing-sensitive.
