Traditional high streets and out-of-town shopping centres are losing out to prime city centre locations as new developments increase, a report has warned.
Property company Colliers International said more than £1 billion of expansion plans in Glasgow and Edinburgh alone are leaving “smaller retail centres limping towards a rates review” in two years’ time.
Last year, there was £4.6 billion of overseas investment in retail property in the UK but more is expected this year.
John Duffy, director of in-town retail with Colliers in Scotland, said: “Evidence of the strengthening in-town retail market is the real progress being made on the significant redevelopment of Buchanan Galleries in Glasgow and the St James Quarter in Edinburgh.
“The key driver is an improving retail market, with significant pre-lets for the Buchanan Galleries extension to the likes of M&S and Next, as well as a 10-screen cinema by Showcase Cinema de Lux.
Mr Duffy said that in-town retailers continue to be highly selective on property deals, with high-profile chains such as Victoria’s Secret and American Eagle taking time to decide on moves to Scotland.
Recently built out-of-town centres are said to be doing well but “first generation” centres may have to look for alternative uses to remain occupied, the firm’s Midsummer Retail Report claimed.
Chris Humphrey, director of out-of- town retail, said: “At Glasgow Fort, British Land has just completed a new extension to accommodate an 80,000sq ft M&S department store, Fat Face and Wagamama, with more new names to follow.
“At Fort Kinnaird in Edinburgh, Primark has announced that it will open its first out-of-town store in Scotland in November. This follows the new cinema/leisure extension complex opened late last year.
“The dominance of these ‘flagship’ out-of-town schemes, however, is arguably to the detriment of some of the more secondary retail parks often with a ‘bulkier’ occupier line-up in inferior locations.
“Many of these first and second generations parks will have to look for alternative uses, such as trade counter or industrial, to bring them back into full occupation. Occupation levels for out-of-town is arguably less of a problem than it is in secondary shopping centres and high streets.”