VACANCY RATES HAVE FALLEN. The Q2 2025 figure has fallen to 6.0%

“Since the end of 2024, with even less development taking place, second-hand supply has meant the vacancy rate of Open A1 non-food units has dropped to 6.3% from 6.6%. A further 3.6 million sq. ft.  of space is currently under offer with another 881,000 sq. ft. earmarked for redevelopment, meaning the percentage of space actually available to let is as low as 3.8%.”

Retail warehousing vacancy rates in the UK have once again fallen, now at 6.0% at the end of Q2 2025 according to our latest research, compared to 6.4% at the turn of the year and 6.2% at Q1 2025.

The major contributor to the significant fall in vacancy is retailers continuing to take advantage of the amount of second-hand supply made available by various administrations and CVA’s, in 2025 over 6.220 million sq. ft. has either opened or is due to open by the end of the year.

The size of units and retailer requirements are also changing with over 444,000 sq. ft. of lettings in 2024 taken by retailers in units of 5,000 sq. ft. or below. We continue to see the rise of drive-thrus and drive-tos with Costa Coffee, Greggs, McDonald’s and Starbucks increasing their presence in the booming drive-thru market.

The space made available in large part by Carpetright and Homebase’s demise has been snapped up by a number of different occupiers who have faced fierce competition for quality retail warehousing in a market that has kept vacancy rates below 7% since 2021. The Range have been the most aggressive in their rollout of new stores adding 1.4 million square feet to their portfolio (either opened in 2025 or due to open). B & M have taken a further 15 units and Home Bargains have added over 291,000 sq. ft. of space. The Grocery sector continues to open in out of town locations with Sainsbury’s scheduled to open over 350,000 sq. ft., Lidl adding 8 units, Aldi and Farmfoods closely following with 7 units, the food WAREHOUSE increasing their portfolio with 5 new units and M & S Food Hall adding another 3.

The Health & Fitness sector have also taken advantage of second-hand space with Pure Gym adding nearly 174,000 sq. ft., The Gym Group adding another two units while the rise in popularity of Padel may be terrifying tennis traditionalists but it’s certainly not scaring Landlords with numerous independent as well as established brands such as True Padel taking a significant amount of space.

Speaking of traditionalists, perhaps it’s most pleasing to see good old fashioned retail warehousing retailers such as B & Q and Tapi get in on the act, both adding 240,000 sq. ft. to their portfolios. IKEA have also seen a gap in the market for smaller boxes in good locations and are scheduled to open 5 new units on parks and warehouses in the upcoming months. The market continues to be dynamic and we have already seen some of the effects of both Poundland and River Island’s restructuring, with recent vacancies from this, the overall short supply of retail warehousing means a number of units are already under offer with the seemingly insatiable demand from the 166 different retailers who’ve already taken space in 2025 set to increase their portfolios well into 2026.

UK Retail Warehousing Floor Space Q2 2025

Image credits: Nigel - stock.adobe.com