Have you heard about self-fulfilment centres?


Discussing UK retail parks with investors can be difficult. Firstly, there is trying to explain what they are. Describing them as retail warehousing suggests logistics units with a row of vans outside, while “A collection of large units around a car park” doesn’t paint an attractive image. Could it be as simple as: “It’s where those not in cities shop?”

But then there’s the typical reaction that I’m clearly delusional to suggest that anything in retail could make an attractive investment choice. Retail remains a dirty word. Of course, I understand that many will have lost money in this sector, but that doesn’t seem to stop people wading back into the stock market when they see growth on the horizon. Could it be worth another look?

From an Islamic perspective, retail parks tend to work well. Devoid of the butchers, off-licences and gambling shops of the typical high street provides a helpful starting point. “But surely all retail of devoid of tenants?” Let’s talk about occupancy.

There is no escaping the volume of retailers whether on retail parks, high street, shopping malls or all of the above, that went into administration during the pandemic. However, I see this as an acceleration of the inevitable decline of outdated business models. Plenty of retailers have adapted and are indeed thriving in an online world.

Online shopping has made us consumers impatient, but this often means that “click and collect” provides the easiest way to satisfy a need, whether that be a box of screws, a new TV or the weekly food shop. With the convenience of ample parking, and ability to “pop in” and pick up some new car bulbs, the dog’s food or browse new sofa options, retail parks work.


But what are the facts? From an historic low of sub-5% vacancy at the end of 2017, respected sector analyst Trevor Wood Associates reports that vacancy reached the mid-8%s by June last year, but has since started to fall. We’re seeing this ourselves at 90 North, with the retail park we manage outside Birmingham being back up to full occupancy, with active tenant management to extend leases and bring new tenants in.

When assessing opportunities we look for a mix of retailer types. Firstly, home essentials and electricals, with B&Q, Currys PC World, DFS and Halfords providing a typical line-up. Leisure operators in the broadest sense have been a growing aspect of retail parks, with McDonald’s and Costa Coffee being joined by gyms, kids soft-play and golf simulators. But it’s the discount retailers that are in the ascendency.

With rampant inflation and a cost of living crisis, UK households are needing to save money. Second only to home improvement store B&Q, variety retailer B&M now has the most area let on retail parks in the UK, with more than six million square feet. Their 8% growth in space during 2021, is similarly matched by Home Bargains and The Range, each with more than three million square feet. These are big operations, and given the range of what they sell do require an analysis with respect to haram products.

But still there’s a nagging doubt with many that it’s all about online these days. Well, latest data from the Office for National Statistics shows that online sales declined (yes declined) again in March this year to 26% of all retail sales, down from a high of 37% in February 2021. As the pandemic unwinds we’re not far off being back to the pre-COVID 23% level for online sales.

But still we have the troublesome word “retail”. Taking inspiration from Amazon’s fulfilment centres, I would like to suggest a rebrand for the humble retail park. Welcome to the exciting and rapidly growing sector of “self-fulfilment centres”. Avoiding the lengthy 24 hours delay to receive their items, consumers select what they wish online, drop into their local centre on the way to work or after dropping the kids at school, collect their reserved items and other essentials, and with the savings made at B&M and The Range treat themselves to a coffee and a slice of cake. Truly “self-fulfilment”. You heard it here first!

Written by Philip Churchill, first published in Islamic Finance news Volume 19, Issue 21 dated 25th May 2022.