Retail Warehouse Investment Soars in H1, Buoyed by Wave of New Entrants

Retail warehouse investment volumes have climbed to £1.5bn in the first half of the year, marking a 32% year-on-year increase, according to new data from CBRE.

This follows a strong 2024, in which retail warehouse investment volumes reached £3.35bn, the highest level since 2021. The number of deals completed fell below the five-year average to 100, as larger lot size transactions returned. The average lot size in H1 2025 was £38m.

Institutional capital has maintained dominance for prime retail parks, with REITs and private equity leading the core plus space. However, a wave of new entrants has been active in the market, with capital from France and the US accounting for 58% of H1 buyside activity. 

Rental growth for prime retail parks looks set to continue in the second half of the year, according to CBRE’s research. However, this is expected to be focused on small-to-mid unit sizes, typically between 7,500 sq ft and 20,000 sq ft. A number of recent lettings have achieved higher rentals on specific unit sizes, which has led to the prime retail park rental growth index increasing by 8% over the past 12 months, ending in H1 2025.

The combination of low levels of vacancy and strong tenant demand has led the recovery in rental growth in prime retail parks. The vacancy level for all retail warehousing has fallen in H1, standing at 6% for Q2 2025, according to Trevor Wood Associates. Supply from existing stock increased in 2024 as a result of the Carpetright and Homebase closures, both with significant store portfolios. Occupier interest in these stores has been widespread, and CBRE estimates that 75% of Carpetright stores have been taken up on retail parks, with 85% of Homebase stores on retail parks and solus units taken up or under offer.

Read the report here