The Intermediary –- May 2026 - Flipbook - Page 72
SPECIALIST FINANCE
Opinion
RETAIL IS MO
BUT NOT EVE
etail was meant to
be finished. Or at
least that was the
line for long enough
that people started
to repeat it without
really thinking. Once that happens, it
tends to stick, even when the market
has already moved on.
There is definitely activity in the
sector now, and deals are being done,
but it is not spreading evenly, and that
is probably the most important point
to understand at the moment.
What we are seeing is demand
coalescing around the strongest
locations, the most convincing assets,
and the borrowers who can actually
make a case for what they are doing
and explain why it works in practice.
That is what lenders are really
focusing on now. Everything else
is having to work a lot harder for
aention.
Research from Savills gives a useful
starting point here, with more than
1,500 brands expanding in 2025 and
around 8,200 new store openings,
which does not look like a sector in
retreat, however you frame it.
But what sits behind that is just
as important, because much of that
growth is being driven by smaller,
fast growing operators who are far
more selective about where they take
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The Intermediary | May 2026
space, and far less interested in being
everywhere for the sake of it. They are
picking their spots, and they are doing
it deliberately.
Demand is returning
Demand is back. There is no question
about that, but not in the way
people might have expected. It is not
returning in a broad, forgiving way
where everything benefits just because
the market feels a bit beer.
It is concentrating, and in some
cases quite quickly, around the assets
that already make sense, which
in practice is where most of the
activity now sits.
The strongest schemes – the well
positioned retail parks and the
locations where footfall still translates
into spend – are seeing genuine
competition for space, and in some
cases that is feeding through into
rental growth, which again would
have felt unlikely not all that long ago.
But you only have to step a lile
outside of those areas to see that this
is not a uniform picture, and if we are
being honest, never really was.
Secondary stock, in particular, is
not seeing the same weight of demand.
If anything, it is being looked at more
closely than before, because in a
market like this you do not get carried
along by momentum in the same way.
MICHAEL THOMPSON
is lending director at LHV Bank
You have to justify your position,
and not every asset can do that as
easily as it once might have done,
which is likely where the real change
is happening.
The result is a market that, from a
distance, can look more positive than
it actually feels when you are dealing
with transactions day to day.
Activity is real, but so is the
widening gap between the assets that
make sense and those that are still
relying on a slightly more generous
interpretation of their prospects.
Appetite with conditions
Investor interest has returned to
retail, which again is a change from
where we were, and it has come back
