Supermarkets expand ahead of shopping centres for first time

The number of planned grocery developments has surged 67%, or by 19.24 million sq ft since 2007.

Data shows that out-of-town supermarket formats have continued to outpace growth of town centre shops, according to City AM.

For example, in the third quarter 3.5 million sq ft of out-of-town retail space was under construction against 460, 000 sq ft in town centres.

Overall, the amount of new grocery space being built at the end of September was 3.51m sq ft, up from 2.95 sq ft in March 2013.

Director at property adviser CBRE Chris Keen said: “Tesco, Sainsbury’s and Morrisons have all reduced their new floorspace targets over the last year. However, they are all still expanding.

“Tesco is more acquisitive than a year ago. With Waitrose, Marks and Spencer, Aldi and Lidl increasing their space requirements, grocery pipeline contraction still looks a long way off,” he added.

Retailers have been focusing on online operations and convenience store formats in response to consumer shopping habits.

This year Tesco wrote down around £800m on its UK property portfolio after it decided it no longer wanted to develop 110 plots of land it bought five to 10 years ago. It put another 40 sites next to existing stores up for sale after deciding not to extend the stores.

Sainsbury’s also wrote down £92m of property-related costs in the first half of the year when it cancelled plans to open stores on 15 sites.