Alternative-use valuation, open A1 planning consent, and the development of retail parks

In this paper I will examine the recent surge in development interest and land values associated with retail park development in the United Kingdom. This surge is shown to have arisen from changes in retailing methods among leading nonfood retailers and in land-use planning regulations which have created concerns over scarcity of land for future off-centre development. The implications for both setup and exit sunk costs for retailers, and alternative-use values for their land holdings, are discussed. It is also suggested that off-centre retailing may be subject to rapid changes in the next few years as the potential for maximisation of value from existing retail parks is sought by developers and financial institutions.