2025: Predictions
As we move into 2025, and with a new President in the White House, trying to make sense of how our industry will be impacted in the future seems harder than ever. Nevertheless, we believe that some trends are starting to emerge. Don’t forget, every year we insert our regular caveat that these are predictions and not projections! We’ll be following up on many of these themes in forthcoming Perspectives, so check back here regularly. In the meantime, your feedback on all/any of our predictions is most welcome; do feel free to contact us at hello@p-three.co.uk, call us on 020 7101 3151.
In 2025 prime retail will truly brake away from the pack. While historically it was able to lift secondary and tertiary markets along with it, the void between these tiers will now widen dramatically.
Kate:
Build the right product to win the best tenants – this year I predict landlords and developers will pay even closer attention to delivering correctly specified space in order to attract the best in class F&B and leisure operators. From BREEAM ratings and EPCs to appropriate kitchen spec and shopfronts – the full spectrum of fit out and design must be closely considered.
The decline of deliveries – I expect the delivery apps and services to soften as more and more people grow frustrated with overpaying for delivery fees, only to receive mediocre quality food. People will continue to flock back to restaurants as they crave good food served in a nice restaurant setting.
Michaella:
Support and demand for smaller local and independent businesses will grow as consumers continue to seek a more authentic shopping and dining experience.
Consumers will seek activities that reduce stress, improve mental clarity, and boost physical health, leading to a surge in wellness-oriented outdoor experiences such as cold plunge pools and thermal spas and other such similar activities
Raquel:
Physical stores will become increasingly immersive, with AI and AR driving more personalised and engaging customer experiences. Expect smarter fitting rooms, virtual try-ons, tailored product recommendations, with the ability to integrate visible sustainability and ethical credentials. Nike and Sephora are already examples of brands on this in-store journey, but this is just the beginning. The next wave of in-store innovation will redefine retail as we know it, elevating customer expectations and pushing the boundaries of traditional shopping.
Increasing rents and longer lease lengths will be the trend for super prime and well managed retail locations where competition remains strong, however there will remain tenant-friendly and flexible leases available especially in locations that look to establish or re-position themselves.
Thomas:
Suburban London will thrive as restaurants pivot to target these markets with areas like Greenwich, Wimbledon and East Dulwich seeing highly competitive bidding for space. These hotspots and others benefit from hybrid working culture, which has created new opportunities for F&B operators to tap into localised demand outside traditional city centre hubs."
Rising costs and financial pressures defined 2024 and this will continue in the first half of 2025, but improve in the second half of the year. Policies such as increased National Insurance and minimum wage hikes will add millions to operational expenses and have placed significant strain on already tight margins for many.
Louise:
Athleisure: No signs of this trend slowing in 2025…. We wil continue to see an increasing number of athleisure brands in high street and shopping centre line ups. This aligns with the broader shift toward wellness-focused communities and environments as well as the growing demand for convenience, comfort, and an active lifestyle in living and working spaces.
We will see an increasing number of padel occupiers on traditional retail and leisure schemes as the popularity of the game continues to rise. Schemes with historic vacancies or excess car parking are great solutions for padel occupiers, especially where gyms are present, as they are very accessible and fit the consumer demographic. However, we will also see padel coming to rooftops, basements and other landmark & high profile locations.
Hannah:
In 2025 prime retail will truly brake away from the pack. While historically it was able to lift secondary and tertiary markets along with it, the void between these tiers will now widen dramatically.
Beauty and athleisure will continue to dominate retail in 2025, driven by social media-savvy tweenagers. Sephora, Pure Seoul and Gym Shark all enjoyed particularly strong traction as they are able to most effectively bridge the gap between digital influence and a physical presence. This blend of online engagement and in-store experiences will continue to shape the future of retail into 2025 and beyond.
Justin:
2025 will see another strong performance in the super prime shopping centre market with high levels of leasing activity and rental growth. It will be a busy year also on the investment side as 2024 demonstrated there is appetite across the market.
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