Over the past few years, I’ve watched the traditional anchor tenant model in UK shopping centres shift more dramatically than at any point in the last half-century. The collapse of major department store chains like BHS, House of Fraser, and Debenhams left vast, multi-level units vacant across the country, and for a while, it felt like the entire blueprint for how we build and lease commercial space had been thrown into question. What I’ve come to realise, though, is that the role of the anchor tenant isn’t dying — it’s evolving into something more diverse and, in many ways, more resilient.
That shift matters because the anchor tenant is still the single biggest lever in a shopping centre’s performance. For landlords, it determines valuation. For smaller retailers, it’s often the reason their store works at all. And for anyone leasing commercial space — whether you’re a business owner looking at a unit in a retail park or an investor evaluating a property — understanding what an anchor actually does today is essential. Here’s what you actually need to know.
What an anchor tenant actually is in today’s market
The term “anchor tenant” borrows from sailing — an anchor keeps a ship from drifting because of its size and weight. In a shopping centre, the anchor does the same thing. It’s the gravitational mass that holds the rest of the tenant mix in place. Without one, smaller stores have to draw shoppers on their own, and most simply can’t. But here’s the nuance that matters: the definition has broadened considerably. As Senior Asset Manager Jack Gordon at Sovereign Centros puts it, the term is no longer as simple as referring to an occupier of large retail space. Today, we split anchors into two broad categories: traditional department stores and any other significant footfall drivers.
What I tend to notice when talking to landlords and investors is that many still picture a department store when they hear “anchor.” That’s understandable — it’s how the model worked for fifty years. But the reality now is that a supermarket like Aldi or Lidl, a DIY chain like B&Q, a large fashion retailer like Primark or Zara, or even a cinema and restaurant complex can all function as anchors. At the St. Enoch Centre in Glasgow, for example, a £40 million redevelopment turned a former BHS into a major leisure complex anchored by a Vue cinema and nine restaurants. That’s a fundamentally different kind of anchor, but it does the same job: it pulls people in and keeps them there longer. If you’re evaluating a commercial lease, it’s worth understanding how these different anchor types affect the service charge apportionment and overall operating costs of a centre.
Why the shift from department stores to diverse anchors matters for your lease
The collapse of department store chains wasn’t a small event. BHS, House of Fraser, and Debenhams all went into administration, leaving vast units empty across the UK. But as Mike Egerton, also a Senior Asset Manager at Sovereign Centros, points out, the loss of the traditional department store anchor has actually created opportunities to change footfall patterns and diversify the occupiers of shopping centres. That’s not just theory — it’s happening right now. At The Metrocentre, the former Debenhams is being repurposed into a combination of Sports Direct, Flannels, and Everlast Gym, with additional space for Game. That’s three different operators doing what one department store used to do, and each one brings its own customer base.
For a business leasing space in a centre, this matters because the type of anchor directly affects your footfall, your customer demographics, and ultimately your revenue. A centre anchored by a cinema and restaurants will draw evening and weekend crowds, which is great for a casual dining spot but less useful for a dry cleaner. A centre anchored by a supermarket will bring consistent weekly traffic but shorter dwell times. My first move when evaluating a commercial lease would always be to look at who the anchors are and what kind of visitor they attract. If you’re negotiating terms, understanding the anchor mix can also give you leverage — especially if the centre is still filling vacant anchor space and needs to demonstrate a strong tenant line-up to attract smaller retailers. For more on how lease structures work in practice, take a look at this guide on institutional leases for UK commercial spaces.
Where landlords and tenants get the anchor equation wrong
I’ve seen the same few mistakes come up repeatedly, and they usually stem from assuming the old rules still apply. Here are the most common ones, grounded in what’s actually happening on the ground.
Assuming a big name guarantees footfall
Not all large retailers are effective anchors. The department store model worked because shoppers walked from one end of the centre to the other, passing every inline store. But if a retailer’s sales per square metre have fallen below the level needed to justify its own footprint, it stops delivering traffic for everyone else. The deal only works when the anchor actually delivers. A centre with a struggling anchor will see its smaller tenants suffer too, because the footfall simply isn’t there. That’s why landlords now look at footfall data and sales density, not just brand recognition, when evaluating anchor performance.
Ignoring the cost of repurposing vacant anchor space
Former department stores are essentially large boxes with limited natural light and deep floor plates. Converting them into leisure, residential, or mixed-use space is incredibly expensive. The £40 million spent at St. Enoch Centre and the 2,800 residential units planned at Eastgate Centre in Basildon show the scale of investment required. Landlords who underestimate these costs can end up with long-term vacancies that drag down the entire centre’s performance. If you’re a tenant negotiating a lease in a centre with vacant anchor space, it’s worth asking about the landlord’s redevelopment plans and timeline — a prolonged vacancy could mean lower footfall for years.
Overlooking the rise of the junior anchor
Not every anchor needs 150,000 square feet. Junior anchors — operators like Next, which has expanded its model to include concessions like WH Smith, Costa Coffee, and Victoria’s Secret — can occupy smaller footprints while still driving significant traffic. Primark has also broadened its appeal with dedicated home departments and in-store Disney cafés, bringing new customer profiles into centres. Landlords who only think in terms of traditional department store anchors may miss viable alternatives that could stabilise a centre more quickly and at lower cost. For tenants, a centre with multiple junior anchors can actually be more resilient than one relying on a single large department store.
Misunderstanding lease terms and rent structures
Anchor tenants typically pay below-market rent — sometimes significantly below — in exchange for the traffic they generate. For inline stores, rent can be 10 to 40 times higher per square metre. That gap exists for a reason, but I’ve seen tenants assume they can negotiate similar terms because they’re “important” to the centre. That rarely works. The anchor’s leverage comes from its ability to draw customers, not from its size alone. If you’re a smaller tenant, your best negotiating position comes from understanding what the anchor actually delivers and how your business complements it. A commercial space lease that aligns your rent with the footfall you can expect is far more valuable than one that simply matches market rates.
→ Scroll right to see all columns
| Anchor Type | Typical Footprint | Lease Length | Rent vs. Inline |
|---|---|---|---|
| Traditional department store | 8,000–25,000 sq m | 15–25 years | Below market (e.g. under €5/sq m/month) |
| Supermarket / hypermarket | 2,000–10,000 sq m | 15–25 years | Below market |
| Large fashion (Primark, Zara flagship) | 3,000–8,000 sq m | 10–20 years | Below market |
| Leisure (cinema, gym, restaurant) | 2,000–10,000 sq m | 15–25 years | Below market |
| Junior anchor (Next, H&M) | 1,000–4,000 sq m | 10–15 years | Slightly below market |
How to evaluate and negotiate around anchor tenants in your commercial lease
Writing about topics like this takes real time and research. If you buy something through an Amazon link on this page, I may earn a small commission — at no extra cost to you. It’s one of the things that makes it possible to keep BritWealth free to read. I only link to products that are genuinely relevant to the article.
Whether you’re a landlord filling vacant space or a tenant looking at a unit in a centre, the anchor tenant is the single most important factor in your decision. Here’s how to approach it practically.
Assess the anchor’s actual footfall contribution
Don’t rely on brand reputation alone. Ask for footfall data, sales density figures, and dwell time statistics for the centre. A centre anchored by a supermarket will have high weekly traffic but short visits, while one anchored by a cinema and restaurants will have lower but longer visits with higher evening and weekend peaks. Match your business model to the footfall pattern. If you’re a café, a leisure-anchored centre might work better than a grocery-anchored one. If you’re a convenience store, the opposite is true. A tenant landlord lawyer can help you review the lease terms to ensure the anchor’s obligations are clearly defined and enforceable.
Understand the redevelopment pipeline
If the centre has vacant anchor space, find out what the landlord plans to do with it. Are they converting it to leisure? Bringing in a new retailer? Repurposing for residential? The timeline matters. A centre with a two-year redevelopment plan will have different footfall patterns than one with a completed anchor line-up. If you’re signing a lease during a redevelopment, negotiate rent reductions or break clauses that reflect the uncertainty. At Merry Hill, a new 36,000 sq ft Hollywood Bowl is being introduced to anchor a new casual dining zone — that kind of addition can transform a centre’s appeal, but only once it’s open.
Negotiate rent in line with anchor performance
Inline stores pay significantly higher rent per square metre than anchors, but that premium only makes sense if the anchor delivers the promised footfall. If the anchor is underperforming or the centre is still filling vacant space, you have leverage. Ask for turnover-based rent clauses, rent-free periods, or caps on service charge increases. A smart guide to leasing tech park spaces offers similar principles that apply here — the key is tying your costs to the value you actually receive.
Plan for the future of the anchor model
The shift isn’t finished. As Mike Egerton notes, shopping centres must become far more experiential, with a strong leisure and restaurant focus, and may need one or more “flagship” or anchor tenants that aren’t pure fashion retailers. That means the anchor mix in five years could look very different from today. When signing a long lease, consider break clauses or renegotiation points that let you adjust if the centre’s anchor strategy changes. A 15-year lease tied to a department store that might not exist in 10 years is a risk worth pricing into your negotiations. For more on how lease structures are evolving, read about sustainability and UK commercial rent prices.
-
1Review the anchor tenant line-upIdentify who the anchors are, their lease lengths, and their recent performance. Look for diversification — multiple anchor types are more resilient than a single department store.
-
2Request footfall and dwell time dataAsk the landlord for centre-wide footfall figures broken down by day and time. Match these to your business model before signing.
-
3Negotiate lease terms tied to anchor performanceInclude clauses that adjust rent or allow break options if anchor occupancy falls below a certain threshold. A tenant landlord lawyer can draft these provisions.
-
4Plan for redevelopment timelinesIf the centre has vacant anchor space, get a written timeline for redevelopment and negotiate rent reductions or break clauses that cover the period before the new anchor opens.
Frequently asked questions about anchor tenants
Can a leisure operator like a cinema really replace a department store as an anchor? ▾
What happens to my lease if the anchor tenant leaves? ▾
Do anchor tenants always pay less rent than smaller stores? ▾
How do I find out who the anchor tenants are in a centre I’m considering? ▾
Are there any UK regulations governing anchor tenant leases? ▾
The anchor tenant model has changed more in the last five years than in the previous fifty, and it’s still evolving. The key takeaway is simple: don’t assume the old rules apply. Look at who the anchors actually are, what footfall they deliver, and how the centre is adapting. That’s what will determine whether your lease works for you. If this was useful, you might also want to read your guide to commercial space renting and service charges in the UK.
Sources and Further Reading
Tips for securing your rent deposit in the UK — Practical advice on protecting your deposit when entering a commercial lease, including how anchor tenant performance can affect deposit terms.
Save money on London commercial leases: expert tips — Negotiation strategies for London leases, with specific guidance on how anchor tenant mix affects rent and service charges.
The Importance Of Anchor Tenants. Sovereign Centros, 2024.
What is an anchor tenant?. Ariadne, 2024.
