Retail vs Logistics Briefing: Coexistence

Co-existence is the name of the game now, as the binary division between physical retail and e-commerce is long gone

Sally Bruer, Head of Research, Tritax, William Kistler, Executive Vice President & Managing Director- EMEA, ICSC, Lachlan Macgillivray, Head of Retail Investment, Australia, Colliers International, Andrew Creighton, Head of Real Estate Continental Europe, Aberdeen Standard Investments and Ingo Steves, Managing Director, Northern Europe, Gazeley Discuss, compare and contrast the Retail and Logistics sectors of the European Real Estate Market

Co-existence is the name of the game now, as the binary division between physical retail and e-commerce is long gone, delegates heard at Real Asset Media’s the ‘Two sides of the coin: Retail vs Logistics’ Investment Briefing, which was held at MIPIM in Cannes. 

‘There is a fusion going on,’ said William Kistler, Executive Vice President & Managing Director EMEA, ICSC. ‘We need to think about the collective that we call retail which is a valuable part of the property ecosystem.’

Logistics, the supply chain, traditional stores, showrooms, click and collect, must combine their efforts to respond to customers’ changing demands, said Sally Bruer, Head of Research, Tritax: ‘It is not one or the other but a combination of all of them working together to ensure that everything functions well and delivers what the customers wants at the right time’.

Consumers’ changing demands are shifting the dynamics of retail, but as stores evolve they  need the support logistics and a fully-functioning supply chain can provide. 

‘I believe it is all about co-existence. Retail has never been more exciting than it is now,’ said Lachlan Macgillivray, Head of Retail Investment, Australia, Colliers International. ‘If retailers get that logistics supply chain right, enhanced with online and in store, they have an ability to be much more profitable.’

Great real estate in the right locations will always present opportunities for flexibility and re-invention, he said.

‘The majority of sales are still done in stores,’ said Bruer. ‘Logistics provides servicing, not just to the online consumer delivering to a home or a locker, because the majority of goods are still going to the stores which need a logistics network’. It is the engine that allows such an increasingly complex machine to work.

Investors and developers should ‘think holistically’ about the positive impact that a retail project can have not just on a neighbourhood but on an entire city, said Kistler. In the past ‘we have sliced real estate into asset classes like offices and resi but now they are coming together again’. 

A new urban shopping centre can lead to residential and office development as well as retail, bring jobs to the area and create a community.

‘Physical retail has been at a disadvantage and I think we will see a pushback coming,’ he said. ‘There is an evolution towards omnichannel and click and collect and other things which will help sustain and showcase retail environments, but there is a real challenge ahead. It is a battle for the future’.

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