Despite negative sentiment in some quarters, the retail sector is not in crisis mode. It is in fact changing and becoming a more interesting asset class to work in, experts agreed at Real Asset Media’s European Retail Investment briefing, which was held at the International Investors’ Lounge at EXPO REAL last week.
‘It is great to be in retail today,’ said Eric Decouvelaere, Head of Retail EMEA, CBRE Global Investors. ‘We used to be in a supply-driven model and falling asleep on the job. Now we have a demand-driven model, consumers are changing, retailers are adapting and landlords are being much more reactive and collaborative’.
Now the emphasis is less on the bricks and mortar element and more about curating the activities that take place in the buildings.
‘For 30 years the creative element of retail was silent, but its importance is being realised,’ said Bill Kistler, Executive Vice-President & MD EMEA, ICSC. Everyone talks about mixed-use these days, but ‘the real catalyst is retail,’ he said. ‘You cannot have a successful product mix without retail’.
Even with economic growth slowing down in some European countries, evidence shows consumers are still happy to shop. What they are doing is opting to spend their money on different things, said Eri Mitsostergiou, Director of European Research, Savills: ‘They go for more experiential sectors like eating out or health & beauty, which are growing faster than traditional shopping, so we must redesign our retail spaces to cater for these changes’.
The hands-off approach no longer works in today’s retail environment.
‘At the end of the day intensive asset management is what makes the difference in retail,’ said Decouvelaere. ‘You need operational teams on the ground with a good knowledge of the market. The other key to success is looking at the three C’s when buying assets, whether it is a shopping centre or a high street shop: catchment area, connectivity and condition. If those two conditions are fulfilled, then you can still find some very good opportunities in retail’.