New food-anchored developments will lead the return of bricks-and-mortar retail, delegates heard at Real Asset Media’s Hot Assets in CEE: Market Update & Investment Outlook – 2022 briefing, which took place online recently on the REALX.Global platform.
“Our strategy is to expand our stores, new food anchors are needed in new schemes and we’re ready to step in,” said Angelus Bernreuther, head of investor relationship management, Kaufland Stiftung. “We see a great opportunity to create new places and bring a new tenant mix to big retail parks or regenerated city areas.”
Mixed-use assets give more flexibility to investors and are good for operators but above all they are important for cities, he said, making them better places to live in.
The digitalisation trend and the transition to online shopping are a challenge, but they can also be seen as opportunities to offer customers the best of both worlds, online and offline.
“The good news is that digitalisation enriches our business rather than replacing it,” said Bernreuther. “The main market share of food will remain in bricks-and-mortar stores but it’s all about the interaction with our clients. We now have click & collect and we cooperate with delivery services in CEE countries as well as in Germany. The new normal will be overlapping trends.”
It is about giving customers more choice and offering them the best of both worlds, online and offline.
The retail sector has had such a bad press that institutional investors continue to avoid it, but they are also beginning to differentiate between sub-sectors and niches within retail that look more promising.
“Our appetite for retail has been limited in the last couple of years but activity has been limited and we lend to liquid parts of the market,” said Justyna Kedzierska-Klukowska, head of Berlin Hyp Warsaw office. “Things may change, and we are certainly seeing more local schemes, especially in Poland, and more activity in retail parks, as well as convenience stores portfolios being traded.”
The logistics sector has sucked all the air out of the room recently, but there are signs that investors’ outlook may be beginning to broaden to other sectors.
“It is not all about logistics”, said Anna Duchnowska, managing director – asset management Europe, Invesco Real Estate. “Food-anchored retail parks are coming back on investors’ radar screens. The only problem is scale, as you’d have to buy a portfolio of five or ten.”
Investors are noticing the resilience that food-anchored retail parks and local convenience stores have shown during the pandemic.
“There are important changes happening in the retail sector, focused on local convenience stores,” said Monika Rajska-Wolinska, chief executive officer, CEE, Colliers Poland. “It is one of the big new trends along with ESG. They present new challenges, but international investors are interested in our markets and we’re looking at 2022 with renewed confidence.”