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‘Omnichannel is the road to success’

Damian Harrington, Head of Research, Colliers International

Logistics may be taking the lion’s share of investments while retail is falling behind, but the really successful strategy going forward is blending the two and opting for omni-channel, Damian Harrington, Head of Research, Colliers International, told Real Estate Day.

‘The most successful retailers that we’ve looked at are omni-channel,’ he said. ‘The blending of logistics and retail, and getting it to work in different locations and different cities, will throw up a lot of interesting opportunities’.

If we look at capital spending and capital raising globally there is still a lot more money being raised for and invested in the industrial and logistics sector. 

Major global investors are ‘moving probably twice as much money into industrial and logistics than they do in retail,’ Harrington said. ‘When we look at Europe we’ve seen the retail share of investment go down and industrial gradually creeping up. That doesn’t necessarily reflect all the money that’s gone into industrial logistics because a huge amount, we are talking billions, has been ploughed into JV development platforms so there’s even

more money moving into niche areas like cargo logistics, cross-docking and urban or last-mile logistics’.

The momentum is certaintly there, but it is time to question whether this constant increase in investments makes sense.

‘If you look at e-retailing growth it’s still growing, but it’s diminishing’, he said. ‘Total consumption and household personal consumption is growing but it’s flattening off and if we look at country by country, some countries look like they’re pretty fully penetrated in terms of the amount of e-retailing that is going to happen in that market’.

There is still a lot of growth to come in France, Spain and some of the more peripheral European economies but not all European countries will grow at the same rate as the Nordics or the UK or the Benelux markets.

‘The reasons for this are partly cultural, partly to do with the technological infrastructure, and partly because people still like to shop in shops,’ said Harrington. ‘It’s about leisure, it’s about entertainment, it’s not just about buying goods anymore’. 

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