European retail in 2012 – Cushman & Wakefield
As MAPIC gets under way in Cannes, Cushman & Wakefield says some European retailers faced with negative retail sales at home are increasingly turning to Asia in the search for growth. But while international brands – not just luxury ones – have been stepping up expansion plans in Asia, they do face competition from growing Asian brands also expanding across the region, the firm notes.
Meanwhile in Europe, while an increasing number of retailers and investors have been stepping up cross-border activity, C&W says retailers are also actively evaluating their store portfolios in order to cut costs and maximise margins where possible, with many chains restricting their focus to major global cities in prime high street and shopping centre locations.
Having said this, some retailers that are less risk-averse have become ready to target new and emerging markets, and are also considering smaller towns in established markets. “In all cases however, the focus for most is prime locations and well-configured property,” C&W says.
C&W notes that while retailers are seeking modern space in order to achieve efficiencies and to tie in with their need for sustainability and the use of modern technology, prime space is becoming increasingly scarce. This trend is not helped by the tendency of some retailers to buy their own freeholds, the firm adds. The modest development pipeline is also likely to remain a “major challenge to retailers’ expansion strategies”, says C&W’s report ‘What’s in store for European Retail 2012?’, while some schemes currently in development have reported delays.
Mark Burlton, head of EMEA retail tenant rep at C&W, says: “The basic message we have for success in the market in 2012 is to keep it fresh – the market is crying out for new ideas and concepts – but stay focused on prime – retailers still need access, proximity and visibility.”
David Hutchings, head of European research at C&W, says that while growth in 2012 is expected to be lower than in 2011, demand from luxury and mid-market retailers is set to boost high-street performance, as these companies seek “high-profile, accessible units”, but with retail warehousing also expected to do better as convenience and cost-effective formats see greater demand. “Designer outlets are also expected to continue to perform well, with turnover in the past few years for well-managed centres substantiating the belief that the concept is more resilient in recession than other areas of retail,” he adds.
