Polarisation of performance in global retail markets

Structural change in global retail markets, driven by e-commerce, the rise of technology and changing consumer spending patterns, continues to lead to widely varying performance within the sector. Retailers are increasingly exploring options to manage their lease liabilities, including the introduction of smaller store formats or the negotiation of more break options.

U.S. retail market slowing despite limited development

Market fundamentals in the U.S. retail sector are in a holding pattern of sorts. Vacancy levels remain at their low of 4.8% for this cycle, while net absorption is softening as quality space becomes harder to find due to limited development in recent years. Restrained construction has also kept rents inching upwards, moving many major markets to their cyclical peak.

Job creation boosting consumer spending across Europe

Europe’s retail sales growth outlook is positive, supported by solid GDP growth, record levels of employment, consumer confidence levels near an all-time high and low inflation. Prime retail rents remained stable in most markets during the third quarter across all asset classes, with notable quarterly prime rental growth registered for shopping centres in Greece, Sweden and the Czech Republic, and for high street retail in Barcelona.

Will investors start to react negatively to the structural changes in the global retail sector?Jenny Tuleby, Director European Retail Capital Markets shares her perspective


Find out more about European retail markets: Structural changes in retail – why Europe and the US are different?

A focus on F&B in Asia Pacific

In Asia Pacific, select F&B segments continued to open new outlets, but rental growth was limited across the region. Leading malls in Shanghai experienced strong sales and led rental performance, while Singapore rents moved lower, with the steepest decline recorded in the Marina submarket.

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