Retail markets focus on asset enhancement and tenant mix

Retailers are adapting and re-evaluating their existing physical space in response to the structural change impacting the sector, with a notable acceleration in new business models and owners investing to create attractive mixed-use destinations for the evolving shopper.

U.S. retail market expansion slowing amid rapid structural change

The U.S. retail story in the fourth quarter remained largely consistent with the broader trends of 2017. Retail construction continues to slow, rents are still rising but at a slower rate than in previous quarters, and vacancy continues to be low. Developers are holding back on new retail construction, in line with the mall renovation pattern of converting traditional retail spaces into non-retail uses, with owners investing to create mixed-use destinations for a new kind of shopper.

Find out more about how the US retail market is responding to the structural changes in the sector - A New Mall Rises - Retail centres renovate, redevelop and re-tenant to remain relevant

Consumer confidence in Europe at historically high levels

Strong confidence and job creation continue to drive consumer spending in Europe, although prime high street rents are broadly stable in most markets. E-commerce growth, the rise of technology and changing consumer spending patterns continue to shape European retail demand. As a result, there has been a notable acceleration in initiatives addressing this evolving retail environment; responsive retail, new business models and omni-channel will continue to thrive in this context.

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 tenant-mix adjustments in Asia Pacific

In Asia Pacific, many retail landlords are adjusting tenant mixes while retailers focus on consumer engagement and experience, with generally flat rents across the region. In Sydney, retailers are opening new concept stores that offer greater customer engagement and experience. Mass market fashion brands were among the most active retailers in Beijing and Shanghai, while leasing activity in Hong Kong was dominated by renewals and cost-saving initiatives.

To find out more about the leading retail locations in Asia Pacific, download our latest Retail Guide.

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