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Retail space
Yield expectations in the retail park sector are still holding up, although they've now sunk under 5%, low but still ahead of high street stores and the problem child, shopping centres.
New research from global property advisor CBRE reveals that Germany has retained its number one position for the second consecutive year as the most popular retail market in the world, with 40% of retailers planning to open a store there in 2015. Germany is closely followed by the UK with 33% and France with 31% of retailers.
47% of retailers surveyed in the survey, How Active are Retailers Globally? indicated that unclear economic prospects and cost escalation, largely due to increases in rental costs and lack of quality retail space, are the biggest concerns for 2015. However, despite this, appetite for international expansion remains a strong focus as retailers continue to invest in their store network throughout 2015.
Global retailers continue to be attracted to Germany largely due to the opportunity to target more than 30 large cities with high purchasing power. Despite the huge interest in the German market, retail rents have largely remained stable or have seen a slight increase. The UK also continues to be a popular target for overseas retailers as demand for store space remains resilient, especially in London.
France follows closely behind the UK, attracting retailers due to its mature market with several strong cities and a large number of very successful shopping centres across the country. Retailers are generally attracted to the ability to get critical mass quickly, and have focussed on Paris and the Paris region before expanding into other cities. Recent changes to Sunday trading days from five to 12 per year in some areas, and the creation of Zones Of International Tourism, which will allow Sunday opening all year round is further improving the attractiveness of France to retailers.
Peter Gold, Head of Cross-Border Retail, CBRE, commented: “Given the ongoing challenges retailers face from cost escalation, successful delivery of omni-channel, and changes in consumer behaviour, it is increasingly important for them to have a strong network of stores to effectively represent their brand. The cost to open a new store remains prohibitive, and retailers now have to look beyond key areas to traditionally less premium sites.
