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HOT MARKETS


BRAZIL


In the next three years, Brazil will take centre stage on the global arena when it hosts the 2014 World Cup and 2016 Olympic Games. The two events, estimates Cushman & Wakefield, will generate upwards of $50bn in investment. Hosting two of the world’s


biggest sporting competitions will help cement Brazil’s standing. It has the world’s fifth-largest population – 194m inhabitants – and the seventh-largest economy – $2tn PPP GDP in 2011.


Keenan also says the maturity of the


UK market means successful retailers have reached saturation point. “With this lack of growth prospects in the UK, the only option for these brands is the emerging markets in the Americas, Eastern Europe and the Far East where there is the space and opportunity to expand, generating turnover and profit.” Some of the names coming up – China,


Brazil and India – may not necessarily be considered young, but they are still considered retail hotspots – now and for the next five to 10 years. Newer places being tipped are Indonesia, Vietnam, Kazakhstan, and a standout in Africa is Botswana. “In Asia we see Jakarta and Bangkok as hotspots due to very low provision, strong economic growth and good demographics,” says Anne Breen, head of real estate research and strategy at Standard Life Investments.


Rio de Janeiro is a favourite


haunt for expanding retailers, while Sao Paulo is of strong interest to luxury retailers that want to tap into the spending habits of the growing number of upper-income earners. International retailers already


in Brazil include familiar names such as Zara, Calvin Klein, Nike and Adidas, with food retailers such as McDonald’s and Subway having a strong presence As glittering as the statistics


are for the South American giant, there are also difficulties in entry for investors and retailers. Matthew Winn, Cushman’s


While these countries have the rise in


population, plus a growing middle-class, to sustain a growing economy, what is sometimes missing is infrastructure. Kazakhstan’s growth has been put down to improved roads, whereas Jakarta’s traffic is described by Nicholas Holt, Knight Frank’s head of Asia research, as “the worst I have ever seen”. Having substantial natural resources,


with a low reliance on other economies is also considered a key element for expansion. Another trend,


and testimony to the “borderless global marketplace”, is that it is cities, rather than countries, that are


VIETNAM


Americas retail services leader, says: “Brazil is a complicated market. What we often find is that someone calls us about Brazil but we end up talking about Chile, Columbia or Peru because the other countries have the sort of partnerships that make entry easier for foreign retailers.”


Winn says retailers such


as Gap and Forever 21 use franchises in other South American countries as a learning curve/springboard into Brazil. And, as such, these countries are now starting to see benefits themselves.


being talked about. For instance, when talking about the hot European markets, despite their maturity, London, Milan, Paris, Madrid, and Barcelona are identified – not their countries. As well as the countries detailed


below, the 2012 AT Kearney Global Retail Development Index, which ranks the top 30 emerging countries on factors such as assessment of risk, population size, wealth and current retail saturation, included Georgia, Oman, Mongolia and Azerbaijan, for the first time.


Parts of this feature first appeared in AsiaProperty magazine


Just looking at the country’s GDP per capita is enough to prove “Vietnam is definitely under-supplied in terms of retail,” says Knight Frank’s head of Asia research, Nicholas Holt. The country is one of the fastest-growing economies in Asia, with around 7% compound annual growth rate for the past five years. But, says Holt, “It is still quite a poor


country. GDP per capita is £1,000 a year – it is the lowest in Asia.” But investors are looking at Vietnam,


and in particular its capital, Ho Chi Minh City. “There is definitely room to grow,” says Holt, who points out that French firm Big C is already in the country, as is Singaporean company Mapletree Investments, which has developed in Ho Chi Ming City. On its official website, Mapletree says:


“[We] consider Vietnam an important key emerging market in Asia as its competitive cost structure and large and growing population presents attractive growth prospects.”


42 Summer 2013 www.estatesgazette.com


UK favourites such as River Island and Debenhams are looking to emerging markets overseas


RIVER ISLAND


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