MAIN THREAT FELT BY RETAILERS
1= biggest threat
Economy
2.6 3
RETAIL SALES GROWTH IN EUROPE Average change by region
-10 -8 -6 -4 -2 0 2 4 6
Dec 09 Jun 10 Dec 10 Jun 11
longevity of a fashion range but also, for example, store design and branding. As more and more retailers try to
reinvent themselves in response to these pressures, many are looking to change their store portfolio through bigger or smaller units, new locations or different formats. With such moves often constrained by
cost, rent remains very much under the microscope. However, while many retailers are cutting back, demand is firm and supply is short in the best streets and shopping centres. Even in the more stressed areas,
successful retailers are looking to take advantage of their position. We are also seeing an increased flow of foreign retailers as many seek to grow and diversify internationally. As a result, prime rents in Europe
Dec 11 Jun 12 Dec 12
continue to push ahead, rising 3.7% in the year to March and by an annualised 10.2% in the opening quarter of 2013 alone. This move is being led by the prime thoroughfares of Paris, followed by Moscow and London. Overall, 20 of the 32 countries monitored recorded an increase in prime rents. Looking ahead, retailers in most areas
will continue to change unit sizes and cut the scale of their network to focus on bigger and better stores. As a result, the availability and viability of secondary property will remain under pressure. The top locations will get even
stronger, particularly in the most dominant and best “branded” cities and shopping centres, while neighbouring and well-placed local markets will continue to benefit from the growth in discount retailers and demand for
CEE South North/West
4 Competition Source: Cushman & Wakefield 4.1
convenience and click-and-collect facilities. In response, prime rents will increase further, and not just for the biggest cities, but for any retail market that offers shoppers a compelling reason to be there. In the mid-ground however, as
retailers downsize and renegotiate, pressure on rents will increase, pushing them low enough to encourage new blood into the market. Therefore, experimentation,
personalised services and simple economics will be the hallmarks of success for retailers and property owners in the future, and also for the public sector as it looks to encourage growth and employment.
David Hutchings is head of the European Research Group, Cushman & Wakefield
Summer 2013
www.estatesgazette.com 47
3.1 E-tail
4 Increased costs
Store network Consumer
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