Expect retail to regain popularity as an asset class especially in tourism-led locations, Colliers International said at MIPIM 2019. Whilst logistics has benefited from the growth in e-retailing, there are signs that is has hit maximum penetration across Europe. In the meantime, pure-play retailers are resorting to omni-channel strategies to survive and deliver profits. This has put the onus back on the need for retail space supported by modern logistic facilities.
Colliers analysis indicates that the rate of online retail sales growth is slowing as markets reach higher levels of online penetration and by 2022-2025 online growth is expected to fall in-line with traditional retail sales.
Damian Harrington, head of EMEA research, Colliers International, said: “Retail as a sector has had one hell of a negative ride over the past few years. The rapid growth of e-commerce and online retailing has benefited the logistics sector to date, but retail is starting to fight back.
“Pure online retailers do not generate high profit margins, but omni-channel retailers are the exact opposite. The big retail brands have to take on retail space to help drive sales because having a better store presence builds their brand and actually delivers higher levels of online sales.”
“Destination centres will continue to deliver results and are highly defensive assets. These experiential hubs combine a strong retail mix with food and beverage, and leisure facilities. They encourage dwell time and appeal to both local visitors and the tourist markets in terms of paying customers.
“There are solutions for high streets and town centres, but it requires a joined-up mixed-use, mixedtenure management of assets thet incorporate flexible pop-up events, leisure, F&B, residential and community needs. Whole locations need to be digitised and omni-channel, not just individual assets, with strong public realm to bring life back to town centres.”