RESEARCH The recent CBRE research report interrogates the resilience of retail assets, assesses growth areas and advises how landlords can future-proof their assets to ensure they remain resilient, despite changing consumer demands and broader economic challenges.
RETAIL THERAPY: Shopping for resilience in retail property
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ast mile retailing, showroom style shopping, Click & Collect, customer analytics technology, food deliver y offerings and flexible leases are set to become the hallmarks of resilient retail assets. This is a key takeaway of CBRE Research’s new report: Retail Therapy – Shopping for Resilience in Retail Property, which looks at how landlords can future-proof their assets to ensure they remain resilient despite changing consumer demands and broader economic challenges. The report provides an overview of retailers that are expected to experience growth in floorspace requirements, the potential uplift to MAT (Moving Annual Total) by incorporating mixed-use development in traditional retail assets and what practical measures landlords can implement to ensure they remain relevant to changing consumer needs. As retailers in larger centres reduced department store and large-specialty store floor space – conserving costs and catering for increasing ecommerce demand – the opportunity existed for centre owners to reinforce the original retail recipe with the introduction of mixed-use offerings. Incorporating mixed-use into a precinct can help drive spending with office and education offerings providing the greatest increase in centre MAT growth. 68 SCN
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MEAGAN WAKEFIELD Regional Director of Retail Services, CBRE
KATE BAILEY Head of Retail Research, CBRE
Figure 1: Selected A-REIT cap rate compression and cumulative impact on value since June 2015 Source: CBRE Research
According to the report, a 10,000m2 office space could provide an additional $3 million per annum in centre MAT, while a 10,000m2 education facility could see an additional $2.2 million per annum in MAT.
A strategic floorplate reconfiguration, converting underutilised retail space into an attached ecommerce-driven distribution centre could benefit not just the store in reducing its footprint, but also other stores in the centre. Online retailing and the growth of ecommerce is fuelling an overall net increase in commercial property space. Landlords can capitalise on this demand
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16/11/20 12:55 pm
