Selective retailer demand as landlords look to differentiate themselves

Retailer demand remains selective and directed towards existing stronger-performing stores in many markets, as various traditional retailers continue to downsize store portfolios. This is leading landlords to look for new ways to differentiate themselves, while opportunities for smaller retailers are emerging as newly vacated space becomes available.




U.S. retail market slows, while store closures present opportunities for smaller retailers

The U.S. retail market has been showing signs of a slowdown as fundamentals soften. The pace of demand has decelerated, although rents have been rising as construction remains constrained. As some big-box retailers close their doors, smaller retailers – including ‘mom-and-pop’ stores, medical offices and gyms – are being presented with opportunities to grow, while there has been a flurry of demand for some of these locations from ‘off-price’ retailers, home furnishing stores, grocery stores and real estate companies.

Find out more about how the US retail market is responding to the structural changes in the sector - A New Mall Rises - Retail centres renovate, redevelop and re-tenant to remain relevant




Strengthening employment market remains a key driver for spending growth in Europe

In Europe, real wages are picking up and are expected to grow at their fastest rate for a decade in 2018. With consumer confidence levels near an all-time high, the retail sales growth outlook remains positive. While some traditional retailers such as department stores downsize, others – including value operators, health & beauty stores, furniture and homeware stores, and leisure operators – are looking to grow their footprints. Retailer demand for prime space continues to be selective with Budapest, Paris and Prague seeing high street rents grow more than 5% year-on-year.




Landlords in Asia Pacific continue to look for new ways to differentiate

Retailers remain cautious towards store expansions in Australia, given the subdued retail sales environment, and are focusing on existing stronger-performing stores. F&B, kids’ brands and activewear players are key drivers of demand in China, while Hong Kong continues to rebound on the back of robust tourism and domestic consumption.

Limited Q2 rental growth was recorded in most markets, including Australia. Rental increases in the decentralised submarkets of China’s Tier 1 cities continued to outperform the core markets, while overall mall rents in Hong Kong edged up, supported by better sales at select premium and tourist-oriented malls.

To find out more about the leading retail locations in Asia Pacific, download our latest Retail Guide.




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