The UK leads the way as most popular destination for retailer expansion in 2017
The UK has taken the top spot as the most popular destination for retailers looking to expand their store presence in Europe, the Middle East and Africa (EMEA) in 2017. 65% of retailers surveyed cited the UK as their target market for expansion, according to the latest research from global property advisor, CBRE.
The core markets of Western Europe are top of retailers’ agenda as the most popular destinations for expanding their store network in 2017, despite the political and economic uncertainty in Europe. The UK leads the way as the most attractive retail market in the region and is closely followed by France (43%) Germany (38%), UAE (24%) with Spain, Netherlands and Hungary attracting 19% of respondents, to make up the top five most popular markets for retailer expansion.
CBRE’s research report - How Active are Retailers in EMEA? - found that 51% of international retailers surveyed intend to open up to five stores across EMEA by the end of 2017. However, the amount of retailers with large-scale expansion plans in 2017 is expected to slow down with 70% of retailers indicating that they expect to open 10 stores or less, reflecting a more cautious approach to their growth plans. Street shops and regional shopping centres remain the most popular formats for expansion with over 80% of retailers choosing these methods of growth.
The survey also found that the biggest concerns for retailer expansion in 2017 are real estate cost escalation which was cited by 57% of retailers. This was closely followed by lack of quality retail space (51%).
Retailers are staying committed to opening new stores. However, finding quality retail space in the right location remains a challenge and there is little expectation from retailers that this lack of quality space in key Western markets is likely to decrease in 2017. The bankruptcy of V&D last year offered new opportunities for retailers to enter the Dutch market. More than half of these 62 stores have been successfully rented to, a.o., Hudson’s Bay and Topshelf. We expect more international retailers to follow suit. Retailers with a clear positioning have a lot of potential, just like some new F&B formats. Taco Bell recently opened its first establishment in Eindhoven and are planning to open more restaurants. We are involved in their ambitious rollout in The Netherlands.
The survey also revealed that 81% of the retailers believe that the growth of online retail will not deter from their physical store expansion plans in Europe. Whilst a small number of retailers believe that the internet will reduce the need for a large store network, they also believe that changes in consumer shopping will allow retailers to generate the same level of sales with fewer stores. This highlights that the role of the physical store is changing, with more stores being used as an opportunity for brands to display experiential retail.
When it comes to investing in digital technology to improve customer service 78% of retailers have, or are looking at, implementing an integrated store and social media platform. Whilst, 58% of retailers agreed (strongly agreed or agreed) that the use of in-store technology is growing in importance. More surprisingly, a third of retail brands indicated that they have or are looking at implementing interactive displays and fitting rooms, a trend that looks set to be popular in 2017.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.