International Retail Real Estate in 2022

Investors can rent, lease, manage, purchase, or sell retail real estate for a variety of uses, including pop-up shops, retail malls, and individual stores. Retail stores are located internationally which include anything from grocery stores, cafes, along with food and beverage.

Commercial real estate has experienced success in 2022 despite rising interest rates, with the possibility of additional increases in the near future. Although forecasts for different asset classes vary, the industry's prognosis as a whole is still favorable going into the second half of the year.

In heavily populated residential areas, strip malls are performing well. The great performance is mostly due to the grocery stores, salons, fast-casual restaurants, and other retailers delivering in-person services. As the retail industry changes, more shopping centers may be occupied by walk-in MRIs, COVID-19 testing facilities, healthcare providers, and other tenants outside of traditional retail categories.

However, the retail sector's economic comeback has come as a welcome surprise, with rising sales occurring despite dwindling consumer confidence. Foot traffic at retail malls has fully returned to 2019 levels, notably in the open-air category, according to a retail analytics company. 

For example, in 2022, a leading global Real Estate company, CBRE anticipates to embrace growth strategies within the retail sector. 

1. Establish partnerships between e-commerce and conventional retail companies.

Retailers are collaborating with e-commerce businesses to broaden their product offers, frequently through branded kiosks or department store locations.

2. Apple store strategies to supply chain issues.

Physical stores will play a bigger part in the supply chain in 2022 since the last 50 feet of the logistics journey continue to be one of the most expensive. Expanding their in-store return capabilities will help merchants with physical locations stand out from others who just operate online. This will make it simpler for customers to return items.

3. Support ESG in the retail industry.

In terms of ESG metrics, the retail industry is generally functioning well. More than 1,200 real estate organizations, REITs, funds, and developers from around the world were graded on their ESG implementation for the 2021 Global Real Estate Sustainability Benchmark (GRESB). Eight of the 11 retail-focused REITs that GRESB is monitoring saw an increase in scores last year.

For instance, another world-wide retail Real estate company, Unibail-Rodamco-Westfield has a roadmap for 2024.

In 2022, URW anticipates tenant sales to return to pre-COVID levels; in 2023, occupancy and variable income are anticipated; and in 2024, full implementation of retail NRI is anticipated. For its simplified European business in 2024, the Group projects Retail NRI of €1.56 billion and EBITDA of about €1.9 billion.

Prior to the 2024 Paris Olympics, the Group's Convention and Exhibition business is anticipated to continue to improve in 2022 and return to normalized levels in 2023. The full leasing of recently finished projects as well as fresh deliveries will be advantageous for URW's Offices business.

With 550 million yearly visits in 2021, URW's unrivaled European portfolio offers a singular platform to produce significant new revenues from advertising, brand experience, and analytics by converting qualified audiences highly sought by businesses. Through focused, sustainable mixed-use development with a focus on residential options, URW will reveal untapped asset potential. With an unmatched portfolio of assets in the best cities, it also leads European retail.

Information from analysis of Business Wire (Berkshire Hathaway Co.)

Despite the disruption caused by the COVID-19 pandemic, the retail real estate industry had tremendous expansion, which was fueled by the digitization of work, the restructuring of physical retail, and a push towards environmental, social, and governance (ESG) factors. Additionally, the retail industry is facing numerous difficulties from the e-commerce industry and shifting consumer behavior due to the epidemic. Despite these difficulties, the industry persevered since, in pandemic, e-commerce sales made up only 14% of total retail sales.

Furthermore, developers are concentrating on various tactics in order to match consumer demand and adapt to the evolving retail environment. For instance, repurposing shopping complexes, adjusting tenant mix, and creating new lease models to draw the newest business models.

Additionally, some retailers are growing their businesses using omnichannel techniques, such as click-and-collect, curbside pickup, and ship from store, in order to meet consumer demand.

Additionally, the Asia-Pacific area saw the greatest gain in retail sales, followed by the United States and Europe. Retail sales increased across a variety of industries, including in-store sales, groceries, clothes, department shops, restaurants, and bars. Where in-store retail experienced the largest revenue growth between 2019 and 2021.

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Published in : Commercial Real Estate, Market Studies, REITs, Tops   By : Rock & DATA   On : October 2, 2022



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