The retail real estate industry is in a ‘Renaissance’ not ‘Armageddon’, Bill Kistler, the International Council of Shopping Centres’ (ICSC) executive vice president & managing director – EMEA, told delegates at the organisation’s annual event in Barcelona on Wednesday.
Kistler also said during the first session of the day that the industry is not ‘asleep at the switch’ amid big challenges facing retail real estate, and that he wanted to paraphrase Mark Twain in saying, ‘Rumours of retailers’ demise are greatly exaggerated'.
‘We see the headlines about retailer closures, and more importantly so do the bankers and consumers who might assume the end is nigh. But what we are seeing is being felt in other industries and in other real estate sectors more broadly. It is happening in the hospitality sector with Airbnb and in the office sector. Technology is disrupting the real estate industry across the board. And it’s a challenge. But I think as an industry we have seen incredible innovation. I've seen companies that have been doing things pretty much the same way for decades reinventing themselves and rethinking their business model.’
He added: ‘It's not like we're asleep at the switch. There are clearly retailers who are going out of business, perhaps who underestimated the impact of e-commerce at their peril and didn't adapt fast enough to the clicks and bricks and omni channel and all these other strategies. But I think what isn't getting press attention is the innovation, reinvention and Renaissance in the industry. So, I would argue that we are in the midst not of an Armageddon, but a Renaissance. It’s very exciting. I think for most of you that's what keeps getting you out of bed in the morning and facing the challenges every day.’
Kistler was responding to Peter Wilhelm, ICSC European chairman and CEO of Wilhelm & Co, who had been asked to present arguments that would support an Armageddon-view of retail real estate.
Wilhelm highlighted retailers’ profit margins were shrinking, that the retail real estate industry tended to move more slowly than others and that local politicians did not really understand how serious the situation was. Wilhelm also spoke of ‘clear unfair practices’ and different treatment for e-commerce.
‘We just need to have a level playing field,’ he said.