EDITOR'S LETTER: Keeping an open mind on retail

Despite the sharp drop in retail investment across Europe this year, it is not all doom and gloom in the sector, writes editor-in-chief Robin Marriott.

In this latest issue of PropertyEU, CBRE’s head of EMEA retail capital markets makes a plea. Within our cover story on retail investment, Chris Gardener says eventually sense will prevail over sentiment: ‘The hope is that people look into retail with a rational mindset again,’ he says.

He makes that statement in reaction to why so many have turned their backs on an asset class that is two years into a crisis with regard to bricks-and-mortar retail. CBRE says retail transactions in continental Europe dropped by 33% in the first nine months of 2019 after plummeting by as much as 40% in H1.

However, it is not all doom and gloom. Our reporter Virna Asara highlights not only the dramatic downturn that has taken place, but also explains the pockets of activity where the mood is brighter.

And Gardener is quoted: ‘A year ago investors wouldn’t even look at this segment, while today they are prepared to engage with certain types of retail, so all in all the mood is more positive. I wouldn’t say there is huge appetite for retail yet, but investors have become more tolerant towards the sector than they were 12 months ago. They are willing to enter into sensible conversations.’

Some investors are more comfortable investing in Central and Eastern Europe because e-commerce penetration is lower in that region. Others like German retail, and in particular grocery shopping.

Incredible as it may seem, there is even a market – albeit a very small one – for UK shopping centres. Indeed, I recently spoke with one of the few foreign investors which are currently buying into shopping centres in the UK – Tikehau Capital. The French asset manager has a reputation for being a bit of a maverick, and last year acquired a shopping centre in Maidenhead.

So, it was no surprise to see it back with another purchase last month – this time in Orpington, Kent, south east England.

Put simply, the company says that at a local level there is opportunity in the mismatch between the population of this Kent town, its good transport connections and the lower level of retail provision.

It plans to consult with the local council to see if they can share a common vision and interest in redeveloping the existing Walnuts centre. That is certainly keeping an open mind and I wish Tikehau the best of luck in this project.

There is plenty on the retail sector in this issue – and a whole lot more besides. I hope you enjoy reading it.


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