The new Catella Market Tracker “European Retail Markets – Investors’ favourite facing a transformation” shows the increasing pressure on European retail formats from e-commerce. But countries such as the Nordics, France and the UK are evading this negative trend.
Examining the transformation of shopping centres shows that traditional retail space is being continuously replaced with food service and event space, in new buildings and, particularly, in the refurbishments being made by value-add investors.
The largest distortions can be found in the textile trade, which suggests that not all products are affected in the same way. “Conversely, grocery stores are experiencing strong interest at many shopping destinations, with a large range of products and high-quality presentation, making in-store shopping attractive again,” says Dr. Thomas Beyerle, Head of Group Research at Catella.
The results of the new Catella shopping centre Ranking show
– The Nordics (Sweden, Finland, Norway and Denmark), the UK and France lead the ranking
– With a density of approximately 900 square metres per 1,000 people, Norway provides the best coverage of shopping centres across Europe.
– The retail turnover index shows that most of the European retail market is flourishing, and that it displays stable growth rates in the UK, Sweden and France.
From the investor perspective, Beyerle concludes that, “Independent of the structural shift in retailing, the established stock of shopping centres in the top-ranked countries combined with an estimated undervaluation of rents to offer investors an opportunity in retail to generate decent yields through moderate capital investment.”
The market place concept will remain the leading shopping destination, be it a European city centre or simulated in a shopping centre. Structural distortions stem from a lack of innovation and underestimation of the expected consumer digitalisation.