Retailers and landlords focus on innovation

Retailers and landlords are continuing to experiment with new formats and uses for space as competition for consumer attention and expenditure intensifies. Many retailers are focused on improving their omni-channel retail offer, with some now using stores as cost-effective delivery hubs, while others are investing in robot-driven smart warehouses and self-driving cars for local deliveries.




U.S. market continues to adapt while buffeted by change

Several major trends loom large for the U.S. retail sector this year: wellness, shorter lease lengths, personalisation, last-mile logistics and the growth in augmented and virtual reality (AR/VR). In terms of average lease lengths, those for general retail shops and apparel stores in particular have contracted markedly over the last decade. Underscoring this move to shorter leases, pop-up stores continue to be appealing, representing a low-risk way for retailers to experiment with new types of products, technologies and services, while boosting their brand. At the same time, some retailers are now using their stores as cost-effective delivery hubs.




Europe's retail sales rebound as consumer confidence returns

Confidence among European consumers improved during the first quarter following a sharp decline towards the end of last year which impacted consumer spending. Continued strengthening of labour markets and wage growth is expected to fuel consumption and retail sales growth over the next two years, with retail sales across the EU (28 countries) forecast to grow by 2.1% in both 2019 and 2020. European non-food retailers remain focused on right-sizing their store portfolios and improving their omni-channel retail offer to meet changing consumer shopping requirements. While prime retail rents held stable in most markets across Europe during the quarter, notable growth in prime high streets was observed in Budapest and Istanbul.




A focus on tech-driven services in Asia Pacific

Catering to a growing number of tech-savvy consumers, landlords and retailers are maintaining a focus on tech-driven services to enhance the customer experience in China, with leasing activity driven by F&B and sportswear brands in Tier 1 markets. Market conditions appear to be firming in Singapore, supported by improved business confidence. Challenging market conditions in Australia have seen most retailers maintain a cautious stance with their attention mainly on existing stores. Meanwhile, diverging rental performances persist in markets across the region.




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