SECTOR REPORT RETAIL MARKET

Transcription

1 SECTOR REPORT RETAIL MARKET UPDATE AUTUMN

2 22 DEMAND Positive sentiment holds sway in retail: the favourable economic climate is making consumers feel positive. With confidence in the economy and good employment, more money is being spent on the high street. As a result, purchasing power is increasing. Since 2016, all the main sectors (see chart) have displayed accelerated turnover growth. This development is expected to continue in the years to come. More expansion due to increase in confidence among businesses: we see this in the take-up (which has been achieved) and in companies growth ambitions. For example, Primera recently announced that it plans to open another 100 new branches in the Netherlands. Retail acquisitions likely to happen soon: the HEMA department store chain is currently up for sale. As a result of a strategic reorientation, the investor Lion Capital is looking to sell the chain. This year, various media outlets have reported that Blokker Holding is very close to buying several formulas. Investor Alteri has been mooted as a buyer for Intertoys, which includes Bart Smit and Toys XL. Alteri will reportedly seek to strengthen the chain s position in the online market. Increase in international retailers: the number of stores operated by foreign retailers has increased dramatically over the past ten years (by as much as 60%). Amsterdam is far and away the most popular location, followed at some distance by cities like Rotterdam, The Hague, Maastricht, and Utrecht. We are also seeing ever greater internationalization in the hospitality industry. SUPPLY Fall in vacancy rate accelerating: as a result of take-up and removal of properties from the market, the vacancy rate fell to 7.4% in late The current vacancy rate is 7.0% of stock. Wave of bankruptcies over, but possibility of surprises remains: in mid 2017, we observed that not all retailers are benefiting from the economic recovery. Whereas it was thought that the wave of bankruptcies in retail was at an end, this has not proved to be true for all businesses. Doniger Fashion Group, the parent company of clothing chains McGregor, Gaastra, and Adam, was declared bankrupt last September. PRICE Market rents stable: despite the positive signals from the sector, we observe that shop rents at prime locations in many large cities are still sluggish. In the big cities, we saw shop rents remain firm in the years of the economic crisis in particular, and as a result it is not yet time for an upward correction. Another factor is that, in the big cities, many developments have been completed in recent years (for example, the Nieuwe Haagse Passage in The Hague) or are underway (such as Hoog Catharijne in Utrecht and Forum Rotterdam). This is resulting in an increase in supply and is having a damping effect on potential rental increases at prime locations. Falling yields at prime locations: there remains strong demand for retail units at prime locations. Yields have been falling in the prime shopping streets of the most popular cities for shopping such as Amsterdam, The Hague, Utrecht, and Maastricht. In Utrecht and Eindhoven we expect a further fall in yields in the prime shopping streets over the next six to twelve months. INCREASE IN CONFIDENCE AMONG BUSINESSES CONTRIBUTES TO GROWTH IN EXPANSION PLANS AMONG RETAILERS.

3 23 STOCK OF RETAIL SPACE VACANCY OF RETAIL SPACE TURNOVER DEVELOPMENT RETAIL INVESTMENT VOLUME (EUR) RETAIL SPACE

4 24 MARKET RENTS AND YIELDS PRIMARY LOCATIONS Q Q Q EXPECTATIONS Amsterdam Prime high street yield (GIY) 4.20% 4.10% 3.75% Prime high street rent 2,900 2,925 3,050 Rotterdam Prime high street yield (GIY) 5.00% 5.00% 5.00% Prime high street rent 2,000 2,000 1,800 The Hague Prime high street yield (GIY) 5.25% 5.25% 5.00% Prime high street rent 1,525 1,550 1,500 Utrecht Prime high street yield (GIY) 4.60% 4.60% 4.50% Prime high street rent 1,475 1,475 1,500 Eindhoven Prime high street yield (GIY) 5.00% 5.00% 5.25% Prime high street rent 1,450 1,450 1,350 Maastricht Prime high street yield (GIY) 4.60% 4.60% 4.50% Prime high street rent 1,700 1,725 1,650 Explanation Prospects user markets (coming 6 to 12 months) ( growth, decline, stable)

5 25 VISION AND EXPECTATIONS More pronounced polarization: the contrast between winners and losers is becoming ever more pronounced. The most popular shopping cities (including the G4) are among the absolute winners. Many local shopping centres and the larger strips of furniture retailers are also performing well. Local shopping centres have had a tough time over the past decade, but are recovering. Many small and medium-sized town/city centres that have failed to differentiate themselves are still struggling. This is because they have too little to offer potential visitors besides shopping. From retail to experience and hospitality: consumers expect more and more entrepreneurship, service, experience, and entertainment. For this reason, retail districts need to continue to innovate, preferably based on the international model. Shopping centres that are investing heavily in experience and hospitality include Hoog Catharijne and Stadshart Amstelveen. The planned Mall of The Netherlands (opening in 2019) is also developing in this direction. In addition to a balanced offer of retail with a food court and entertainment, basic facilities such as adequate and free parking are being provided to a high standard. Ceiling height and finish quality also help to define a shopping centre of international standing. Data and visualization are increasing in significance for retail: retailers are starting to make more use of new technologies, including augmented reality. Albert Heijn and IKEA are already experimenting with this with their own apps. The Albert Heijn app is all about providing additional product information, while IKEA s shows consumers what furniture will look like in their homes. There are opportunities for fashion in this area too, such as virtual fitting rooms for different garments.

6 SERVICES A Etienne van Unen Partner Director Retail Co Head EMEA Retail etienne.vanunen@colliers.com CM Ricardo Bergsma Director Retail Capital Markets Director High Street Leasing ricardo.bergsma@colliers.com V Marco van der Wal Senior Valuer marco.vanderwal@colliers.com AS Joost Vooijs Partner Director Asset Services joost.vooijs@colliers.com AS Cor Eschmeijer Director Property Management Retail cor.eschmeijer@colliers.com AD Frans Merks Head of Development frans.merks@colliers.com R Bart Stek Head of Research bart.stek@colliers.com A AGENGY CM CAPITAL MARKETS V VALUATIONS AS ASSET SERVICES AD ASSET DEVELOPMENT R RESEARCH, Amsterdam 2017 Except for the exceptions stipulated in or pursuant to Dutch copyright law, none of the contents of this publication may be reproduced by way of printing, photocopies, automated data files, the internet or in any manner whatsoever without the prior written consent of Nederland. The authors have made every effort to ensure that the publication is as reliable as possible. Nevertheless, they cannot accept any liability for any inaccuracies that may appear in it.