CEE RESEARCH RETAIL REPORT 2017

Transcription

1 CEE RESEARCH RETAIL REPORT 7

2 TABLE OF CONTENTS MACROECONOMIC OVERVIEW RETAIL MARKET INSIGHT HOW ACTIVE ARE RETAILERS INVESTMENT MARKET INSIGHT CBRE SHOPPING CENTRE INDEX KEY CONTACTS

3 MACROECONOMIC OVERVIEW Growth in the CEE region continues to boom in the second quarter. GDP expanded.% annually in Q, slightly above Q s.% increase and the best result for the past quarters. The main drivers of this growth are tight labour markets, reviving investment and booming activity in the Euro area which is the predominent trading region for CEE countries. Looking at individual economies, GDP expanded at the fastest pace since Q in the, thanks to rising wages, a strong car manufacturing market and growing overseas demand. In addition, GDP also expanded at a rapid pace in Romania and in Poland, however, on the contrary, growth slowed slightly in Hungary. Unemployment rates have fallen significantly across the region. The lowest unemployment rate in CEE (and indeed in the EU overall) is currently in the where it decreased to.9%. Despite some remarkable gains, labour market tightness is already posing supply-side constraints for producers. Inflation in the CEE region has hovered at around.% over the course of this year, despite ultra-loose monetary policies across the region. The only exception is the where the rates increased by bps in Q 7. Poland has postponed the process probably until the end of, Hungary in mid Source: Oxford Economics, August 7 GROSS DOMESTIC PRODUCT GROWTH IN 7 (in %) Poland Bulgaria Lithuania Estonia Latvia Eurozone Russia Romania Hungary Slovakia Croatia EU Austria Hungary Romania Russia Bulgaria EU Latvia Croatia Poland Austria Estonia Lithuania Slovakia Eurozone Source: Oxford Economics, August 7 UNEMPLOYMENT RATE IN 7 (in %) % EUR Retail spend in core-cee went up by.% in and growth rates are still substantially above Western European levels. Prime rents of shopping centers are solidly growing and their investment yields have reached an all-time low. Nevertheless, professional owners are constantly improving the quality of their shopping centers. They are setting the bar when it comes to consumer, retailer and investor expectations. In our daily work we feel an increasing pressure on shopping center owners to create prime locations in order to stay in the game. 7 7,,,,,,, Source: Oxford Economics, August 7 RETAIL SPENDING PER CAPITA & RETAIL SPENDING GROWTH IN 7 Walter Wölfler Head of Retail Austria & CEE Poland Hungary Slovakia Latvia Lithuania EU Austria Romania Estonia Croatia Bulgaria Eurozone Russia Retail spending growth in 7 (in %) Retail spending p.c. in (in EUR)

4 R E TA I L M A R K E T I N S I G H T H O W A C T I V E A R E R E TA I L E R S Poland and Romania have the highest retail spending growth in the Central and Eastern Europe (CEE) region with forecasted increases above.% y-o-y in 7 (Aug 7, Oxford Economics). The lowest increases, both below.% in 7, will be in Austria and Russia. The average growth for the whole region is expected to be.% y-o-y and.% y-o-y in 7 and, respectively. NEW RETAILERS ENTRIES BY COUNTRY In H 7, new shopping centres were opened in 7 of countries in the CEE region. In total more than, sq m of new shopping centre space was delivered to the market of which almost 7% was completed in Russia. The total volume of shopping centre space under construction in H 7 in the CEE region reached almost. million sq m. The largest absolute volume is recorded in Russia, followed by Ukraine, Poland and Serbia. Ukraine and Serbia also had the highest relative figures with space under construction accounting for more than % of total stock. Four countries in the CEE region had no ongoing developments in H 7. The prime rents of shopping centers are solidly growing in most Core-CEE countries. The highest annual growth with more than % y-o-y was in Slovakia and the. In all markets we are seeing a widening spread between rents in prime and secondary shopping centres. PRIME RETAIL RENTS ( E U R / s q m/ mo nt h) H IG H STRE E T Hungary Poland Romania Bulgaria Croatia Estonia Latvia Lithuania Russia Serbia Austria S H OPPIN G CE N TRE KEY INDICATORS WITHIN CEE RETAIL MARKETS Purchasing power per capita ESTONIA AUSTRIA CROATIA Shopping centre density per capita LITHUANIA CZECH REPUBLIC HUNGARY BULGARIA ROMANIA - LATVIA RUSSIA SERBIA Space under construction as % of total stock UKRAINE YoY Hungary Poland 9 Romania Slovakia Bulgaria Croatia Estonia 7 Latvia 7 Lithuania Russia Serbia Ukraine 7 Austria Source: CBRE Research; Q YoY Source: CBRE Research, % OF THE RETAILERS WHICH ENTERED THE CORE-CEE COUNTRIES CHOSE TO ENTER IN PRIME LOCATIONS MOST ACTIVE RETAILERS ARE ORIGINATING % % NEW BRANDS ENTERED THE MARKET IN THE HIGHEST INTEREST HAD MID RANGE FASHION AND LUXURY & BUSINESS BRANDS RETAILERS % % % % NEW STORES OPENED

5 INVESTMENT MARKET INSIGHT PRIME SHOPPING CENTRE YIELDS IN HISTORICAL CONTENT (in %) PRIME HIGH STREET YIELDS IN HISTORICAL CONTENT (in %) 9 7 Hungary Romania Bulgaria Estonia Lithuania Serbia Austria Poland Slovakia Croatia Latvia Russia Ukraine Current Yield Y low Y high Hungary Bulgaria Estonia Russia Austria Romania Croatia Lithuania Serbia Current Yield Y low Y high Source: CBRE Research; Q 7 Source: CBRE Research; Q 7 RETAIL INVESTMENT VOLUME BY INVESTORS NATIONALITY 7 % South Africa % Russia % % Germany Source: CBRE Research, - Q 7 9 % USA 9 % United Kingdom % Other RETAIL INVESTMENT VOLUME BY INVESTORS NATIONALITY (CORE-CEE) Retail shopping center yields are at their year lows in the core CEE markets. The difference with the last top of the cycle of 7 is that we are surpassing the previous record volume. 7 is looking to beat the record and the rolling quarters up to the half year in 7 amount to EUR.9 bln., which is also a record. With interest rates still at a record low we expect that the current cycle will set new record low yields in the core CEE markets of Poland, Czech, Hungary, Slovakia and Romania. The limited availability of stock, the fact that a significant proportion of major centers have already traded this cycle will further drive yields. The continued low interest environment will keep investors tuned into our sector. International investors continue to be bullish on shopping centers and the high street in CEE. South African investors continue to be competitive across CEE and SEE and are now driving the market in Bulgaria as well. Czech investors are competitive in the and increasingly so in Slovakia and Poland. American private equity is most active in the Baltics. We expect more activity also from institutional buyers in Russia in the coming year. Austria is taking advantage of its proximity to Germany and has the sharpest yields in the region. All the above applies to the high street as well with an even more limited availability of stock as investors are long term holders and a number of institutional and shopping center investors are now competing for high street property. RETAIL INVESTMENT VOLUME Investment Volume (EUR mln),,,, % South Africa % % Germany Source: CBRE Research, - Q 7 % United Kingdom % USA % Other Rolling Quarters (EUR mln) 7,,,,,,, Anthony Selman Head of CEE Investment 7 Q Q Q Q Q Q Q Q Q Q Q Q Q 7 Q 7 Hungary Poland Romania Slovakia Baltics BG, HR, RS, UK Russia Rolling Quarters CEE Source: CBRE Research

6 CBRE SHOPPING CENTRE INDEX U n iq u e b e n chm ark to o l Ba sed o n w h i ch t h e per f o r m an ce o f shop p ing centres ca n b e jud ged The CBRE Shopping Centre Index analyses rental levels and turnovers, as well as rent to sales ratios, average baskets, level of vacancy and footfall for a typical regional shopping centre in the, Poland and Slovakia. Understanding our portfolio fundamentals is essential to the complex real estate advice we provide to clients across CEE region. The results of the CBRE Shopping Centre Index reflects trends for the regional shopping market as a whole. The performance of each specific project is influenced by the macroeconomic situation of the region as well as the ongoing competition for customers amongst existing shopping centres. The ongoing positive sentiment on the market influenced by macroeconomic outcomes which are reflected in the level of turnovers, which grew in both the and Slovakia by more than %. Rental levels were more volatile in Slovakia, where they increased only margainlly by.%. Further increases in footfall were mainly driven by the higher frequency of visits. WHERE INFORMATION, ANALYTICS AND DEEP UNDERSTANDING COME TOGETHER TO REVEAL MARKET TRENDS WHERE IDEAS BECOME ACTIONS AVERAGE SHOPPING CENTRE RENT i n ( E U R / s q m/ mo nt h) AND ACTIONS DIRECTLY IMPACT 9 BUSINESS SUCCESS 7 WE CALL IT Poland* Slovakia AVERAGE SHOPPING CENTRE TURNOVER i n ( E U R / s q m/ y e a r ),,,,9,,7 Poland* Slovakia RETAIL SCIENCE * Entertainment and groceries are included in the CBRE Shopping Centre Index Poland. The methodology of CBRE Shopping Centre Index and Slovakia 7 excluded supermarkets, hypermarkets, cinemas, bowling alleys, casinos, children s corners and car wash. AVERAGE SHOPPING CENTRE SIZE Average Rent to Vacancy Rate Sales Ratio in in CZECH REPUBLIC.% 9.%.%.% %.% Average Footfall in CBRE NUMBER IN CEE MORE THAN RETAIL PROPERTIES UNDER MANAGEMENT MORE THAN RETAIL EXPERTS CZECH REPUBLIC, MORE THAN, RETAIL LEASING DEALS DONE LAST YEAR, 9, (sq m ) CONTACT US: WALTER.WOELFLER@CBRE.COM, ANTHONY.SELMAN@CBRE.COM Source: CBRE Research, CBRE shopping Centre Index 7 9

7 KEY CONTACTS CEE Walter Wölfler Retail Austria & CEE, Retail HUNGARY Gábor Borbély MRICS Director, Business Development and Research Anthony Selman CEE Investment Properties, Capital Markets Joanna Mroczek Senior Director, Head of Research & Marketing AUSTRIA Andrea Buchegger Associate Director, Research ROMANIA Marius Ene Valuation & Advisory BALTICS Vineta Vigupe Director, Research & Consulting RUSSIA Mikhail Titov Associate Director, Research BULGARIA Rosen Grigorov, CFA Deputy Manager, Advisory Services & Valuations SERBIA Tamara Kostadinovic Head of Market Research CROATIA Emina Cuturilo Valuation & Advisory Jan Kulhánek MRICS Valuation Advisory CZECH REPUBLIC Klára Bejblová Associate Director, Research & Consulting UKRAINE Kira Pruglo Expandia LLC, Valuation & Advisory CBRE DISCLAMER 7 CBRE s.r.o. has been taken every care in the preparation of this report. The sources of information used are believed to be accurate and reliable, but no guarantee of accuracy of completeness can be given. Neither CBRE, nor any CBRE company, nor any director, representative or employee of CBRE company, accepts liability for any direct or consequential loss arising from the use of this document of its content. The information and opinions contained in this report are subject to change without notice. No part or parts of this report may be stored in a retrieval system or reproduced or transmitted in any form or by any means electronic, electronic mechanical, reprographics, recording or otherwise, now known or to be devised without prior consent from CBRE.