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Have all retail assets been tarnished with the same brush? 5 insights on the latest report from the UK.

Because of the ongoing structural shift in the retail industry, many investors are currently feeling hesitant about retail assets in secondary locations. But have all assets possibly been tarnished with the same brush? A report from the UK give us 5 insights on the subject:

  • The yield gap between prime and secondary assets have widened, but has not been coupled with a corresponding vacancy increase in secondary properties. Lower valuations for good secondary assets can therefore offer good cash flows with relatively high yield
  • Owners of assets in secondary locations in the retail segment should accept that the lease term (WAULT) gets shorter and embrace the flexibility this brings
  • The asset should be adapted to the local catchment area, and see the need for convenience for the consumers – a large part of e-commerce is and remains impractical
  • Physical stores’ competitive advantage is the opportunity to offer destinations and experiences, something e-commerce simply can’t offer
  • Assets in secondary locations should focus on tenants which to a lesser extent go online, such as supermarkets, value retailers, DIY and other bulky goods, as well as selective fast fashion brands as key anchor tenants

My conclusion: Secondary retail assets remain interesting for investors who cannot hope to deliver the required returns by buying prime assets, and where active management is part of the strategy.

Want to know more? Please contact Amanda Welander amanda.welander@cbre.com Head of Research, CBRE

You can follow Amanda on LinkedIn:
https://www.linkedin.com/in/amandawelander

Or on Twitter:
https://twitter.com/AAMWelander

This article was first published in Swedish on May 4th 2018. You can read it here:
Har all retail dragits över samma kam? De 5 viktigaste lärdomarna från UK. https://goo.gl/Yxg9fm

Previously published articles - in English and Swedish:

The Swedish residential market – are we seeing the start of a trend shift? https://goo.gl/c72DWW

Svenska bostadsmarknaden – ser vi början på ett trendskifte? https://goo.gl/adc2Zv

Investera i fastigheter – hur ser marknaden ut 2018? https://goo.gl/bBb1ei

Framtiden för Sale and Leasebacks efter införandet av IFRS 16. https://goo.gl/4Kcy5D

Investera i fastigheter – hur ser marknaden ut 2018? https://goo.gl/bBb1ei

CBRE publicerar rapporten Investor Intentions Survey https://goo.gl/cMvfgq

Ämnen

  • Bygg, fastighet

Kategorier

  • fastighetsinvesteringar - real estate invesments
  • cbre sweden - real estate - fastighetsrådgivaren
  • cbre sweden research
  • swedish retail
  • retail

Regioner

  • Stockholm

Kontakter

Yvonne Ehinger

Presskontakt Head of Marketing +46(0)73-3498701

Patrik Kallenvret

Presskontakt Managing Director, CBRE Sweden AB +46 (0)767-633 341

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