Tell us about yourself…
As CBRE’s recent Interim Head of Research and Head of Occupier Research for the Americas, I closely follow the economic and demographic factors and megatrends impacting the retail sector as well as the other major property types. I work with other members of CBRE’s Global Research and Consulting team, a network of over 430 researchers who are focused on providing the latest insights into economic and property market trends impacting all types of commercial and multifamily residential around the globe.
Where do you see the industry in five years?
The retail sector is going through a tremendous shift at the moment, moving from a brick-and-mortar service delivery system to an omni-channel business model that is putting enormous pressure on multi-market and multi-national retailers to adapt and change. At the same time, huge demographic shifts are underway due to the aging of the Baby Boomer generation and the associated rise of the Echo Boomer generation in the United States and the overall graying of the population in many of the developed economies, like Japan. Meanwhile, the emerging economies of Latin America (for example, Brazil) and Asia-Pacific (for example, Vietnam) are seeing a big shift in the landscape with the increase in income levels through the huge megatrend of global urbanization and the rising middle class.
Over the next five years, we see continued growth in the retail industry, particularly as retailers continue their expansion across borders to access a new and growing base of consumers. We also see e-commerce becoming a much bigger share of overall retail sales in the developed economies, where internet infrastructure is already well developed. This will continue to drive changes in the way retail space is configured to meet the needs of the changing marketplace. The rise of the middle class in emerging markets in Latin America and Asia-Pacific create opportunities for retailers to expand their brands within those markets but also call on retailers to develop innovative solutions to meet consumer demand in an increasingly mobile world.
Why are you excited for the future of the industry?\The retail industry is at an exciting point in time in its evolution in reaching a wider audience on a truly global scale. This presents opportunities for growth that were unheard of just a few years ago. Retailers that are innovative in their brand expansion plans and in using omni-channel solutions to meet demand will see unprecedented success. Those retailers that do not come up with innovative solutions will risk being eclipsed by more nimble competitors.
Meanwhile, as the demand for institutional-quality real estate continues to grow and global sources of capital continue to expand, the retail sector will benefit as an appealing asset class for diversification purposes. In the U.S., significant opportunity exists for continued improvement in the neighborhood and community center retail sector over the next few years as the overhang of space is absorbed and the overall market reaches equilibrium again in 2017. This creates an opportunity for significant upside for the retail sector as retail real estate fundamentals continue to improve.
Globally, demand for high street retail is still very strong and high street retail is undersupplied in many markets, forcing growth to spread to secondary locations or surrounding submarkets. Development opportunities will continue to arise as demand for prime retail continues.
Tell us about your session at the conference?
In my session, I will provide an overview of the key economic, demographic and industry trends that are impacting retail around the globe. I will reveal where economic growth is concentrated and how that is impacting retail sales by region. We will look at the recent fate of the U.S. consumer and how that is impacting the demand for retail goods. We will also examine trends in e-commerce and how that is impacting the demand for retail space. I will also present our view on how economic, demographic and retail rent growth in Latin America compares with the growth we are seeing in the other regions of EMEA and APAC.
How can people reach out to you online?
The best way to access the expertise of our Global Research team is through our website at http://www.cbre.com. Use the drop down menu to visit our Global Research Gateway for all of our research reports and insights.
There you will also find CBRE Global Research’s recently released retail study “How Active are Retailers Globally?” which looks at retailers’ expansion plans across the globe.