Deficit, deficit and once again deficit
27.10.2011 4754

Deficit, deficit and once again deficit

Vacancy rates and the number of new shopping centers will be the main factors affecting the retail real estate market in 2011, according to a new report "European Retail 2011: 10 Factors", published by the international consulting company Cushman & Wakefield. The report was presented at the MAPIC exhibition in Cannes.

Shopping centers will be under construction for at least another year or two. In 2011, about 5,2 million square meters will be commissioned. m of new retail space (this is the lowest figure for 30 years). For store owners, supply reduction will hit growth in rental rates in quality projects. That is why retailers will continue to carefully and selectively approach the search for new premises.

1. Proposal. Deficit, deficit and once again a deficit of quality retail space.

2. GDP. As long as trade and investment remain the main factors affecting economic recovery, the desire to avoid the second wave of the crisis will dominate the minds of retailers in 2011.

3. Costs. Due to falling rates in 2008 / 2009, rental costs remain acceptable, but rising costs, such as manufacturing and logistics, can make retail development more difficult.

4. Work force. The unemployment rate has stabilized in most European countries. However, next year it can grow if the cuts in the public sector are not offset by new jobs in the private sector.

5. Credit market. Interest rates in Europe are expected to remain low for a long time, and this should help businesses and consumers in the 2011 year, helping to “sweeten the pill” from cutting budget spending items in European countries. The main trend in 2011 is expected to increase bank lending.

6. Trade. An uneven recovery in sales is expected, which will keep pace with the recovery of GDP. But sales of expensive goods will not soon return to the pre-crisis level. The sellers of the economy segment will feel best of all.

7. Strict government action will delay growth and may delay recovery in some sectors. European countries where governments prefer to increase taxes without reducing costs can suffer greatly in the 2011 year.

8. Regulation. Looks like an elephant in a china shop. Changes in regulation will have a big impact on the market in 2011, especially while retailers are trying to adapt to changes in rental accounting that are planned for 2012 or 2013.

9. Demand. Retailers will remain cautious and selective, but with fewer new projects on the market, there will be strong competition for the best places.

10. Demographic situation. This is a critical factor affecting European retail. Experts expect the working population of Europe to peak in 2011. But this will affect business planning, and not short-term sales schemes.

The vacancy rate and the number of new shopping centers will be the main factors affecting the retail real estate market in 2011, according to a new report “European retail ...
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