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Retailers enter foreign markets in response to global economic instability
16.11.2011 2228

Retailers enter foreign markets in response to global economic instability

An increasing number of retailers and investors are entering international markets and starting to develop in other countries under the influence of the unstable economic situation in Europe. This is stated in the Cushman & Wakefield report "What will happen to European retail in 2012?"

Cushman & Wakefield analysts expect international expansion to be a top priority for many retailers in 2012. At the same time, it is noted that retail chains are still very cautious, considering only the best shopping streets and shopping centers in large cities for development, and actively evaluating the existing real estate portfolio in order to reduce costs and increase profits. However, more risk-tolerant networks have emerged, ready to consider not only emerging markets, but small cities in developed countries.

Retailers are focused on finding premises located not only in the best locations, but also meeting modern requirements for effective planning solutions, environmental friendliness and technical equipment. The report emphasizes the growing deficit of such supply, which is only increasing due to a new trend - the buyout of retail premises by retailers. A similar trend is gaining momentum in London and Milan, where retailers such as Inditex, Chanel, LVMH prefer to own retail premises. The limited amount of new construction will also not make it easier for retailers to enter new markets. The announced volume of new retail space in Europe for 2011 at 6,8 million sq m is likely to be lower due to construction delays. It is expected that in 2012 in Europe will be built 5,8 million sq. M. Of retail space.

More and more retailers are moving away from the “traditional” concept of the store, offering consumers a different level of interaction with the brand, analysts emphasize. In some cities, technical specifications (dedicated Internet channels, electrical capacities) are becoming as important as location, transport and visual accessibility. The supply of such premises is catastrophically small, which affects the increase in rates.

According to the report, in the near future, sales via the Internet and the so-called m-commerce (sales via mobile devices) will come to the fore. At the same time, for some retail chains online stores is a way to "probe" a new market for themselves, for others, support for the existing network. In Russia and China, online trading accounts for a relatively small percentage of trade turnover, which is associated with the problems of securing transactions and underdeveloped infrastructure, but these markets have great potential for the development of online and mobile trading.

It is expected that the total investment in retail real estate in Europe for the year will be 47 billion euros, which is 7,5% more than in the 2010 year. 2012 will invest in 10-15% more in commercial real estate in Europe, approximately 47 billion Euros. However, the market is more polar than ever, both in terms of risk (real or expected), and the expected return and value of assets.

An increasing number of retailers and investors are entering international markets and starting to develop in other countries under the influence of the unstable economic situation in ...
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