Cushman & Wakefield predict 2011 market conditions
Published: 17 November, 2010
Vacancy rates and supply – particularly shopping centre development - will be the most important drivers of retail property markets and performance in 2011, according to a new report by Cushman & Wakefield.
The report `European Retail - 10 Key Drivers for 2011` launched today at MAPIC in Cannes, examines the top ten factors set to impact the outlook for retail property and trading in Europe next year.
The 10 factors include: supply, GDP, affordability, employment, the lending market, retail sales, austerity measures, regulation, demand and demographics.
The report predicts that retailer demand will remain cautious and selective but with less development there will be even stronger competition for the best space, with prime market leading the recovery. Shopping centre completions are expected to remain at low levels for at least one to two years, supporting rents for the better schemes.
John Strachan, head of global retail at Cushman & Wakefield, said: “The right mix of lending conditions, consumer and business confidence is vital to create the overall environment in which recovery can take hold. 2011 will be shaped in the main by a reduction in the availability of good quality space and it will be interesting to see how quickly retailers and developers react to this.”
Darren Yates, associate in Cushman & Wakefield’s European Research Group, added: “Whilst consumers will remain under pressure in 2011, retailer demand in general is expected to pick up after two years of relative inactivity. However, with input costs rising, retailers will be very margin-conscious and keener than ever to focus their efforts on securing space in the best possible locations. With a steadily declining number of choices available to them, competition for this space will become even more intense, whilst secondary space will continue to languish in the doldrums. ”
