Global

Global MarketView

Retail Q3 2009

*Economic downturn begins to slow
Economic and retail indicators around the globe appear to be showing signs of greater stability. Some countries are now emerging from recession, with the Asia Pacific region leading the way; North America and Europe are lagging. However, the recovery is still fragile at present, and looks set to be a long and slow process in many parts of the world.

*Consumers feel the pinch
Record low interest rates and better economic news are helping improve consumer confidence – but from a low base. The rate of increase in unemployment has moderated, but consumers remain cautious and focused on value for money so this improvement not necessarily translated into an increase in retail sales. Retailers still face tough trading conditions in the run-up to the crucial holiday season.

*Some retailers continue to expand
Retailer confidence has also picked up over the course of 2009. While many retailers are not in a position to take new units, others are still looking to expand albeit usually on a smaller scale than previously envisaged. Generally they are focused on more mature markets and prime locations. In some cases retailers are using the current situation as a time of opportunity to acquire units which would not have been available previously when competition was more intense.

*Prime holds up better then secondary
Prime locations are finding it easier to attract new tenants where vacancies do occur, and rents are holding up better then in secondary areas where vacancies are higher and retailers are able to negotiate lower rents and larger incentive packages.

Author(s): several

Source: BNP Paribas Real Estate

Published: 01.12.2009