2023-05-31 16:46:57
| editorial staff
|
31.05.2023
Both the luxury sector and discounters are booming.
The CBRE experts Laura Holzheimer, Head of Research, Walter Wölfler, Head of Agency & Sector Retail Austria, and Lukas Schwarz, Head of Capital Markets presented a current analysis and forecast for the Austrian retail market. Accordingly, four major trends would emerge.
Die Trends
The four most important trends & insights for the retail market:
1. Online retail is stagnating at a high level
2. The rebound of entertainment brings momentum to shopping malls
3. Luxury and discounters are booming
4. Wellness and e-mobility are strong new categories
Revival of physical stores
There was surprising news at the beginning: “Physical shops are experiencing a revival,” says Walter Wölfler, Head of Retail, CBRE Austria. In particular, groceries, cosmetics, jewelery and luxury goods would increasingly be bought in brick-and-mortar stores again, primarily because of the better service and the overall experience. Accordingly, the very expansive discounters are also primarily growing in stationary markets. When it comes to clothing and shoes, generations are not as united as they are when it comes to food, with Gen Z preferring online retail, while baby boomers and Gen X prefer brick-and-mortar retail.
“At the moment, inflation is slowing down the recovery in retail, so that despite a nominal increase in sales, a real minus is being recorded in some product ranges. However, there are serious performance differences between individual retailers, especially in the fashion sector. Therefore, both real estate developers and investors are very selective when assessing the mix of tenants in retail properties,” says Wölfler.
Austria remains an attractive expansion destination
Discounters – such as TEDi, Pepco or Action – are still expanding in Austria. Although the discounters are concentrating on retail parks, entry into shopping centers, where footfall is increasing again, is not taboo. After the disappearance of insolvent market participants such as CCC or Orsay in recent years, Jokr and Flink have also ended their short guest appearances.
But not only discounters are discovering the Austrian retail market for themselves: in 2022, 21 international brands were active in Austria, including Sprüngli, Roberto Cavalli, Natuzzi, Bulgari and Iris von Arnim. “The level of market entries has risen again from 15 to 21 compared to the average of the pandemic years 2020/21. We are also expecting some exciting market entries for 2023,” says Wölfler.
ESG dominates innovations in the retail market
“In summary, one can say that the ESG criteria are the big game changers on the retail market – for operators as well as for customers and investors,” says Wölfler, summarizing the current developments. Short distances – such as with neighborhood solutions, which are increasingly being implemented in smaller projects as well – are just as important as the energy optimization of existing retail properties or electromobility, which requires the expansion of the e-infrastructure such as charging stations in shopping centers. “Of course, we also expect sustainable changes from the new legislation and directives at EU level: the framework conditions for users and investors are changing fundamentally as a result of the sustainability reporting specified in the CSRD directive,” says Wölfler, who continues: “We are excited on the final version of the supply chain law and its effects on the large trading companies”. The retail expert at CBRE advises everyone involved in the retail market to deal with the entire ESG issue quickly and at an early stage and to take the forthcoming changes into account in future planning.
No investment without sustainability
Investors’ interest in retail properties is stabilizing again after the difficult past few years. “Real estate with aftercare character and prime properties are currently the focus of investors’ interest. As in other asset classes, ESG plays a key role in sales. Many investors are specifically looking for ESG-compliant properties. If that is not the case, then they have to Sellers should expect price reductions,” says Lukas Schwarz, Head of Investment Properties at CBRE Austria. “Investors are interested, price corrections were already made in retail real estate during the pandemic and are now less pronounced than in other sectors due to the interest rate turnaround,” continued Schwarz, who predicted a low overall investment volume for 2023.
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