SEATTLE, May 21, 2012 /PRNewswire/ -- Where should investors be putting their money within the retail sector? Who is poised to outperform in the coming months and years? A white paper released today by Colliers International, "On the Road Again: What's Driving Retail Real Estate's Recovery and Who's Getting There First," identifies growth companies and markets on the fast track to success, with some of them gaining ground under the radar.
Written by two Colliers research experts, Ann T. Natunewicz, national manager of Retail Research and K.C. Conway, executive managing director of Market Analytics, the report describes the factors necessary for retailers, owners/landlords, and metropolitan areas to be successful. In addition to several larger macroeconomic trends, the paper also highlights a number of ways many retailers are speeding along faster than others, fueled by a flush of capital investment and smart marketing and branding strategies.
Key findings from the report:
Retailers' ability and willingness to reinvest – Retail companies are more able and willing to reinvest in their businesses, as evidenced by sharp increases in 2012 Capital Expenditure budgets. Technology improvements focus on improving and integrating all sales channels, including brick-and-mortar, online, mobile and catalog operations. Retailers are also investing in opening new stores, upgrading existing locations and experimenting with smaller prototypes.
Focus on a better in-store experience – Retailers currently out front in this market, like Apple and its brand-infused Apple Stores, offer customers an in-store experience that's highly personalized—contrasted with the online experience—and one that allows customers to truly engage with their products and their brand. Those who reward customers for their footwork—enabling them to research and test products in stores and enjoy a multisensory experience—are gaining the most ground.
Service as a selling point – Future store closings are far more likely to impact businesses that sell goods than those focused on services, which are more difficult (if not impossible) to transact over the Web. A higher percentage of service uses forces lenders and appraisers to rethink how they value real estate projects.
High-performing locations – More than 90 percent of the 158 regional malls that generate the highest in-line sales are owned in full or in part by publicly traded Real Estate Investment Trusts (REITs). REITs have larger portfolios to refinance debt at better rates than smaller competitors, among other advantages. Retailers in smaller markets need to be creative to maintain a unique tenant mix, possibly accepting lower rents short-term for long-term stability and cash flow.
Housing market rebounding "under the radar" – Although many housing markets remain in recession territory, recent readings from the National Association of Homebuilders (NAHB) First American Improving Markets Index demonstrate "measurable improvement" in more than 100 markets as homebuyers return to the marketplace. With household formation being a significant driver of retail sales, this trend bodes well for the housewares sector, among others.
Big changes coming for U.S. port cities – Even as West Coast ports retain the largest overall market share of container traffic, current growth trends favor East Coast and Gulf Coast ports. East Coast traffic is anticipated to increase at double-digit rates as trade grows in emerging markets and declines in Asian/European markets.
NOTE TO EDITORS: For more details on this latest retail industry white paper from Colliers, take a look at the complete text available here: http://www.colliers.com/content/Colliers_Whitepaper_May2012_FINAL.PDF.
About Colliers International
Colliers International is the third-largest commercial real estate services company in the world, with over 12,300 professionals operating out of more than 520 offices in 62 countries. A subsidiary of FirstService Corporation (NASDAQ: FSRV; TSX: FSV and FSV.PR.U), it focuses on accelerating success for its clients by seamlessly providing a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and research. Commercial Property Executive and Multi-Housing News magazines ranked Colliers International the top U.S. real estate company. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.
SOURCE Colliers International