Investment in the Changing Retail Landscape

18th January 2016

When considering a retail investment one of the most important aspects is the location of the property both in terms of the town or city, and the pitch within the retail centre.

An interesting article in the Times today quotes British Retail Consortium figures which indicate the number of visitors to high streets fell 4% in December 2015 –  the ninth consecutive month in which shopper footfall declined.

All investors appreciate that retailing is changing but nobody yet knows how or when it will change. The article outlines proposals to create “investment zones” funded by property owners and occupiers to co-ordinate and manage retail centres. This is to counter the disadvantages of fragmented ownership of most retail high streets when competing against single ownership shopping centres and malls.

Inevitably this will require investment by both owners and occupiers and therefore impact on investment returns from retail property. Although the formation of such investment zones would undoubtedly have a positive impact on the physical High Street, at least part of the cost will have to be met by owners and occupiers.

The balance is the cost of funding such schemes against the revenue generated by improved rents. Interesting.

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