mapic keynote wrap-up 2012, by james brown, jll
DESCRIPTION
James Brown from Jones Lang LaSalle, returns to MAPIC 2012 to give the famou Wrap-Up Keynote. Find key industry trends, figures and forecasts.TRANSCRIPT
Adapting for Change
and Positioning for Growth
James Brown
Head of EMEA Retail Research & [email protected]
2012Wrap up - Mapic
2
Looking BackWhat has happened since Mapic 2011?
Mapic 2011
4
European Economic Recovery ScenariosUncertainty and volatility remain...
Scenario 1: 10%Upside scenario: strong bounce back
Scenario 2: 60%Central scenario: ‘muddle’ through
Scenario 3: 30%Downside scenario: disorderly breakdown of Eurozone
4
Consumer and Retail Trade ConfidenceMild deterioration in consumer and trade confidence since last year…
5
Consumer Confidence Index Q3 2012Consumer confidence below LT trend across Europe (excl. Turkey & Russia)…
Long-Term Country Average = 100
Source: European Commission (November 2012)
Confidence above Long-Term Country Average
Confidence below Long-Term Country Average
Country confidence October 2011
8
Retail Sales Growth Forecast 2012 - 2014Multi speed forecast retail sales growth…
Source: Oxford Economics (October 2012); IHS Global Insight for Croatia and Ukraine (October 2012)
9
The Rise and Rise of OnlineThe move to multi-channel is accelerating…
Source: Euromonitor
Internet retail spend per capita 2010 (£)
10
The Impact of Multi-Channel RetailGlobal trends and initiatives are emerging, FAST…
Source: Google
Tesco shopping wall, Korea
11
The Retailer
12
Retail Requirements are ChangingInternational opportunities for growth; increased competition…
Source: Jones Lang LaSalle Global 660, ESRI
Jones Lang LaSalle - Global 660
13
Destination Europe: Leading CitiesLondon remains ‘springboard’ to Europe for non-European retailers…
Source: Jones Lang LaSalle, ‘Destination Europe 2013’
14
Destination Europe: Core and Growth CitiesGrowth, diversification; international borders no longer a barrier…
Source: Jones Lang LaSalle, ‘Destination Europe 2013’
15
Retailer Country of OriginItaly leads exporter league, the US is catching up fast and China emerges…
Source: Jones Lang LaSalle, ‘Destination Europe 2013’
• Continued growth anticipated
• Specific requirements
• Constrained supply of units
• Driving prime, luxury HS rents
• Favouring larger tourist markets
17
The Rise and Rise of LuxuryThriving through turbulence…
1
Portfolio Optimisation for Legacy RetailersLeases events area trigger for change...
Source: Jones Lang LaSalle (April 2012)
Note: Analysis based on a sample of circa 15,000 European Shopping Centre lease contracts.
Lease expiry profile varies by country and by retail sub-sector.
Number of lease expiries per year Cumulative number of lease expiries
Le
ase
exp
irie
s p
er
ye
ar
(%
)C
um
ula
tive
nu
mb
er o
f lea
se
exp
iries (%
)
18
The Owner & Developer
19
Shopping Centre Pipeline H2 2012-2013
45% of new stock across
Europe to be opened in
Russia and Turkey
combined…
Note: Includes schemes >5,000m² GLA only; excludes Retail Warehousing and Factory Outlet Centre.
Pipeline figures should be treated with caution.
Source: Jones Lang LaSalle (October 2012)
Tired stock in WE ripe for redevelopment, Asset Management…
19
Differentiation to SucceedKey ingredients to succeed in a multi-channel World…
Culture
Community engagementEducation
Retail Catering
Cinema
Service Pop-up
Click & collect
Embrace digital
Listen & communicate
Environment
Security
Convenience
Accessibility
Know the customer
21
NEW Opportunities: Travel HubsEurope’s top 100 airports have a combined 1.34 bn ‘visitors’ annually….
22
The Investor
23
Source: Jones Lang LaSalle (October 2012)
Retail Transaction Volumes Q1-Q3 2012 in million €
4,000 or over
2,000 to 4,000
1000 to 2,000
500 to 1000
200 to 500
100 - 200
0 - 100
No Transactions
Note: This review considers all investment sales of shopping centres, retail warehouses, factory outlet centres and supermarkets in Europe. The analysis
excludes the high street and any investment deal less than $ 5 million in value.
€2,890
€436
€739
€178
€405
€121
€758
€74
€460
European Retail Investment Volumes Q1-Q3 2012€11.7bn invested in Q1-Q3 2012, down 50% y-o-y due to lack of large deals…
€52
€43
€32
€12
€844
€118
€580
€3,595
€6
€101
€29
€220
24
European Retail Investment Drivers Q1-Q3 2012Liquidity and fundamentals continue to attract majority of retail investment…
Source: Oxford Economics (October 2012), Jones Lang LaSalle (October 2012)
p.a.
Average EU (27 Countries)
Avera
ge E
uro
pe
€ 8,961 mn – 77%
€ 964 mn – 8%€ 130 mn - 1%
€ 1,584 mn – 14%
Note: Average Retail Sales per Capita based on countries shown on graph.% Share investment volumes based on countries shown on graph.
25
Global Retail InvestmentContinued globalisation and increased competition...
25
Global Retail InvestmentRedefining retail investment markets...
25
European Retail InvestmentRedefining retail investment…
• Absence of debt (for the majority) in the near term
• Global equity appetite for Retail investment to continue
• Partnering to continue – ‘Equity and Expertise’
• EMEA leads investment market but Asia is catching up
• Global flows to influence prime pricing for best retail schemes
• Spread between prime and secondary pricing likely to stay
26
Summary
27
10 Takeaways2013 – Still adapting and positioning for growth…
• Uncertainty to remain; economic and retail sales growth subdued
• Pockets of strong growth exist across Europe
• Targeted retail expansion to continue
• Do NOT underestimate the impact of digital
• Retailer optimisation and consolidation to continue
• Re-development becomes the new development in WE
• New development continues in Turkey and Russia in particular
• Retail investment market to remain focused on ‘best’
• Lack of debt fuelling 2 tier market - prime vs. secondary
• Internationalisation of investment and partnering to continue
Adapting for Change
and Positioning for Growth
James Brown
Head of EMEA Retail Research & [email protected]
Thank you.