May 23, 2016
Connect Media joins the throng of attendees who’ve gathered in Las Vegas this week for the International Council of Shopping Centers’ RECon show. We connected with JLL’s James Cook, one of the top retail research minds in the industry, to gain his insights about the trends shaping the sector.
Here’s the first of three deep dives with James.
TOMORROW’S RETAIL: 15 TRENDS DEFINING THE FUTURE OF RETAIL
Innovations in customer experience are driving tomorrow’s retail:
• Food Halls for All – Artisanal food halls are popular on the coasts, but mindshare data shows there’s huge room for growth in the rest of America.
• Theme Park in a Box – Theme park experiences draw in crowds to shopping centers. Examples include Dreamworks Dreamplace, Barbie Experience and Crayola Experience.
• Merchandise with Meaning – Retailers incorporate customers’ personal beliefs into their stores and brands. Examples include modest fashion for Islamic women, and Nike’s #BetterForIt campaign, which focuses on women.
RETAIL OUTLOOK: OCCUPIER TRENDS
As long as additions to retail supply remain low and economic growth continues, vacancies will continue to decline…slowly.
• U.S. vacancy rate remained flat at 5.6 percent in Q1. In top-performing markets, there is a supply/demand mismatch. Supply additions are still relatively modest, and with vacancy low in markets like San Francisco and Hawaii, it is becoming increasingly challenging to find the right space.
• Mixed-use development is all the rage. Live-work-play communities include Brickell City Centre and Miami WorldCenter (Miami); Millenium Tower (Boston); American Dream Meadowlands and City Point (New York).
RETAIL OUTLOOK: CAPITAL MARKET TRENDS
• Retail sales volumes, along with all commercial property types, dropped in Q1 16, as the market reacted to a global economic slowdown.
• Grocery-anchored centers remain in high demand, despite the slow quarter.
• Although investment volumes decreased by 27.6%, all investor types have seen steady relative growth in grocery assets year-over-year, with private investors acquiring most aggressively this quarter.