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Paul Nicholls

Business Arena 2014 - Top take-aways

Paul Nicholls, Head of European Retail Asset Management, provides his top take-aways from the Business Arena 2014 conference which took place in Stockholm last week.

Business Arena provided a great opportunity to present our views on e-commerce and how it will impact commercial real estate. 

The growth of e-commerce continues apace. Nevertheless, we anticipate that pure internet retailers will start to lose market share to those with the ability to capitalise on their physical stores, seamlessly providing more choice in the nature of transactions. The best exponent of this ‘omni-channel’ model in the UK right now is probably John Lewis, which has already announced that ‘click and collect’ is expected to eclipse home delivery this Christmas.

The physical presence of a store offers greater opportunities to showcase a product, communicate with the shopper and instil confidence in a transaction. We expect an even greater emphasis on the quality of shop fit, level of service and overall retail experience. 

A combination of different technologies, such as endless shelves and interactive HD screens, will increasingly be employed to enrich the experience rather than replace the store, offering the opportunity to showcase extensive product ranges in smaller more efficient spaces, signalling the end of the space race. Whilst retailers will remain committed to real estate in some shape or form, there will be greater scrutiny of sales performance and less commitment to weaker locations, with the internet increasingly used to take up the slack, where geography allows. Thus it is more important than ever to follow sales performance where available, and act rapidly in the event of a decline.

We expect continued emphasis on dominant shopping centres incorporating the most popular retailers, food and drink, and exciting leisure options. Success is, however, not only based on the size of the asset, but also the size and expertise of the owner/manager, its market knowledge, ability to innovate and promote and, of course, leverage off widespread retailer relationships. The alternative focus will be on super convenient hubs, with plentiful parking, and strong anchors, where retailers can enjoy the benefits of comparatively low occupancy costs and flexible space.




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Paul Nicholls

Paul Nicholls

Director, Asset Management

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