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THINK US: Retail - De-cluttering the retail landscape

THINK US: Retail - data generating art image

In our latest research report, 'THINK US Retail: De-cluttering the retail landscape', we examine the negative news headlines about the retail sector and the forces shaping the retail industry, looking ahead to where investment opportunities lie in the future.

"Doomsday scenarios cited in news coverage are extrapolated to the entire industry, rather than to the vulnerable segments which are truly struggling," says Melissa Reagen, Head of Research, Americas, at TH Real Estate. "In our view, the average-to-low performing retail centres are seeing value declines, while there is no evidence of the same for high-performing malls and shopping centres."

The report encourages consideration of how physical stores drive online sales, the performance of A-rated malls compared to B-and C-rated malls and the net gain in store openings in 2017.

"The market is being de-cluttered via natural selection," said John Ragland, TH Real Estate's US Head of Retail. "E-commerce and technology are causing significant changes in retailers' business models and weak retailers are being pushed out of business faster than ever. The end result will be a set of financially healthier retailers and shopping centres that offer customers more compelling products and curated experiences. Ultimately, we believe this disruption is causing opportunities on which savvy investors can capitalise."

"Defining characteristics of high-performing retail assets include strong experiential components, continual adaptions that complement e-commerce, and strategic, forward-looking capital improvements that address shifts in consumer behaviour and adapt to current technology," added Melissa.

While the rise of online retail sales and continuing shifts in consumer behaviour will continue to impact the US retail market, the report concludes that high-performing retail centres with an experiential component are a buying opportunity. While online retail sales have provided consumers with an easier and more efficient way to shop, e-commerce cannot replace the consumers' desire to shop in a physical store.


THINK US: Retail - De-cluttering the retail landscape

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Issued by Nuveen Real Estate Management Limited, 201 Bishopsgate, EC2M 3BN. Authorised and regulated by the Financial Conduct Authority. TH Real Estate is a name under which Nuveen Real Estate Management Limited provides investment products and services. TH Real Estate is an investment affiliate of Nuveen, LLC (“Nuveen”), the investment management arm of TIAA. C288881-AN-INST-10/17

Melissa Reagen

Melissa Reagen

Head of Research, Americas

Melissa's biography