Adapt to cross-channel age
Bouwfonds Investment Management has analyzed 589 shopping malls larger than 5,000 sqm that which were built before 2005 in France, Germany and the Netherlands. It concluded that half need to be modernized, which makes them interesting investments for (retail) real estate investors.
“Retail investors have to renew their opinion of traditional shopping areas, in order to be able to find those that adapt successfully to a new “cross-channel” era, stimulated by the surge in online retailing”, CEO Jaap Gillis told vastgoedmarkt.nl.
Shopping malls outside urban areas struggle
Shopping malls that are not in urban areas are facing the largest challenge, according to Bouwfonds IM, as they risk losing customers to online retailers. The biggest issue is that these shopping malls cannot (or barely) offer a ‘shopping experience’.
Huge shopping malls (exceeding 80,000 sqm) can circumvent that issue by making their own shopping experience, while smaller malls have to take advantage of the allure of their city. Their location is assisted by the ‘convenience’ of having a mix of larger supermarkets and complementary stores offering the customer a wide variety of options nearby.
The mature European markets are becoming increasingly saturated, when considering available store space, which is why they have to focus on the demands of the cross channel age and have to modernize.
