News & Trends
Effective Retail Places Use Leisure, Technology, Planning To Lure Shoppers, Who Now Want Shopping To Be Both Functional, Social
Los Angeles – Dec. 6, 2016 – CBRE Group, Inc., today released a report defining retail’s role in the growing trend of placemaking, as retail centers across the globe strive to create environments that attract shoppers and keep them returning amid the expanding culture of online shopping. The CBRE report spotlights 22 retail centers across the globe that illustrate the varied ways in which retail owners and occupants are creating unique consumer experiences today.
CBRE outlines in the report several components common to well-crafted retail places, of which a prime, still-unfolding example is addition of technology into the experience of shopping.
For example, Hong Kong’s Yoho Mall offers apps to help shoppers find parking spaces, sign onto restaurants’ wait lists and obtain instant coupons from the mall’s stores. The Val D’Europe Shopping Center in France provides digital totems and interactive kiosks to guide shoppers through the property. The DLF Mall of India in New Delhi offers digital video walls, free wifi and way-finder apps.
Overall, retail plays a critical role in placemaking in that stores, restaurants and entertainment venues contribute substantially to creating a property’s environment and the experiences that visitors have within it. Such placemaking now is essential for retail developers and investors as shoppers want their excursions to be both functional and social.
“Great retail placemaking isn’t limited to one country or one continent,” said Anthony Buono, Chairman of CBRE’s Global Retail Executive Committee. “From the eclectic mix of local eateries in New York’s Chelsea Market to the technological amenities of Hong Kong’s Yoho Mall and the leisure and entertainment options at London’s Spitalfields market, best practices in retail placemaking are applicable globally. These lessons are vital to learn as e-commerce changes shopping habits.”
CBRE researchers selected the report’s highlighted properties by considering those established among the best in their region and that include at least one of five key components that CBRE identifies as critical for placemaking:
- Leisure elements such as restaurants, bars, theaters, sports facilities or scheduled events.
- Incorporation of technology such as social media and online sales as well as tools such as public wifi, parking apps and the like.
- Consideration for sustainability and well being for tenants and visitors.
- A focus on vertical, multistory retail, most often in urban environments.
- And a strong master plan for seamlessly combining varied uses in one property.
The report describes the placemaking advantages of seven properties in the Americas: New York’s Chelsea Market, Los Angeles’ Runway at Playa Vista, San Francisco’s Ghirardelli Square, San Antonio’s Pearl District, the Miami Design District, Toronto’s Distillery District and Lima Larcomar in Lima, Peru.
The report’s other examples range from globally known properties such as the Dubai Mall in the United Arab Emirates to emerging projects such as Stockholm’s Mall of Scandinavia district.
To view the report, click here.
DALLAS – November 1, 2016 – CBRE announces Gather Kitchen, a new fast casual restaurant, is slated to open at Thanksgiving Tower in Downtown Dallas in early 2017. This is the first location for Gather Kitchen, which will serve healthy comfort food using local and seasonal produce gathered from local farmers.
Touted as a new generation of fast food, this restaurant was conceptualized by Nicki Hamilton who joined forces with seasoned restaurateur Soraya Spencer, who has opened eight restaurants across the world. The two women bonded over a common need for a quick comfort food option and together they created a unique concept that offers infinite choices with ingredients from local farmers. Breakfast, lunch and dinner bowls are assembled along an assembly line for complete transparency on ingredients. Customers will choose from a variety of base proteins, vegetables and five scratch-made sauces created by Mrs. Spencer and Mrs. Hamilton.
The 2,400-square-foot restaurant will also feature a bakery corner with original recipes, including gluten free and vegan options, an outdoor seating area, and floor-to-ceiling windows with spectacular views of the Dallas CBD.
“Downtown Dallas is booming, growing and evolving and we believe our concept fits a need for professionals in downtown who want a quick, casual, healthy and limitless menu,” said Mrs. Spencer.
Gather Kitchen will serve Monday-Saturday from 7 a.m. to 9 p.m.
“As part of our renovation of this iconic building, we want to provide distinctive, high-quality restaurant options,” said Billy Prewitt, Executive Vice President, Woods Capital Management. “Gather Kitchen’s unique combination of healthy comfort food and a fast casual setting fits the bill perfectly. They are going to be a big hit with our tenants and a great amenity for the Main Street District.”
CBRE Report Outlines Trends in E-Commerce, Promotions, Pop-Ups
HOUSTON – October 26, 2016 – Innovation and consumer choice are fueling the most significant trends shaping this holiday shopping season, including a proliferation of “rogue” retailing and the refinement of e-commerce distribution and returns, according to a new report from CBRE Group, Inc.
With most forecasters predicting a healthy but unspectacular increase in holiday sales this season, many storylines are likely to focus on the changes within retailing rather than the season’s volume of sales. To that end, the CBRE report outlines four of this season’s trends centered on improvements in e-commerce logistics as well as shoppers’ demand for new and unique options.
- The mainstreaming of “rogue retailing”: Shopping center owners and retailers are seeking to entice shoppers with unusual concepts that make each visit different. Those include temporary, pop-up stores and more independent, craft stores. Mall owners such as Westfield Group, as well as several established retailers like Nordstrom Inc., are among those embracing the pop-up format.
- Expanded e-commerce: Online sales are again expected to outpace in-store sales this season. But what’s not as well-known is who is driving those clicks: Brick-and-mortar retailers dominate online sales, and they’re investing in their platforms to do more. Additionally, mobile commerce has emerged as the fastest growing sector of online sales.
- Improved logistics beget e-commerce profits: This could be the season in which the technology, analytics, delivery networks and past experience amassed by retailers and shippers coalesce to produce ideal holiday logistics – to the point of making e-commerce profitable. That includes shoring up strategies for minimizing returns of goods bought online and quickly processing those that are sent back.
- The holiday promotions shuffle: A proliferation of landmark shopping days, from Black Friday and Small Business Saturday to Green Monday and Free Shipping Day, is allowing retailers to spread their promotions and shopper traffic across the entire season rather than just a couple of key days. Many thus can better manage their inventory. Shoppers, meanwhile, tend to dwell longer and spend more absent the hectic crowds.
“This holiday shopping season is all about thinking outside the traditional retail box,” said Melina Cordero, CBRE Head of Retail Research, the Americas. “Retailers are innovating their store formats and revamping their e-commerce fulfillment systems. Owners are adding new and intriguing stores to their mix. It will add up to a very different and more efficient holiday shopping season.”
To read the full report, click here.
Global Prime Retail Rents Rise as Traditional Fashion Capitals Register Largest Year-Over-Year Gains
Manhattan’s Fifth Avenue Ascends to World’s Highest Prime Rent While Hong Kong’s Russell Street Slides
Los Angeles – Oct. 20, 2016 – New York’s Fifth Avenue commands the world’s highest prime rents for retail space as rent gains in the Americas and Europe outpaced those in the Asia-Pacific region, according to a new report from CBRE Group, Inc.
CBRE’s semiannual Global Prime Retail Rents report found that prime retail rents grew 3.7 percent globally in the second quarter of 2016 from a year earlier, buoyed by consumer confidence in the U.S. and limited supply in Europe’s top retail markets. Regionally, prime rents grew the most in Europe, the Middle East and Africa (up 6.2 percent), followed by the Americas (up 3.9 percent) and Asia (2.1 percent). The report covers 92 markets across the globe.
Prime rents are the highest achievable rents for a retail storefront in a market’s best location with the best quality and specifications of space.
The perennial top markets for global retail showed substantial divergence in the past year. Prime retail rents on New York’s Fifth Avenue between 56th and 58th streets increased by 14.3 percent in the past year to $4,000 per square foot per year as of this year’s second quarter. Meanwhile, prime rents on Hong Kong’s Russell Street declined by 33 percent to $1,856 per square foot per year amid a slowdown in tourist arrivals from the Chinese mainland and more prudent spending by locals.
“The cooling off of China’s economy has manifest itself in sharply lower rents in Hong Kong, which has allowed a new crop of retailers to enter the coveted city,” said Anthony Buono, Chairman of CBRE’s Global Retail Executive Committee. “At the same time, prime retail rents in New York likely won’t move higher from here, as this market already has some of the world’s most expensive prime rents. London, however, has such scant supply of available prime space that its strong rent growth is likely to continue.”
In Manhattan, many international and domestic retailers alike are willing to make substantial investments to establish a presence for their brand on the world stage of Fifth Avenue’s priciest blocks. Others are content to gravitate to nearby submarkets that are less expensive but still highly coveted as retail showcases, such as Times Square, Downtown Manhattan and Brooklyn.
“New York’s high streets have gone through a dramatic evolution in recent years, with rates rising strongly amid a rather ebullient market running from 2013 to late 2015,” said Andrew S. Goldberg, a Vice Chairman of Retail Services in CBRE’s New York City office. “Over the past year, we’ve seen increasing availability and decreasing demand on the high streets. Also retailers are now receiving significant concessions from owners.”
Top 10 Global High Streets By Prime Retail Rent Level:
|Market||Street/Location||Prime Rent Q2 2016|
|New York||Fifth Avenue||$4,000|
|Hong Kong||Russell Street||$1,856|
|London||New Bond Street||$1,684|
|Paris||Avenue des Champs-Elysees||$1,366|
In terms of growth or prime retail rents in the past year, Europe is the story. Half of the 10 fastest growing prime retail rents in the past year came in European markets, led by London with a 53.8 percent increase. The few spaces that come available on London’s high streets are pursued by numerous aspiring lessees, resulting in steep rents.
Other European markets among the top 10 for prime rent growth are Rome (28.9 percent increase); Milan, Italy (20 percent); Sofia, Bulgaria (12.5 percent); and Warsaw, Poland (11.1 percent). Asia Pacific landed two markets in the top 10: Auckland, New Zealand (23.7 percent) and Sydney, Australia (14 percent). The Middle East had one: Dubai (12.5%). And the Americas had two: New York (14.3 percent) and Seattle (11.1 percent).
Other notable U.S. markets reflected as gainers in the report include Chicago (9.4 percent increase); Washington, D.C. (8.7 percent); Denver (7.7 percent); and San Francisco (3.8 percent). The only major U.S. market to register a decline in its prime retail rent was Miami, which posted a 7.1 percent loss on tempered tourism from Latin America due to challenged economies there.
Sales at restaurants surpassed grocery sales in the U.S. for first time last year, setting the table for expansion of newer concepts like food halls, ‘grocerants’
Los Angeles – July 25, 2016 – With food-and-beverage outlets now among the fastest-growing categories in retail centers, a new CBRE Group, Inc., report identifies four emerging eatery formats poised for significant expansion: food trucks, food halls, celebrity-chef restaurants and “grocerants.”
The CBRE report highlights numerous data points that underscore the booming growth of restaurants, including that total U.S. restaurant sales surpassed grocery sales for the first time last year, according to government data, and that they have fared better since the recession than any other retail category. It also points out that, while millennials dine out more often, older generations spend more overall at restaurants. This implies more growth for restaurants as millennials age and earn more.
Those factors and others collectively suggest that this growth in spending at restaurants is more than a cyclical, post-recession recovery but instead a fundamental shift in American dining and spending habits.
“We know that the strength of the food-and-beverage category has led to many shopping center owners seeking restaurants as anchor tenants to draw in shoppers, whereas department stores and other retailers previously filled that role,” said David Orkin, Executive Vice President and Restaurant Practice Leader, CBRE. “What’s particularly interesting today is that retail center owners are not only focused on traditional, proven restaurant concepts, but they are more willing than ever to embrace a broader range of emerging and, in some cases, untested concepts like food trucks which don’t pay traditional rent. They are willing to take risks to compete.”
CBRE enlisted its restaurant experts, led by Mr. Orkin, to identify the up-and-coming restaurant formats likely to drive the category’s further expansion in retail property. These four categories offer many or all of the attributes that appeal to modern diners and shoppers: diversity, convenience, uniqueness, relative affordability and experiential focus.
- Food trucks: While food trucks don’t often pay traditional rent, they attract shoppers to a center and have served as incubators to develop restaurant concepts that later become brick-and-mortar tenants.
- Food halls: This urban retail format features a changing mix of local and often independent food-and-beverage outlets that collectively add to the center’s atmosphere and uniqueness.
- Celebrity-chef restaurants: While sometimes expensive and risky to establish in a center, restaurants helmed by well-known chefs can be significant, exclusive traffic generators for a property when they succeed.
- “Grocerants”: Grocery stores that also offer prepared foods and made-to-order meals provide a mix of freshness, convenience and affordability that prove attractive to shoppers and, by extension, property owners.
Though these formats are popular, cultivating them can be risky for property owners. Restaurants— especially new, independent restaurants—have a notoriously high failure rate. What’s more, most property owners must contribute substantial capital to outfit their space for restaurant use. One solution CBRE has seen property owners undertake is to forego immediate repayment of buildout costs or to keep base rents low in exchange for an ownership stake in the restaurant. In that approach, the property owner receives a share of that restaurant’s profit even after its initial investment is repaid, thus providing the property owner a return on its assumption of risk.
“There’s a move toward financial partnership rather than traditional tenant-landlord relationships,” said Melina Cordero, CBRE’s Head of Retail Research in the Americas. “That’s something that landlords are going to have to be open to if they are pursuing some of these categories. In many cases, the customer draw generated by these food-and-beverage categories and the atmosphere they foster make the investment worthwhile.”
To download the report, click here.