In December 2020 Portus Retail founder, Peter Todd, addressed Cambridge University MST Real Estate students to share some expert knowledge on the industry.
Here are some of the predictions for 2021 Retail Real Estate that Peter shared:
Trading through a global pandemic
- Managing expectations throughout a global pandemic is key alongside this, being proactive, communicating clearly and making decisions early will allow for successful trading structure.
- Working with tenants on trading hours, strategy, flexible rental terms and leasing to retain the highest possible level of occupancy.
- Have a clear operating strategy and marketing plan which includes opening times, health and safety measures and social distancing guidelines. Continual communication and matching customer experience of environment and safety to message need to be part of this strategy.
2021 retail trends
- In the short-term there will be a reduced dwell time as shopping will become less of a social activity.
- Customers will have an increased awareness of the physical shopping environment and are seeking space, natural light and ventilation and a sense of a safe environment.
- Retail centres and stores must offer both destination options and convenience options to meet consumer demands.
- Click & Collect will become more prominent.
- The pandemic will accelerate change in the retail landscape as consumers have become used to a new shopping experience some established brands fail and new ones emerge.
Implications for retail real estate:
- The pace of change will accelerate, retail landlords will need to be creative and find alternative uses (leisure, offices, community use, residential, last mile logistics, etc.) for surplus floor space.
- Whilst the specific and relative situation in retail has evolved, the fundamental principles of positioning each centre relative to the local market demand and retail hierarchy remains the paramount success factor.
- Shop formats are evolving to accommodate new customer demands and the new retail landscape.
- Rental and capital values are under pressure and will remain so for some time.
- Many retail centres will fail if their owners cannot or do not reinvent them based on these accelerated changes
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