February 20, 2012
Top-tier destination cities’ retail markets are a no-brainer for investors—or are they? Maybe it’s time to focus on the massive potential that lies within secondary cities.
In MORE Vision 4 we looked at the retail renaissance, focusing on seven key trends to look for in 2012. Major opportunities lie in one such trend: regional development, and focusing on secondary cities.
In the 2012 MIPIM Preview, we discovered that markets in regions such as Turkey, Russia, China and Poland are prime targets for today’s savvy investors.
In Europe, Cushman & Wakefield predicts that an upturn in shopping centre development on the continent is on the horizon, fuelled by improving retailer demand and concerns about potential shortages of prime retail space.
But while retail could be the new driver behind economic growth, it can’t be the only driver, a subject covered at length in the MAPIC 2011 Preview.
One article details how retail can lead to urban regeneration, specifying that development needs to focus on communities, not just malls. According to Nigel Poad, director of Insite Asset Management, regeneration must go beyond mall renovations—it should involve regenerating an entire area, and not necessarily a major urban centre.
“You need only to look at Liverpool to see that the large-scale regenerations have taken off in the UK,” he told us.
Back in the MIPIM Preview, Chris Brown discusses how savvy investors are targeting less-than-prime real estate markets to find success and growth in turbulent times.
Brown writes that according to financial giant DTZ, there is plenty of capital potential stalking opportunities in non-prime property. The group’s Great Wall of Money report from late 2011 noted:
“With over a third of capital raised before 2008, we expect many fund managers to be under increasing pressure to deploy legacy capital over the next twelve months or risk returning it to investors.”
This means investors are on the hunt for hot new investment markets—and countries like China, Russia, Poland and Turkey are at the top of their lists.
Watch this space for the next MORE Vision!
Every two months, MORE Vision by MAPIC will contribute to the retail real estate community’s knowledge base by exploring a key trend influencing retail property strategy today. Each issue of this multichannel and multi-tool service will include a presentation of a trend, with history, key figures and useful links. Questions raised will be opened up for debate on our social media platforms – the best comments and discussions will be summarised and published here on the MIPIMWorld blog.
MORE Vision 3 – Culture, leisure: traffic generator?
Image: Eric the Fish (2011)