Retail Property Development will be Sustained by Rising Global GDP

According to a new Cushman & Wakefield global retail research, worldwide trends for shopping center development remain positive. Although emerging economies have slowed and development will not match that of 2012 and 2013, considerable supply increases are predicted in major emerging markets such as Brazil, Russia, India, and China from 2014 to 2016. real estate in qatar

Both the considerable increase in ultra-high net worth individuals worldwide, as well as better global economic fundamentals and improved consumer confidence, bode well for the property market. Global GDP is expected to expand at a rate of 3.4 percent, the fastest since 2011. Household spending will play a big role in achieving GDP growth, with the United States, the eurozone, and China leading the way. Despite recent slowing growth, China is predicted to post a world-leading 4.5 percent increase in consumer expenditure in 2014, which will accelerate to 5.1 percent in 2015.

"As the global economy turns from recovery to growth, retail real estate development is generally considered as a barometer," said Matt Winn, Global Retail COO and Head of Retail in the Americas. While the economies of South America have slowed, Brazil, Colombia, Peru, and Chile will all see increases in supply in the coming years. Even in the United States, where the ratio of shopping center space per capita is larger than anywhere else in the world, there are projects under construction totaling more than 100,000 square meters. "In the countries and markets surveyed, more than 1,650 new shopping centers were delivered in 2012 and 2013." These buildings account for 63.9 million square meters of GLA, or 7.0 percent of the total existing inventory. The majority of the newly acquired space was driven by the United States, Russia, Brazil, Mexico, India, and China. More than 1,000 of the total shopping centers delivered were in the Americas.

The global development pipeline for 2014 stands at 38.3 million square meters, with 1,134 new centers expected to open by the end of the year. In terms of GLA in the pipeline, Asia leads the way with 22.0 million sq.m in 2014. Asia will produce more than 53.3 million sq.m of GLA over the next three years, roughly five times that of its closest competitor, the United States.

"Asia is a significant growth area for retailers, including mature retail economies such as Japan and Australia as well as the world's largest emerging economies." According to James Hawkey, Retail Services Leader for the Asia-Pacific Region, "the new supply of shopping centers in China is very considerable, and there will be a measure of overstock in some markets." "India, Indonesia, and Vietnam are all experiencing great growth."

In 2013, global shopping center investment was reasonably strong, and 2014 is off to a great start, with global retail deals reaching US$37.9 billion in the first quarter. This is a 42 percent increase from the previous year. That growth is mostly driven by momentum in the United States and recent trends in India. While massive investment in Brazil over the last decade has decreased, Latin America has seen some encouraging growth, with Mexico leading the way.

"Asset management and distinctiveness will be crucial for the future, whether new stock or existing facilities," said John Strachan, Global Head of Retail. "In order to compete with more flexible newly-built centers, long-established properties must evaluate their formats." In the age of social media and the opportunity to buy anytime and anywhere, whether online, in-store, or a combination of the two, refurbishment, redevelopment, and reinvention will all play a role in their success."