Increased investment in online capabilities expected in the retail sector
Investment in online capabilities and delivery apps across the retail sector is expected to increase further, according to the latest research from global real estate advisor, CBRE. Online sales have helped many retailers offset some of the lost revenue from store closures during the lockdown period.
New CBRE research identifies predictions, trends and insights across the sector, based on interviews and surveys with leading UK occupiers. Further polarisation and consolidation of existing retail portfolios is anticipated, whilst investment in the in-store experience will remain a high priority. Social media has helped keep brands at the forefront of consumer minds, and two-thirds of respondents said that the use of social commerce (such as social media and livestreaming) has increased in priority across their business strategies.
According to the survey, as we move into the next phase of lockdown, the relationship between landlord and tenant will become more prevalent. CBRE’s findings show that whilst 84% of the respondents have been offered some form of relief measure from landlords, a vast majority expect landlords to be more accommodating.
The UK real estate sector is trying to be as creative as possible to meet tenant and landlord expectations. Many landlords have been receptive to retailer needs, offering rent free periods and rental holidays, according to the research. Going forward, flexibility is a key focus, with two-thirds of respondents willing to sacrifice protection of the Landlord and Tenant Act 1954 in exchange for greater flexibility. Furthermore, 86% would be willing to share turnover information if it enables them to receive their lease-term preferences.
Read the full research report here; https://www.cbre.co.uk/research-and-reports/United-Kingdom-Retail-COVID-19-Survey-Feedback-2-June-2020
We have seen retailers focusing on different parts of their business strategies over the past few months to try and keep revenue streams flowing, whereby online capability and social commerce investment are rising priorities.
Whilst it has been a period of heightened uncertainty, both landlord and tenant have the chance to solidify their relationships and make positive changes moving forward.