What consumers want: how the top consumer traits are driving investor decisions
Announcement posted by Honner 17 Nov 2017
What consumers want: how the top consumer traits are driving investor decisions
17 November 2017 – According to research from TH Real Estate, online shopping is set to account for 16% of total global retail spend by 2021. Globally, traditional retailing is being challenged by the growing influence of technology and its impact has been felt across all geographies and retail segments. However, the best retail assets continue to enjoy near-100% occupancy, maintaining strong sales densities. So what ensures these assets continue to perform in the challenging retail landscape? TH Real Estate’s research asserts that by focusing on key consumer traits, it is possible to deliver bricks and mortar assets, which will remain relevant and resilient over the long term.
The research finds that whilst consumers differ across geography and generations, there are common desires that all individuals possess. The research has devised a list of the top consumer traits that drive successful retail formats: experience, convenience, value, wellness, to feel connected and flexibility.
According to TH Real Estate, experience retail blurs the lines between retail, leisure, restaurant and gaming. It is the “softer side” of retail investment where capital is used to create emotion and add theatre into retail destinations. Whereas convenience destinations provide accessibility by car, are internet compatible with a large proportion of retailers offering click & collect, and are often grocery anchored, providing greater convenience to families. Consumers love a bargain, and that is what value destinations, which can include outlet malls, provide. Value retailers are known to attract high footfall and in regards to outlets malls specifically, consumers are often willing to travel further and spend longer at the best schemes. Lastly, lifestyle centres offer the best opportunity for investment over the medium term. Lifestyle centres combine retail, leisure and residential development.
Angela Goodings, Associate Director of Research, comments: “The smartest investors will invest in experiential, accessible, value and lifestyle centres, making sure all types have a focus on flexibility. The fragmented nature of the retail environment means that an asset type, its consumer traits and personality, as well as locational factors, need to be assessed to understand long-term investment value.”
Alice Breheny, Global Head of Research, adds: “Making generalisations in terms of investment advice for Tomorrow’s World retail remains a challenge as no “one size” fits all. TH Real Estate believes there is a need to blend top-down strategies, which deliver on megatrends and consumer traits whilst understanding local market dynamics. We remain savvy about our changing environment to ensure we do not invest in the past, but constantly engage in new trends and technologies which create spaces for tomorrow, from the products of today. We are investing, helping to create, ready to be part of, and preparing for Tomorrow’s World.”
TH Real Estate predicts that technology will be a major disrupter of traditional retailing, but it also presents opportunities to move away from inventory centres. There is a place for both instore and online in a new “phygital” world and those stakeholders who can combine both channels will thrive into the future.
View the full report here: http://threalestate.com/~/media/files/research/17-11-16-think%20global%20retail.pdf Further myths are analysed in our US-specific retail paper ‘THINK US: Retail - De-cluttering the retail landscape’ which you can download from our website: http://threalestate.com/news-and-views/articles/17-11-01-think-us-retail---de-cluttering-the-retail-landscape
About TH Real Estate
TH Real Estate, an affiliate of Nuveen (the investment management arm of TIAA), is one of the largest real estate investment managers in the world with c.$103bn in AUM. Managing a suite of funds and mandates spanning both debt and equity across diverse geographies, sectors, investment styles and vehicle types, we provide access to every aspect of real estate investing. With over 80 years of investing experience, and more than 530 real estate professionals located across 22 cities throughout the US, Europe and Asia-Pacific, the platform offers unparalleled geographic reach, which is married with deep sector expertise. Our investment, asset management and corporate strategies grow from a deep understanding of the structural trends that we believe will shape the future of real estate and responsible investing beyond market cycles. This ‘Tomorrow’s World’ approach sits at the core of our investment process and business operations, informing our long-term view of real estate investments for the enduring benefit of both clients and society. www.threalestate.com
Notes to Editors
This press release is intended for trade press use only. Please do not redistribute.
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Financial professionals should independently evaluate the risks associated with products or services and exercise independent judgment with respect to their clients.
Please note investments in the real estate sector are subject to greater risk and volatility than other portfolios that are more diversified, and property values may be substantially affected by economic events in the real estate industry.
TH Real Estate is a real estate investment management holding company owned by Nuveen, LLC (Nuveen). TH Real Estate securities products distributed in North America are advised by UK regulated subsidiaries or Nuveen Alternatives Advisors, LLC, a registered investment advisor and wholly owned subsidiary of Nuveen, and distributed by Nuveen Securities, LLC, member FINRA. C 279155-INST-AN-10/18
Issued by TH Real Estate (Australia) Limited. ABN 98168690.AFSL 460770. TH Real Estate (Australia) limited provides investment products and services. TH Real Estate is an investment affiliate of Nuveen, LLC (“Nuveen”), the investment management arm of TIAA.
Contact details
Sarah Smith
T: +61 2 8248 3744
E: sarah@honner.com.au
Kara Eigl
T: 44 (0) 20 3727 8438
E: kara.eigl@threalestate.com