"The growth in online retail has fallen back and flatlined at between 26% and 28% of overall retail sales since a peak of 35% in mid-2020. Retail has outperformed all other types of commercial property this year, with 9.2% returns on investments in the year to September, Knight Frank said. This is ahead of industrial properties, at 9.1% and offices at 3.2%."
"Next year, retail property is forecast to deliver investment returns of 9.5%. Will Lund, the head of retail capital markets at Knight Frank, said: With online penetration flatlining and retailers reinvesting in physical space, the narrative around retail has fundamentally changed. We have great confidence that this demand is going to drive a return to decade-high investment volumes in 2026 and we are expecting a busy year."
Retailers and property investors are reallocating capital into physical stores, sparking a revival led by shopping centres and food stores. Online retail's share has fallen from a mid-2020 peak of 35% to a flat 26–28% of sales. Retail returned 9.2% on investments in the year to September, outperforming industrial (9.1%) and offices (3.2%). Shopping centres and food stores each delivered 10.2% growth in returns this year. Larger shopping centres are adding experiential attractions to draw visitors, while smaller, older malls struggle as chains concentrate on fewer, larger locations. Retail property returns are forecast at 9.5% next year with investment volumes expected to rebound by 2026.
Read at www.theguardian.com
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