IPF News

Chopping Shopping? IPF Commissions Study into The Influence of Structural Changes in Retail on Sector Allocations

24 Jul 2018

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Much has been written about the current state of bricks and mortar retail, in particular focussing on the health of the high street and shopping centres in light of the impact of e-commerce on consumer purchases of goods and services. However, there has been less discussion of the influence of omni-channel retailing and the potential consequences this may have on allocations to the retail sector from an investment perspective.

The IPF Research Programme (2015-2018) has commissioned the University of the West of England, led by Senior Lecturer Grazyna Wiejak-Roy, to undertake this research. The study will consider the fundamental question of what influence to date the many changes in retailing have had on allocations to the sector within major, institutional/ non-specialist real estate investment portfolios, and what may replace retail, should long-term allocations to this sector decline. The study will extend beyond the UK, to consider the current impact in a number of locations, including the US, Australia, Germany, France, Spain and South Korea.

Richard Gwilliam, Head of Research at M&G Real Estate, is chairing the Project Steering Group (PSG) that will oversee the research and commented: “Investors in the UK and elsewhere have been grappling with how structural change in the retail sector should impact their investment decisions. This research will shed new light, informing portfolio allocation strategies and highlighting implications for the real estate markets.”

Wiejak-Roy suggested: “The US retail Armageddon has been widely discussed and many fear the same may happen elsewhere. We are thrilled to investigate what the future may bring by covering seven countries, representing nearly 70% of the global professionally managed real estate market. Each of these markets exhibits different supply and demand characteristics. Our research will provide valuable insights for the investor to support their investment decisions across varying scenarios.”

Other members of the PSG comprise Anne Breen of Aberdeen Standard Investments, Souad Cherfouh (Aviva Investors), Richard Kolb (PRIME Management) and Will Rowson (Hodes Weill).

Research findings are due to be published in the spring of 2019.