Chopping Shopping? Implications of Retail Structural Change on Sector Allocations (December 2019) Summary Report




Summary Report

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.

Through the use of a retail allocation model, this research provides an evidential and detailed analysis of retail sales, e-commerce and population projections, as well as historical retail market and retail investment performance to produce results that support widely-held expectations that allocations to retail real estate are likely to reduce materially over the next decade. Whilst this is particularly the case in the US and UK, interestingly, the modelling also demonstrates varying levels of impact in different jurisdictions – notably, Australia and Spain are projected to experience smaller impacts under a number of scenarios and may actually see growth in retail allocations.