There are three stories in particular that have appeared in recent press that resonated with me.
Unlocking the pipeline….
Firstly, Klepierre has said that it intends to sell €1bn of assets, to improve its financial position and to provide finance to support the development pipeline. As we suspected, developers will have to begin to sell off assets to raise finance in an environment where development finance is and will continue to be scare. This is likely to be the key for unlocking the development pipeline; expect more sales to come this year from other European developers.
Hotspots across Europe….
Another positive story is that Apple has announced that it is thriving in Spain. This is a positive story for two reasons. This is the ultimate example of survival of the fittest and testimony to the theory that the right product sells irrespective of market conditions. Apple have the right product, branding and service and continues to go from strength to strength. It is also positive because it also supports our view that irrespective of macro conditions at country level, there are pockets of resilience and strength across Europe. This proves that Spain, which has a weak economic and retail sales outlook like a number of other western European markets, provides some hotspots for retailers seeking to expand. Whilst having the right product is key, local market fundamentals are more important than the outlook for countries at a macro level. Plenty of opportunities exist across Europe for retailers with the right product.
A catalyst for regeneration…
And finally, Waitrose has announced it is looking to further expand its in town convenience offer. We all need to eat and food is a key footfall driver; convenience retail growth may be the catalyst needed for turning round a number of struggling retail high streets in the UK. Convenience retailing should be given the necessary planning support it needs to succeed in town.