The weather at MAPIC 2016 – the international retail property trade show in Cannes – may have been a metaphor for global retail.
It was largely sunny in the French Riviera, but with a chilly breeze that made fashion choices difficult.
But a busy few days with lots of positive meetings indicated that, for global retailers, expansion is still very much on the cards.
London still calling
It is always a challenge to pinpoint the overall winner at MAPIC, but my unbiased and objective nomination is London.
There continues to be robust interest in the English capital despite – and on occasion because – of the effect of the recent EU referendum.
Brexit appears to have left us with little more than the slight sting of a slapped leg as retailers continue to put London at the top of their shopping list, certainly in Europe, and often globally.
Encouraging topics of conversation included the positive influence of Crossrail on the West End and the emerging areas of King’s Cross and Battersea, as well as the amazing transformation of Covent Garden and the rise and rise of Regent Street.
On the flip side, challenges for those looking to expand into London included the business rates review and the slowdown in the luxury sector.
“Brexit appears to have left us with little more than the slight sting of a slapped leg as retailers continue to put London at the top of their shopping list”
‘Fluxury’, in other words, but nevertheless demand remains high even if there is a little less sparkle.
Retailer demand is feeding through into rental growth. CBRE’s half-yearly global prime retail rents data showed that London has become the fastest-growing retail location in the world, registering an annual prime rental growth of 53.8% in the second quarter of 2016.
That spike is testament to the fact that London remains a key city for retailers and is seen as point of entry not just into the UK market, but into Europe.
Outside the London bubble, I was delighted by the growing momentum of Spanish retail on the world stage.
We had excellent attendance at our Central and Eastern European (CEE) retailer breakfast, proving that, far from being a collection of emerging markets, CEE punches well above its weight.
If the UK had its Brexit challenges, then the US had its shock presidential election result to draw attention away from Europe.
“Wait and see” seemed to be the overarching message, but there was strong representation from the US, particularly the fast-food players in the hotly contested food and beverage market.
Canada proudly demonstrated that if you can keep your head when those around you are losing theirs, the cities of Toronto and Vancouver have much to offer.
…But definitely not a Hidden Dragon. The confidence of the Asian presence at MAPIC grows quietly every year and we had excellent updates from several Asia-based retailers.
In terms of the regional opportunities, India may be the surprise package, with numerous global mega brands either recently opening or about to open in the market.
The early pioneers have long since settled down to embrace such an enormous and growing economy, but could Iran now represent one of the most exciting opportunities in global retail?
Their branding was heavy, the feedback was unbelievably positive and it cropped up on three separate occasions when I wasn’t expecting it to.
I’ve never been, but I’m starting to think I might like to.
- Mark Burlton is global executive, retail occupier, EMEA at CBRE