+33(0)173101995Discover the testimony of Pascal Robic, BNP Paribas Real Estate Valuation real estate expert, on the evolutions and challenges of the retail market and the new expectations of investors for this real estate asset, whether it is a shopping centre, retail park, outlet centre or shopfronts.
What changes have you seen in recent years?
In terms of retail, more than for any other asset, location is the main criteria. The main concerns of retvail brands are the visibility, the ability to attract as many customers as possible and for certain brands such as luxury brands, the need for purchasing power is also very important.
In recent years, there has been a rush by some brands towards the best locations, with the obvious consequence being the increase in rental values in premium locations. Think the Champs Elysees for example. Space, however, is limited. So, we are seeing two phenomena: the first phenomenon is an increase in rental value for neighbouring locations. Take for example the rue Saint Honoré or other neighborhoods like the Marais, whose rental values continue to rise . On the other hand, there is a second trend, mainly due to internet shopping, which is the disinfection for secondary sites.
What are investors' expectations of this asset type?
The main objectives of investors are security and performance. The capping on rents for retail promotes security. It facilitates the maintenance of a solvent tenant in the premises, thus avoiding turnover. One can call into question the effect of a double Pinel cap. In recent years there has been an increase in the eviction of tenants, according to priority because of Pinel law. The search for security on the part of investors leads to lower rates. Even in the best locations, interest rates are below 3%. Investors looking for higher returns than security will turn to more secondary but quality locations, such as area locations or neighbourhood locations.
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