Rising sales and solid shopping center occupancy rates signal a bright future for shopping centers and retailers, and they also challenge a false narrative about the decline of physical retail, according to Deborah Weinswig, managing director of Fung Global Retail & Technology, as cited in a CNBC report.
"Store closures grabbed the headlines and drove the 'retail apocalypse' narrative in 2017 and into 2018," Weinswig told CNBC. But "total in-store sales continued to grow, yielding an uplift in sales densities across U.S. retail," she said. "Moreover, occupancy rates in open-air shopping centers and super-regional malls [sized in excess of 800,000 square feet] proved resilient."
Malls and open-air centers are reinventing themselves by leasing up experiential tenants and similar nontraditional uses in spaces once occupied by department stores and other big-box anchors, Weinswig notes. Meanwhile, major REITs Brixmor, DDR, GGP, Kimco and Simon all report occupancy rates at or above 95 percent, she notes.
"GGP and others have been dialing down their exposure to apparel specialty stores, and a number of these companies have focused on grocery-anchored centers or sought to bring in more grocery tenants to their existing centers," Weinswig said.
Open-air centers, meanwhile, are considered one of the “most resilient retail real estate segments," Fung Global notes in a report, adding that these are often anchored by robust retailers like Dick’s Sporting Goods, Kohl's and Whole Foods.
By Edmund Mander