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#PeakRetail. UK market predictions were right on time @latticecut.
Now, we’ve made a 10-year leap in three months. Some of that growth will be temporary. Much will not be.
A short thread revisting retail property in the age of AmaZoom. https://twitter.com/latticecut/status/1285131138240061446
Now, we’ve made a 10-year leap in three months. Some of that growth will be temporary. Much will not be.
A short thread revisting retail property in the age of AmaZoom. https://twitter.com/latticecut/status/1285131138240061446
In 2016, predicted growth in Ecommerce in the UK would see circa 20% adoption in 2020. We said 19%.
Market got there a bit early, hitting 19.2% in 2019.
That represents #PeakRetail. Where online sales consume all new retail spending.
From here, offline sales begin really cannibalising offline stores and therefore offline rents.
That represents #PeakRetail. Where online sales consume all new retail spending.
From here, offline sales begin really cannibalising offline stores and therefore offline rents.
We said the industry would surpass 1/3 of turnover by internet channels in 2030. That was already based on a super-linear model of growth or collapse, depending on your POV.
In fact, we hit 32% in May 2020. A decade of expected ecommerce adoption in less than six months.
In fact, we hit 32% in May 2020. A decade of expected ecommerce adoption in less than six months.
So, effectively, welcome to UK Retail 2030. (Or maybe 2027 considering temprorary effects.)
What that’s also done is accelerate the irrelevance of millions of square feet into the UK retail footprint.
Keeping in mind alarms were sounded when excess stock is *13%* after the GFC.
What that’s also done is accelerate the irrelevance of millions of square feet into the UK retail footprint.
Keeping in mind alarms were sounded when excess stock is *13%* after the GFC.
If our work on retail footprint modelling is as accurate as ecommerce adoption, UK retail has doubled the amount of dead retail stock from 20% to 40% of the retail real estate market.
That is 300% of the volume when alarm bells went off over the future of high streets.
That is 300% of the volume when alarm bells went off over the future of high streets.
#PeakRetail meaning active decomissioning/repurposing of retail space as sales per square foot collapse to the level set by ecommerce suppliers.
Fascinating revisting the post from 2016, which was about the impact of the first 10% of ecommerce adoption on retail property. Thanks @latticecut.
https://medium.com/@nickrussell/debrief-the-rebirth-of-retail-fc62ea198520
For retailers and asset owners, 2020 has literally become 2030...
https://medium.com/@nickrussell/debrief-the-rebirth-of-retail-fc62ea198520
For retailers and asset owners, 2020 has literally become 2030...
Or for AmaZoom, 2030 has become 2020… 10 years of growth in three months.
Meanwhile, bankruptcy proceedings start in the US and the UK. Even as Wall Street analysts call REITs a strong buy.
Someone told me UK retail real estate was as good as treasury bonds in 2013. Now UK property REITs begin sinking with no capital returned to shareholders.
Someone told me UK retail real estate was as good as treasury bonds in 2013. Now UK property REITs begin sinking with no capital returned to shareholders.
Two final thoughts:
1. "Always bet on the butcher. Never bet on the pig.” It’s especially difficult when pigs think they’re butchers.
2. Most neighbourhoods are one or two landlord bankruptcies away from better High Streets.
1. "Always bet on the butcher. Never bet on the pig.” It’s especially difficult when pigs think they’re butchers.
2. Most neighbourhoods are one or two landlord bankruptcies away from better High Streets.
Over a decade of watching these markets, the problems come when local areas don’t work for capital investors. That’s when the corrosion of vacancy begins to bite.
With our forray into retail, there is always plenty of demand by communities for use of space. In London, the clearning price was £60/day. Landlords were looking for £120/day.
Interesting when a supplier sets out a price double the effective market price. Weird flex but ok.
Interesting when a supplier sets out a price double the effective market price. Weird flex but ok.
There are enough distortions in the UK tax code around real estate to make even a Libertarian rule intepreter like Dom Cummings blush. However, in the end, the butcher is always the butcher and the pig is always the pig.
