Home / Knowledge / News / Apparel/Garments / Retail & distribution space may converge: Fitch
Retail & distribution space may converge: Fitch
06
Jun '17
The growth of e-retail and the increasing emphasis on delivery speed as well as pick-up services for retail goods could result in a convergence of industrial distribution and retail real estate, according to a recent report. Ongoing changes for retail real estate and industrial space have put the future of shopping centers and low-quality malls in question.

E-commerce continues to take share from bricks and mortar retail, resulting in tenant and retail property softness, says a report by Fitch Ratings. Well-located retail properties and REITs with portfolios centered on consumer demographics will see continued demand as delivery and pickup services and an increased focus on demographics gain momentum.

Retail real estate sites and e-commerce last mile distribution sites now essentially serve the same purpose - the distribution (or staging) of goods for sale to the end user. One has a delivery focus but without public access, the other has public access but without a delivery function. Retail centers that exhibit the best demographics, which include per capita income and population density, will be most easily repositioned and most capable of managing the secular shift in how goods are sold and purchased in the 21st century, adds the report.

Owners of infill retail locations that can also function as delivery and pickup locations - retail distribution (or ReDi Facilities) - will likely be winners as this convergence accelerates. The need to distinguish between an attractive retail or last mile distribution site - zoning notwithstanding - will become less meaningful as the function of the real estate is the same: providing a way to distribute goods to customers. The old real estate axiom, 'Location, Location, Location' applies, possibly now more than ever.

Community shopping centre and regional mall values have historically been measured by their proximity to population density and the region's per capita income. While these measures will continue to determine the attractiveness of a site, last mile distribution and pickup purposes will also be considered in drawing consumer foot traffic and buying power.

In a rapidly changing retail world, lenders, investors and operators will have to refocus their attention to demographics. When it comes to last mile retail distribution, underwriting on location (based on consumer demographics) may take on as meaningful importance as in-place NOI, according to Fitch.

If the alternative is an antiquated or failing centre in a municipality, zoning authorities and their communities will eventually be compelled to consider zoning changes allowing small scale distribution facilities at current retail zoned sites or face the prospects of a blighted centre, lost jobs and tax revenue. Fitch expects real estate owners will find ways to make mixed-use retail/distribution sites palatable for residents. (KD)

Fibre2Fashion News Desk – India


Must ReadView All

Pic: Shutterstock

Apparel/Garments | On 28th Feb 2020

Cambodian PM urges PRC to export raw materials by air, sea

Prime Minister Hun Sen recently urged Chinese ambassador to Cambodia...

Pic: Shutterstock

Textiles | On 28th Feb 2020

Pak govt urged to help clear consignments from China

The Sindh Industrial Trading Estate (SITE) Association of Industry...

Pic: Shutterstock

Textiles | On 28th Feb 2020

Coronavirus an opportunity for Indian textile industry?

While scientists across the world are busy developing vaccine and...

Interviews View All

Spokesperson, Hugo Boss

Spokesperson
Hugo Boss

'Hugo Boss works with carefully selected sourcing partners'

Top executives, Textile industry

Top executives
Textile industry

In 10 years' time, everything will have the responsible factor integrated

Top executives, Textile & apparel bodies

Top executives
Textile & apparel bodies

Textile industry would like to see inclusion of cotton yarn under MEIS and ...

Kamal Kulshreshth,

Kamal Kulshreshth

Colorjet is among the fastest-growing wide format digital inkjet print...

Abhishek Pachauri,

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Eric Schoeller,

Eric Schoeller

Groz-Beckert is the world's leading provider of industrial machine...

Paolo Ocleppo, Sandvik Hyperion

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Mr Ambrose Chan, DSG International (Thailand) PLC

Mr Ambrose Chan
DSG International (Thailand) PLC

Dave Rousse, INDA

Dave Rousse
INDA

INDA, the Association of the Nonwoven Fabrics Industry, serves hundreds of ...

Yash P. Kotak, Bombay Hemp Company

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Aprajita Toor, Aprajita Toor

Aprajita Toor
Aprajita Toor

The creations by Aprajita Toor were born out of a deep desire to create...

Priya Somaiya, Usha Social Services

Priya Somaiya
Usha Social Services

The Usha Silai label from Usha International is all set for a retail...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


February 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search