(Source: Inside Retail | May 26, 2015)
Tokyo is the world’s hottest city for new retailer expansion, attracting 63 new retail brands, according to CBRE’s new report, How Global is the Business of Retail?
The report highlights that retailer globalisation continued in 2014 as retail brands targeted a wide range of locations across the world.
A total of 164 cities were surveyed and half saw at least five new retailers open a store.
Melbourne and Sydney remain the hottest cities in Australia for new retail entrants, ranking equal 39th with 12 new entrants, followed by Brisbane in 45th position with 11 new entrants.
Stephen McNabb, CBRE’s head of research for Australia, said overall the analysis paints a favourable outlook for retail space demand.
“Importantly, the survey shows how North American and European retailers are seeking further expansion beyond their home markets. It also highlights that Australia is attracting its fair share of new retail entrants, in line with, if not higher, than our global economic weighting,” he said.
Leif Olson, head of retail brokerage leasing, Australia, said the globalisation of the retail sector was providing opportunities for retailers outside of saturated, mature markets.
“There is a natural progression for retailers to open in south east Asia and use that as a stepping stone into Australia,” Olson said.
“We have been fielding an unprecedented number of enquiries from international brands seeking to establish a foothold in Australia and gain an understanding of this market. CBRE has held national tours with a number of high profile retailers in recent months and are working on their roll out plans through Australia and NZ.”
At a global level, Asia features heavily on the list of target cities of new retailer entrants accounting for six out of the top 15 markets.
Tokyo ranked as the hottest market, with space highly sought after despite the mixed signals in the economy and an increase in sales tax of eight per cent introduced in April 2014.
Singapore follows Tokyo with 58 new retail brands and Abu Dhabi saw the arrival of 55 new retail brands, ranking the city in third place in the top target markets by new retailer entrants.
London has retained its position as the world’s most international shopping destination with 57.9 per cent of international retailers present there. In 2014, 12 new brands opened in the city, including American Eagle and Lululemon Athletics.
The UK’s capital city continues to be a magnet for international retailers who want to showcase and establish their brand. London was closely followed by Dubai which has 55.7 per cent of international retailers present and Shanghai with 53.4 per cent.
“The continued desire for expansion into new cities remains high for international brands and we are seeing a great deal of expansion into Asia and in particular into Tokyo, Singapore, and Taipei, while, the desire to expand into the Middle East shows no sign of slowing down,” said McNabb.
US retailers dominated cross border expansion and accounted for 26 per cent of expansion into new global markets, while Italian retailers were the second most active accounting for 14 per cent, followed by UK-based retailers with 11 per cent.
Mid range fashion retailers remained the most active sector accounting for 21 per cent of global expansion, followed by luxury and business retailers with 20 per cent.
Olson said, the core elements of globalisation such as technology and demographic changes are continuing to have a dramatic impact on the retail business.
“As retailers look to drive market share and raise their brand profile, they will continue to expand and look for opportunities beyond their home territories,” he said.