Can Retail Withstand the Test of Time?

LAS VEGASWhen is the last time you stepped into a brand new shopping mall? Its been nearly a century since the first shopping mall opened in the United StatesU.S. construction deliveries of retail assets in 2013 were 76.6 percent below the high levels of 2008, and Q1 2014 deliveries for major markets were only 9.8 million.

The lack of new supply coupled with fluctuating consumer confidence is pushing retail real estate owners to strategically evaluate their current assets. With limited supply, getting the environment right in existing assets has become crucial, and its what really creates a resilient retail center. It is the basic building block of the physical offering, and cant be left to chance anymore, JLL Retails Karen Raquet told us.

According to JLLs Retail Property Management and Leasing experts, there are three key approaches retail owners can implement to boost their current assets:

1. Identify and Attract the Right Retailers:Looking holistically at the long-term viability of a centerthree to six years down the roadrather than filling vacant holes as they occur can make all the difference. Securing the right retailers for a particular space and center is crucial, because regardless of how attractive, stimulating, well-located and connected a retail site is, it will only attract visitors if it has a platform that meets or exceeds the demanding requirements of the local consumer.

JLLs Director of Leasing Kimli Cross told us, The shopping environment covers more than just the physical space, although this is extremely important, it is about how a space makes you feel as a visitor. Is it uplifting, entertaining, stimulating?

2. Engage with the Local Community: A retail center does not, and cannot exist in a bubbleits an intrinsic part of the community in which it sits, be it a suburban town, urban city, or even an airport. Building and promoting a strong identity for retail centers has become essential in an environment where competition is rife and where the shelf life of products and services appears to be diminishing. By giving back to the community, through the provision of free space for school art projects or charity events, retail centers can help to embed themselves into the heart of a community.

3. Detail Capital Improvements: Following the economic downturn, capital expenditure renovation work slowed substantially in the retail sector. Today, upgrades or additions of any size that restore and renovate a property can drive returns, and help a center overtake its competitive set. The biggest conversions that are likely to take place in the coming year will revolve around remerchandising and retrofitting space, including cosmetic remodels, and improvements to lighting, water and electric efficiency and consumption.

When these single strategies stand alone, they can in fact boost a propertys shopper appeal, cash flow and positively impact sales in the near term; however, when they are combined, they can truly transform a retail space into a place that both creates and responds to demand.

Next: The Ongoing Retail Evolution

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Can Retail Withstand the Test of Time?