In New Omnichannel Era, Investors Wonder Whether Retail or Industrial is Better Play

Will Brick-and-Mortar Stores Still Dominate Sales Channel in Omnichannel Mix, or Does Industrial Property Stand to Reap Most Benefit from Trend?

All good news indeed for retail property investors.

However, the market shift brought on by mobile technology poses challenges for CRE investors. What are the best property types to target, in what locations, and how should they handle the properties they already own?

CoStar News examined a handful of investor strategies, including those from Deutsch Asset Wealth Management, Duke Realty, Menlo Equities, Monmouth Real Estate, UBS and USAA, to get a sense of the strategies among major investors.

That kind of growth has placed supply chain (i.e., industrial properties) firmly on the front line of retailers' growth strategies.

Individuals recently surveyed by the E&Y accounting firm seem to conclude that while brick-and-mortar is still the dominant sales channel for most retailers, the proportion is falling rapidly. In five years time, brick-and-mortar stores could account for just 81% of sales down from 93% this past year, E&Y projected.

And nearly 9 out of 10 consumer goods firms said they can no longer rely on traditional retail sales channels to drive growth.

So the key questions for investors sizing up the omnichannel strategy are: will brick-and-mortar stores still dominate as a sales channel in the omnichannel mix, or does industrial property stand to reap the most benefit from the trend?

Based on that question, here is how a variety of CRE investors are approaching opportunities presented by ecommerce growth.

Meanwhile, the firm said in its 2015 investment outlook, it expects retail will continue to be hampered by minimal income growth. Additionally, e-commerce is shifting some demand growth that would have previously gone to physical stores to the industrial sector. Furthermore, tenants are currently shifting toward smaller prototypical store plans, reducing demand for big-box properties.

The rest is here:
In New Omnichannel Era, Investors Wonder Whether Retail or Industrial is Better Play