by Dan Rafter
The retail sector is facing plenty of challenges, with online sales biting into the profits of brick-and-mortar retailers. But there is one traditional retail sector that continues to thrive today: retail centers anchored by grocery tenants.
That’s one of the key findings from Real Capital Markets’ May 2017 Retail Sentiment Report.
According to the report, investors remain high on anchored shopping centers, which they continue to view as the most attractive retail investment opportunity. Real Capital Markets reports that more than 40 percent of investors cited ancored centers as their preferred retail investment.
“Anchored centers, whether highlighted by a grocery store or another strong big-box retailer, remains the category where the majority of investors see the greatest opportunity,” said Steve Shanahan, executive managing director of Real Capital Markets, in a written statement. “Though e-commerce is highly disruptive for so many businesses, grocery stores seem to be among the least vulnerable.”
The reason for this? People have to eat, and ordering groceries online, though possible, still isn’t all that common. Many consumers are even choosing to shop at high-end grocers as an alternative to eating out.
Investors, of course, are well aware of the impact that e-commerce is having on traditional brick-and-mortar retailers. And because of this, they might be a bit more cautious today when investing their dollars into the retail segment.
“Some retail property investors are taking a broader look at the impact of e-commerce and other influences as they fine-tune their investment strategies moving foward,” said Tina lichens, chief operating officer of Real Capital Markets. “Others are choosing to observe how those strategies unfold before making any financial commitments.”
The survey, though, does show that overall investors still believe there is value to be had in the retail sector.
“Investors continue to believe in the value of retail investments,” Shanahan said. “That tells me that should the right opportunity come along, they won’t hesitate to act quickly and decisively.”