The growth rate of rents in shopping centers accelerated rapidly recently, from 0,3 % in 2016 to 5 % in 2017, according to latest CBRE Shopping Centre Idex, which is compiled annualy by CBRE, a global leader in real estate services. Average store revenue went up by 8,6 % - a 1,5 percentage point faster pace of growth compared to 2016. Customer footfall as well as vacancy rates remained about the same.
CBRE recorded first slight increase of averagee rental levels after serveral years in 2016 – albeit only by 0,3 %. This trend has accelerated dramatically in 2017, with rental levels growing more than ten times faster – by 5 %. „Despite much faster growth, average rental levels are still lagging behind the average annual turnover growth, which was 7,6 % and 8,6 % in previous two years respectively. Rental level growth also differs with respect to store type and size. Specalized retail saw fastest growth last year (9,4 %) as well as largest (7,6 %) and smallest (7 %) stores,“ explains Klára Bejblová, Head of Research & Consulting - Associate Director, CBRE.
Figures in latest CBRE Shopping Centre Index illustrate, that Czech retail has been doing well in recent years, along with rest of the economy. Revenues have been growing steadily since 2014 in Prague and since 2015 in all regions. Food and beverage holds the record for 2017, with growth exceeding one fifth (20,2 %), which can be attributed mainly to fast food restaurants. „Growth in fast food segment is a result of demand for ever expanding and complex set of services in shopping centers and malls, which often includes restaurants and leisure. Many shopping centres have therefore focused on developing these services and even offering new concepts,“ explains Katarína Brydone, Head of Retail, CBRE.
Among other fast growing segments were consumer electronics retailers (11,4 %), services (10,9 %, to which contributed mainly travel agents with 39 % growth). Slightly below average, but still above 2016 growth figures were fashion stores (7,6 %), which represent largest share of floor space: 37 %. Only small turnover increase was recorded among sports goods retailers (1,1 %) and the only segment with declining revenue was household & furniture (- 0,9 %).
Market situation is well illustrated by a record low average vacancy rate of just 4,7 % - same as in 2016. „Traditional brick & mortar stores are becoming important for many tenants as part of their omnichannel customer service. Steady strong growth of online retail, which as at 21 % last year according to Czech Statistical Office, and currently represents about one tenth of all retail revenues in Czech Republic, poses no threat to traditional stores, rather the contrary,“ adds Katarína Brydone, Head of Retail, CBRE.
CBRE compiles its annual Shopping Centre Index for Czech Republic since 2013. It is currently based on data from 19 shopping centres in all regions of Czechia except Prague, with a total leasable space of half a million square meters, 1 500 retailers and over 80 million visitors in 2017. Thanks to its popularity, the Index has been extended to other countries such as Poland, Slovakia, Romania, Italy and Spain.