CBRE: Average turnover of business centres rose again, by 7.7%
Rents rose by 0.5% for the first time in five years
According to the latest survey Shopping Centre Index conducted by CBRE, the world leader in commercial real estate services, The average turnover recorded by the Index increased by 7.7% y-o-y for the second consecutive year. Rents also rose by 0.5% for the first time in five years. The CBRE Shopping Center Index recorded a 3.3% y-o-y increase in business center attendance, while the vacancy rate in business centers fell to 4.7%.
The leasable retail area is dominated by fashion with 37%. Speciality Retail covers 15% of which 40% is taken by health & beauty tenants. The third biggest sector is Sports with 13%. Taking into account the overall proportion of share the changes in sectors is negligible. However considering the changes in individual sectors the highest increase is in Household & Furniture (13.5% y-o-y). Household & Furniture signiﬁcantly grew due to a high number of alternative and new local operators on the market. Fashion and Speciality Retail led the share in terms of the number of units, together accounting for 42%, followed by Services. The most dynamic within the individual sectors in number of units is Household & Furniture which increased by almost 21% y-o-y. Moreover there is a 5% increase shown in both Food and Sports.
Turnover has grown in all sectors, with most sectors recording growth at the same level as the average Index turnover, i.e. their growth is between 7% and 9% year-on-year. The most dynamic sector was in the gastronomy sector, which managed to grow by a double digit figure of 15.4% year-on-year. This increase was mainly due to the results of fast food and restaurant operators. Gastronomy is a dynamic sector, which is growing at a global level and is a sector that is currently experiencing a small revolution in Prague, the capital city. We clearly see the increasing importance of this sector when looking at new projects or projects that are currently undergoing reconstruction. The owners of these centres are significantly increasing areas devoted to this sector, while we are also seeing the entry of new concepts into the market and increasing requirements for unit sizes of many concepts, especially those that provide a dining experience and overall atmosphere as well as concepts for a healthy lifestyle. We are pleased that customers are ready to expand this sector even in regional cities.
Excellent turnover results remainded in 2016 reﬂecting the persisting possitive sentiment on the Czech market, which was reflected in a slight increase in rents last year (0.5%). Forecasts show that the Czech economy will continue to be in good shape, so we expect the shopping centres to achieve very good results this year as well.
In terms of footfall distribution during the year December remains the strongest month with 10.5% of total visits. The average footfall is around 450,000 visitors per shopping centre. However it is the only month which shows a year-on-year decline. It is relatively small, by 0.8%, caused by the trading restriction on national holidays. The increase in the remaining months varies between 2% to 8% y-o-y.
If you are interested in studies Shopping Centre Index, do not hesitate contact Kateřina Velfelová.
CBRE Group, a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2016 revenue). The Company has approximately 75,000 employees and serves real estate investors and occupiers through approximately 450 offices worldwide (excluding affiliates). CBRE offers a broad range of integrated services including project management; property management; investment management; valuation; property leasing; strategic consulting and research and consulting. In the Czech Republic, CBRE has almost 350 employees and manages nearly 70 commercial premises with a total area nearly 1.2 mil. sq. m. Read more at www.cbre.cz.