Money Buzz! Europa

Tag: retail

  • Recovery beyond expectations in Romanian retail. Traffic at 80% of normal

    Recovery beyond expectations in Romanian retail. Traffic at 80% of normal

    The first half of the year was most difficult for retail players, considering the lockdown during the emergency state, but the recovery up until July has been better than most market participants were initially expecting, according to Colliers International’s market report for the first semester of 2020.

    In the industrial & logistics area, it has been business as usual during the pandemic, with some seeing big spikes in activity, but a significant pipeline of speculative developments and a competitive market are tilting the balance in favour or tenants.

    A single retail park, in Miercurea Ciuc, with a bit under 12,000 square meters, was inaugurated in the first half of the year.

    While several retail projects were delayed amid the coronavirus lockdown, others moved forward, like NEPI’s Shopping City Targu Mures (nearly 40,000 sqm), completed in July, and AFI Brașov (45,000 sqm) and Prime Kapital’s Dambovita Mall (33,000 sqm) are set to opened with little delay in autumn.

    Overall, a 200,000 square meters pipeline in 2020 is not too different than Colliers International consultants estimated ahead of the Covid-19 events (about 246,000 sqm), and experts expect a quick recovery throughout the next 12 months, with Romania having the potential to surpass 4 millions square meters of new retail space at the end of this year or the beginning of the next one.

    Foot traffic in shopping centers at 80% of normal levels

    Foot traffic has gradually returned to towards 80%, of normal levels for this period of the year after the reopening of malls in June, based on information that Colliers International consultants received from major landlords, while for some retail parks, particularly in certain parts of the country, sales are already above 2019-levels.

    Google mobility indicators for Bucharest show that foot traffic in all retail and entertainment areas is some 25% below a baseline set using figures for the early January-early February period, which tends to be much busier than summer months, when people travel a lot on holidays instead of going shopping.

    However, sales remain even half below last year’s in some segments such as restaurants and coffee shops, fashion as of mid-2020, so spending intentions have not fully returned.

    Furthermore, the V-shaped recovery of consumption continued strongly in June, with retail sales having recovered three quarters of the decline seen in March and April and overall sales turning positive for the year in the January-June period.

    While the future path of the recovery will depend on how the pandemic situation evolves, as well as the dynamic of the labour market, it is clear that things are moving much faster than with the previous recession: retail sales do not return, in real terms, to levels seen in 2008’s summer until mid-2015.

    Statistical data suggest that the recovery is quite uneven, with clothing sales lagging quite a lot as spending shifted in the last couple of months towards items like DIY or sportswear (including camping).

    The vacancy rate remains low in the dominant shopping centers

    While the dominant shopping centers fared well and have not seen an uptick in vacancy, others have felt something like this, though vacancy remains, for the most part, manageable, in single digit territory, maybe increasing from sub 2% levels – including non-existent – towards 5% in good, but not dominant shopping centers.

    It is clear that the times we are living are not easy neither for retailers nor for landlords, therefore the parties are taking a step by step approach in negotiating temporary rent discounts, after  analyzing  the performance of the business at the end of each month.

    Modern industrial and logistic stock reached 4.7 million square meters at the end of June

    Around 120,000 square meters in new modern industrial & logistics spaces are estimated to have come online in the first semester of 2020 throughout Romania, with 100,000 square meters in the vicinity of Bucharest, which is less than half the level seen a year ago.

    Colliers International consultants explain that some clients have decided to postpone their expansion plans for 2021 and also a big part of the speculative developments were put on hold amid the coronavirus pandemic, meaning that we can expect the overall supply for 2020 to be nearly 30% lower than potential at the start of the year.

    The second half of the year is seen to be much more active, with nearly 300,000 square meters in new deliveries expected, two thirds in Bucharest, as quite a few big contracts were signed fairly recently, and the tenants are expecting to move in. This took overall modern industrial & logistics stock to 4.7 million square meters at the end of June, with Bucharest amounting to 2.4 million square meters.

    Healthy competition on the developer side has helped cap rents in spite of the strong leasing market in recent years. Consequently, rents are quite good for tenants, in the area of 3.8-3.9 euro per square meter for prime industrial & logistic spaces around Bucharest and around 3.7-3.9 in other parts of the country (but in very good areas).

    Colliers International consultants note that amid the pandemic, incentives are higher, with landlords offering more rent-free months than before; this means that, in some instances, the net-effective rent can reach some 20% below the headline (versus around 13% before).

    Otherwise, vacancy is still comfortably in single digit territory. It is hovering around 7-8% and has not seen any material changes amid the coronavirus situation.

    Such levels are consistent with a neutral market, but with the significant pipeline of speculative developments (including such deliveries in recent years) plus a competitive market tilting the balance in favour or tenants.

  • Retail trade volumes back to February 2020 levels in Europe

    Retail trade volumes back to February 2020 levels in Europe

    In June 2020, a month marked by some relaxation of COVID-19 containment measures in many EU member states, the volume of retail trade increased by 5.2% compared with May 2020 and by 1.3% compared with the previous year.

    Overall, retail trade volumes returned to the levels recorded in February 2020, before the start of the containment measures, although the trend varies across product groups.

    In June 2020, the sales of food, drinks and tobacco were similar to their February levels (1.3% below February 2020), whereas for some non-food product groups there was still a sizeable gap between now and before the COVID-19 containment measures.

    In particular, June sales of textiles, clothing and footwear accounted for only about three quarters of what was sold in February (22.4% below February 2020).

    Although to a smaller extent, June sales of automotive fuels (-12.5%), computer equipment and books (-8.3%) as well as pharmaceutical and medical goods (-5.9%) also remained below their February 2020 levels.

    In contrast, mail orders and internet volume increased by 17.4% compared to February 2020.

  • Slovakia: Retail turnover reached last year level in June

    Slovakia: Retail turnover reached last year level in June

    In June, the easing of measures taken in connection with the COVID-19 was reflected in positive month-on-month growth in all selected trade activities.

    After three months of more significant declines, turnover of retail trade decreased only by 1,6 % year-on-year.

    Compared with June 2019, three out of nine groups of stores reported higher turnover, in addition to supermarkets and hypermarkets, also specialized stores for households and stores of goods of information and communication technologies.

    Although, the volume of turnover in all selected trade activities did not reach the pre-pandemic level, but in most of them, it approached the volume of the corresponding period last year.

    Turnover of wholesale even slightly exceeded the last year’s volume (by 1,2 %).

    Although, turnover of retail trade and sale and repair of motor vehicles were lower than a year ago, but this was the slightest decline in recent months.

    The development was favourable at the month-on-month level, each of the main activities recorded a growth, turnover of accommodation and food and beverage service activities increased by more than half (in accommodation by 54 % and in food and beverage service activities by 50,5 %).

  • Growth of sale of non-food goods in Czechia in June 2020

    Growth of sale of non-food goods in Czechia in June 2020

    In June, sales decreased in real terms (at constant prices) by 2.0%, year‑on‑year. Sales in retail trade increased by 0.2%, month-on-month.

    Seasonally adjusted sales in retail trade, except of motor vehicles increased in real terms (at constant prices) by 0.2%, m-o-m, in June. Sales for sale of automotive fuel increased by 7.6%, while sales for sale of food decreased by 0.3% and sales for sale of non-food goods dropped by 0.7%.

    Sales in retail trade adjusted for calendar effects decreased by 2.0%, y-o-y. Sales for sale of automotive fuel decreased by 10.8% and sales for sale of food dropped by 3.8%, while sales for sale of non-food goods increased by 1.4%.

    There were two working days more in June 2020 compared to June 2019.

    Non-adjusted sales in retail trade stagnated, y-o-y. Decrease of sale of automotive fuel (by 8.4%) and food (by 3.3%) was compensated by growth of sale of non-food goods (by 4.7%).

    The highest sales growth was in retail sale via mail order houses or via Internet (by 27.8%)

    In specialised stores with non-food goods, sales increased for sale of other household equipment (by 9.9%), information and communication equipment (by 6.1%), cultural and recreation goods (by 4.3%), and dispensing chemist, medical and orthopaedic goods (by 2.3%).

    On the other hand, sales decreased in stores with clothing, footwear and leather goods (by 16.4%).

    Sales for sale of food decreased in specialised stores by 2.4% and in non-specialised stores with food, beverages or tobacco predominating they decreased by 3.4%.

  • In June, retail index in Italy +12.1% over May and -2,2% year on year

    In June, retail index in Italy +12.1% over May and -2,2% year on year

    In June 2020 retail trade in Italy continued its recovery after sharp falls due to the pandemic emergency, shows latest Istat data.

    However, levels of total sales in the month on month series remained lower than levels recorded at the beginning of 2020, before Covid-19 outbreak. Compared with May 2020, estimates of value grew by 12.1%, while volume of sales rose by 12.5%.

    In the second quarter of 2020 the seasonally adjusted index showed a decline, as value of sales decreased by 7.9% and volume dropped by 8.8% compared with the first quarter of 2020.

    In June 2020, value and volume of sales contracted in the year on year series by 2.2% and by 3.5% respectively, after a steeper decline reported in April and May 2020.

    Comparing with the same month a year earlier, large-scale distribution fell by 1.8%, small-scale distribution decreased by 6.4% and non-store sales was down 5.9%.

    Internet sales reached a record 53.5% when compared with June 2019, confirming a shift within the retail trade to online sales.

    Looking at the value of sales for non-food products, data outlined a mixed picture across different categories in the year on year series.

    Growths were reported for Computers and telecommunications equipment (+15.1%) and Furniture and textile items and household furnishings (+10.4%). The largest drops were reported for Shoes, leather goods and travel items (-12.8%) and Clothing (-12.3%).

  • Property investment market in H1 in Romania increased with 21%

    Property investment market in H1 in Romania increased with 21%

    The total transaction volume in H1 in Romania was still 21% higher than the one registered in the same period in 2019, despite the COVID-19, the market being driven by the office projects in Bucharest.

    Thus, Bucharest accounted for close to 90% of the total transaction volume in H1 2020, estimated at 410 million euro.

    As it was the case in the last 5 years, market volumes in H1 2020 were dominated by office transactions. They represented 85% of the total, while industrial accounted for over 8%.

    Covid-19 impact

    The Covid-19 outbreak had a strong impact on the investment real estate market in Romania. Many of the on-going deals were put on hold during the lockdown period which lasted from 15th of March until 15th of May.

    Towards the end of H1 however activity started to come back with several major transactions in progress once again. A handful of office sales were completed in Bucharest in Q2 2020 as the discussions were very advanced before the pandemic.

    The majority of the local owners have had to focus on asset management and implementing the new rules for adjusting the buildings to the new reality.  

    Compared to the same period last year, the number of transactions remained stable, with the average deal size increasing to €27 million, mainly due the signing of several very large deals which includes Pan-CEE portfolios and sizeable assets.

    Transactions in H1 2020

    The largest transaction registered in the first half of 2020 was the sale of approximately 61.49% of the GTC portfolio.

    Other notable office transactions in Romania were the acquisition by local group Dedeman of the third phase of The Bridge -a 21,100 m² building part of a 80,000 m² office park in the Center-West of Bucharest, the acquisition of Global City Business Park, a 50,000 m² park in the Pipera North area of Bucharest by Arion Green Investment and the acquisition of 50% of Renault Business Connect in the West of Bucharest by Globalworth.

    The only retail transaction concluded in H1 2020 was the acquisition of Oradea Plaza, a mixed-use project, by Lotus Centre, a local group based in Oradea. 

    The largest industrial transaction was the acquisition of Equest Logistic Park located on the A1 Highway, at Km. 13, the most important logistic sub-market in Bucharest. Through this acquisition, CTP consolidated its position as the largest owner of industrial/logistic space in Romania and one of the two dominant players in that particular sub-market.   

    One hotel was transacted in H1 2020, Golden Tulip on Calea Victoriei, which marked the entrance on the local market of Fattal Group.

    Local capital is starting to play an increasing role in the Romanian investment market

    Romanian buyers accounted for 28% of the transaction volume in 2019 and 35% in H1 2020. The most active players were Dedeman, One United, Lotus Centers or Element Industrial.

    Prime office yields are at 7.00%, prime retail yields at 7.00%, while prime industrial yields are at 8.00%. Yields for retail and industrial are at the same level as 12 months ago, while office yields have compressed by 25 bps over the year.

    CEE Prime Yields (%) – Q2 2020

    Country/sectorOfficeRetail (shopping centers)Industrial
    Czech Republic4.255.155.50
    Poland4.505.156.25
    Hungary5.256.007.00
    Slovakia5.755.755.85
    Romania7.007.008.00

    Over 6.4 billion euro invested in properties in CEE market

    During the first six months of 2020 the CEE investment market saw a number of transactions for a total of over €6.4 billion, according to JLL CEE Investment Market Report, H1 2020.

    With over 46% of that amount, Poland persisted its dominance among CEE countries.

    Despite the outbreak of COVID-19, the investors activity remained at extremely high level in H1 2020, and the market experienced continuation of trends that have already been observed for some time.

    In H1 2020, Czech Republic recorded the largest deal in its history with the Residomo transaction of €1.3 billion. Nevertheless, the total number of transactions and consequently the total investment volume were significantly affected by the global pandemic.

    The uncertainties associated with the COVID-19 did not refrain strong investment activity in Hungary, where a 6% increase of the transaction volume, compared to the same period of 2019, was recorded.

    The remainder of 2020 should be busy for market players acting on the CEE investment market, especially considering the growing interest in the industrial sector which seems to be the least affected by the global pandemic.

  • Italy: Retail trade index rose by 24.3% in May 2020

    Italy: Retail trade index rose by 24.3% in May 2020

    In May 2020 value of Istat retail trade index rose by 24.3% in the month on month series, after plummeting at record levels in March and April, due to restrictions and temporary closure of stores during Covid-19 pandemic.

    Volume of sales grew by 25.2% when compared to the previous month.

    Despite the increase in the month on month series, the underlying pattern in the three months to May 2020 shows a decline, as both value and volume of sales fell by 20.6% and 21.8% respectively.

    When compared with May 2019, the value of sales dropped by 10.5% and the volume was down 11.9%

    Internet sales increased by 41.7% when compared with the same month a year earlier, the highest growth on record, suggesting a shift within the retail trade to online sales.

    Looking at the value of sales for non-food products, a fall was seen across most of the categories in the year on year series.

    This drop resulted in low levels for Clothing (-38.1%), Optical instruments and photographic equipment (-37.4%), Shoes, leather goods and travel items (-34.8%). Growths were registered for Computers and telecommunications equipment (+12.4%) and Tools (+5.6%).

  • Sales of retail shops in Hungary decreased by 2.1%

    Sales of retail shops in Hungary decreased by 2.1%

    In May 2020 the volume of sales in retail shops decreased by 2.8% according to raw data and by 2.1% when adjusted for calendar effects compared to the same period of the previous year, shows KSH.

    The volume of sales, adjusted for calendar effects, rose by 1.8% in specialized and non-specialized food shops, by 0.7% in non-food retail shops and decreased by 13.8% in automotive fuel retailing.

    In January–May 2020, the volume of sales – also according to calendar adjusted data – was 1.5% higher than in the corresponding period of the previous year.

    Declining retail sales in May 2020 were largely driven by the impact of the coronavirus epidemic, with epidemic emergency causing an 8.6 percentage point decrease, turning the estimated 6.5% increase without the epidemic into a 2.1% decline.

    The volume index for non-food retail shops was 11% lower, while automotive fuel retailing was 19 percentage points lower than previously estimated. Food store sales were only slightly affected by the impact of coronavirus.

  • Volume of retail trade up by 17.8% in euro area in May 2020

    Volume of retail trade up by 17.8% in euro area in May 2020

    In May 2020 the volume of retail trade increased by 17.8% in the euro area and by 16.4% in the EU, compared with April 2020, according to estimates from Eurostat.

    In April 2020, the retail trade volume decreased by 12.1% in the euro area and by 11.4% in the EU.

    In May 2020 compared with May 2019, the calendar adjusted retail sales index decreased by 5.1% in the euro area and by 4.2% in the EU.

    In the euro area in May 2020, compared with April 2020, the volume of retail trade increased by 38.4% for automotive fuels, by 34.5% for non-food products and by 2.2% for food, drinks and tobacco.

    In the EU, the volume of retail trade increased by 31.9% for automotive fuels, by 30.2% for non-food products and by 2.1% for food, drinks and tobacco.

    It can be noted that the volume of retail trade in textiles, clothing and footwear rose by 147.0% in the euro area and by 130.7% in the EU.

    The volume of retail trade increased in all Member States for which data are available, except in Bulgaria, where it remained unchanged. The highest increases were registered in Luxembourg (+28.6%), France (+25.6%) and Austria (+23.3%).

  • Czechs plan to spend less in shopping centers than before Covid-19

    Czechs plan to spend less in shopping centers than before Covid-19

    Ipsos Research results suggest that a decrease in shopping centre traffic can be expected in Czechia.

    Before the pandemic, two-thirds of the population visited shopping centers at least once every 14 days, most often people from large cities with more than 100,000 inhabitants. 

    However, 24% of visitors now plan to visit shopping centres less frequently or not at all. Only 5% are planning more frequent visits, especially regular visitors.

    A decrease in spending in shopping centres can also be expected

    Before the pandemic, the normal spend per visit was between CZK 500 and CZK 2.000. 

    A quarter of visitors (24%) says that it will now spend less money in shopping centres, only 3% plan to spend more.

    Women and young people under 35 want to spend less.

    7 out of 10 Czechs are not worried about visiting shopping centres

    For greater sense of security, visitors would welcome more disinfection, checking compliance with hygiene regulations and limiting more people.

    The concern of a part of the population is also confirmed by a significant increase in the number of visitors preferring to transport to the shopping centre by own car (63%, before the pandemic it was 51%) at the expense of public transport.

    In early June, 42% of people restricted public transport due to fears of contagion, while 64% tried to avoid places with higher concentrations of people.

  • Klarna enters Spain retail market

    Klarna enters Spain retail market

    Klarna officially launches in Spain by introducing ”Pay in 3”. Shoppers who use Klarna in a retailer’s checkout will be able to buy online and split their purchase into three equal payments with no added interest.

    Klarna will go live with Michael Kors at the end of July with many more well-known brands to follow shortly.

    With the launch of ”Pay in 3” (”Paga en tres plazos”), Spanish shoppers will be able to spread the cost of their purchase over three instalments, charged every 30 days.

    The payment solution comes at no interest or fee when users pay on time. A

    long with the new offer, Klarna will also introduce the Klarna app shortly which allows users to keep track of their payments, pay off existing payments, as well as find inspiration. 

    Spain is more digitalized as ever

    Klarna is launching in Spain at a time when the Spanish society becomes more and more digital.

    According to Statista, revenue from eCommerce in Spain is expected to grow on an annual growth rate (CAGR 2020-2024) of 7.6%, resulting in a projected market volume of €22.9 billion by 2024.

    This is also shown in other figures: 7 in 10 Spaniards between 18-65 years old bought online in 2019, which represents almost 20.3 million people.

    Although the computer is still king, is the fact that the use of mobile for eCommerce grows steadily year over year and it is already being used by 53% of online shoppers (VI Annual Study of eCommerce in Spain, IAB Spain and Elogia, 2019).

  • Retail sales in Poland, 7.7% lower than the year before

    Retail sales in Poland, 7.7% lower than the year before

    In May 2020 retail sales at constant prices were by 7.7% lower than the year before (against a growth of 5.6% in May 2019).

    Compared with April 2020 retail sales increased by 14.9%.

    In the period of January-May 2020 retail sales were by 6.2% lower (against a growth of 6.5% in 2019).

    In May this year compared with the previous month, a drop in retail sales value via internet was recorded (by 12.7%). The share of such sales (in current prices) decreased from 11.9% in April this year to 9.1% in May this year.

    A decline in the share of sales via Internet was reported by enterprises classified into the group “textiles, clothing, footwear“ (from 61.3% a month before to 26.8%) as well as by entities from groups “newspapers, books, other sale in specialized stores” (from 39.9% to 25.2% respectively) and “furniture, radio, TV and household appliances “ (from 28.6% to 15.6%).