GLOBAL SHOPPING CENTRE YIELD BENCHMARKING SURVEY

CBRE International Valuation is pleased to present our fifth Global Shopping Centre Benchmarking Survey (GSCYB).

The comprehensive document spanning 160 pages is available on request, please find a summary of the key findings below.

With some USD 160 billion invested globally into retail real estate in 2016, now more than ever it is essential for sophisticated investors to establish a deep understanding of the relativities between returns delivered across major markets.

The extent to which yields are influenced by economic, property and risk factors as well as the relative impact of each in any individual market is important; particularly for investors who seek to understand where opportunities may lie.

The need to identify opportunities, in a crowded investment universe full of mixed signals, therefore renders robust cross-border comparison an essential tool of analysis.

THE SURVEY

Covering the entire spectrum of global real estate markets, investigating 61 locations to determine the common drivers that materially influence shopping centre yields and aiding the formation of opinions on opportunities based on their economic, property and risk structure.

KEY FINDINGS

• Economic and political risk is a key factor in every instance, but accurate measurement and application of the components is critical, as weightings can differ vastly between core and emerging markets.
• Factors such as geographic proximity, market liquidity and transactional volumes are seen to bring a level of transparency and de-risking that is typically not sufficiently reflected in country risk profiling.
• GDP growth is fundamental in modelling investment destinations, although superior alternatives are identified as providing more accurately correlated growth inputs for certain types of markets.
• Funding availability is a key driver of yields, although the availability and use of debt typically has more pronounced influence in the core markets than the emerging.
• There is a growing group of countries where market performance and fundamental drivers do not both align clearly to either core or emerging markets, indicating the existence of a middle ground of “emerged but not yet core”.