New York -- Retail expansion in the United States has not come to an end, but its focus has shifted. That’s one of the findings contained in the 2014 ChainLinks Retail Advisors U.S. National Retail Investment Forecast Report.
The study finds planned potential unit growth is up in 2014 about 3% compared to this time last year. Some categories, including apparel, gifts, electronic goods and books, are relatively flat or even in contraction mode. But food-related uses, ranging from grocery stores to restaurants are up, as is service-related retail, automotive users (such as Autozone or Pep Boys), financial services related players, and medical users looking for retail outlets.
“Growth continues to be propelled by space users impacted by the economy; luxury retail is back on the nation’s high street retail districts while discounters of all stripes (ranging from dollar stores to off-price apparel and low-end groceries) continue to gobble up space at a robust pace,” the report states. “Meanwhile, food and service related users have more than picked up the pace from hard goods players (impacted by e-commerce) that have put bricks and mortar growth plans on hold or that have considerably reduced them.”
The end result is that, despite the growth of e-commerce, retail fundamentals continue to improve in the United States, accord. Of the 60 major metropolitan markets that ChainLinks tracks, 41 recorded the same or decreasing vacancy levels over the course of 2013.
According to ChainLinks, the return of new construction has played a role in slightly increasing vacancy levels in a number of major U.S. markets, including; Kansas City (10.0% to 10.2%), St. Louis (10.9% to 11.0%), Chicago (9.8% to 11.0%), Cleveland (12.3% to 12.7%), Detroit 11.8% to 12.0%), Milwaukee (10.3% to 10.4%), Charlotte (9.7% to 9.9%), Hampton Roads (7.8% to 8.8%), Raleigh/ Durham (7.1% to 7.2%), Tampa Bay (9.1% to 9.3%), Philadelphia (7.6% to 7.9%) and Boston (5.3% to 6.7%).
“In nearly all of these markets, we expect recent vacancy upticks to be short-lived as strong demand remains in place for Class A space in every one of these trade areas. There is also increasing demand for Class B space in most of these markets — particularly as Class A availability continues to tighten with asking rents growing aggressively,” the report states.
Indeed, the report finds that in every market surveyed, brokers report a shortage of Class A shopping center space. This holds true for San Francisco, New York, Boston, San Diego, Washington, D.C., San Jose, Philadelphia, Seattle, Baltimore, Miami, Los Angeles or Pittsburgh (some of the lowest vacancy marketplaces over the past few years) or Detroit, Cleveland, Louisville, Atlanta, Inland Empire, and Indianapolis.