Lack of Property Transparency is One of the Greatest Challenges for Retailers Entering New Markets

CB Richard Ellis, the world’s largest property advisory firm, has called on retailers to place greater priority on their property strategies.

For retailers with international ambitions, property decisions are ever more complex and represent a considerable challenge. A lack of transparency in the property market, not only in emerging markets but even in parts of Asia compounds the difficulties.

The property related risks and opportunities associated with entering new markets were discussed by leading retailers at the inaugural World Retail Congress in Barcelona. Marks and Spencer, Fast Retailing, Harvey Nichols and METRO Cash and Carry joined Bryn Davies, Executive Director, Retail Services, CB Richard Ellis in Greater China, to discuss the impact of international property decisions on retailers’ business fortunes.

“It is no coincidence that the world’s most successful retailers are those that place as much importance on their property strategy as they do on the product they sell,” said Bryn Davies. “Total alignment of a retailer’s business ambitions with their property plans is a key factor for success. This clearly becomes more challenging when retailers move outside the familiarity of their domestic markets and more challenging still when these markets are less mature. Differences in sourcing retail estate, lease law, costs of occupation, planning and tax regimes are material and not always straight-forward.”

To help improve transparency and local market understanding, CB Richard Ellis has launched ‘Understanding Retail Destinations’, the first global guide to retail real estate.

This extensive guide incorporates all major retail locations worldwide – 82 cities across 46 countries - and provides a unique comparison of distinctive retail characteristics at an international, regional and local level. Compiled by CB Richard Ellis’ global retail network, the guide answers the questions most frequently asked by clients.

Bryn Davies continued, “With the accelerating pace of globalisation, truly international property understanding will only become more important. Retailers need to be confident that their property interests will serve their long term business needs.”

“It is incumbent on the property community to improve real estate transparency and help the retail industry understand the background to their decisions in a more comprehensive way. ‘Understanding Retail Destinations’ represents the first in a series of steps to work in close association with the retail industry to generate more readily available information and help retailers to make more informed property decisions.”

CB Richard Ellis’ global network will be producing a series of detailed country briefings which will provide advice for retailers planning entry into a new market. Aspects to be covered include what to expect in property transacting, how to effectively source real estate, franchise models which exist and, a review of the domestic and international retailers present. These briefings will provide a more comprehensive assessment of risk, as well as opportunity.

Since CB Richard Ellis was first established in Hong Kong in 1978, the company has grown to become one of the leading International Property Consultants in Greater China.