OUTLOOK 2024: “Shopping centers are particularly well positioned to anticipate and adapt to”

Shopping centers have once again proven to be a resilient and stable asset class, despite the crises and challenges of recent years.

The positive turnover development for the tenants in the centers and the good demand from retailers for rental space in the centers in 2023 are just two indicators. To name just one figure: At the centers operated by ECE Marketplaces, we will reach a leasing performance in 2024 of approx. 800,000 sq m of leased retail space in the centers – a plus of 45 percent compared to the previous year.

Thus, despite the challenges and ongoing structural change in the retail sector, the retail real estate segment is still experiencing dynamic momentum and an intensive process of change, but shopping centers are particularly well positioned to anticipate and adapt to due to their flexibility and adaptability.

I therefore expect that 2024, on the one hand, will continue to bring challenges for individual sites and concepts as well as for the type of industry as a whole as we will probably see further structural changes at the retailer market as the developments of recent years will continue intensely.

At the same time, however, there will be a whole range of opportunities to further develop the centers and to accompany the ongoing transformation process positively and successfully by implementing and driving forward the strategic approaches and concepts on hand individually for each asset:

These range from a continuous renewal and extension of the tenant mix, with innovative concepts and new branches, to the constant further development of the assets through the integration of new offers and services as well as the property-specific addition of selected non-retail offers from segments such as medical services or complementary mixed-use concepts.

Referring to the transaction market, it is conceivable that we will see some interesting deals again in 2024, since many investors are once again focusing on the strong stability and stable long-term yields of investments in retail real estate, while at the same time, the price level remains attractive for an entry into well-managed, well-positioned properties.

Last but not least, ESG will continue to be an important and even increasingly significant topic for the retail real estate industry, by putting an ongoing focus on energy efficiency and the road to climate neutrality, but also by increasingly emphasizing the S and G in ESG.

Joanna Fisher

Joanna Fisher is CEO of ECE Marketplaces, and Member of the ACROSS Advisory Board.