To mitigate global economic risks
International property retailers pursue their expansion plans into other growing markets, including the Philippines, to offset the impact of global economic risks, real estate adviser CBRE said.
In its report titled “How Active are Retailers Globally,” CBRE said retailers remain optimistic about expanding their physical store networks amid current challenges to the global economy.
“In 2016, we expect to see global economic recovery to continue at a steady pace, with modestly improving growth in many mature markets,” CBRE said, citing rising United States interest rates, the Chinese Yuan depreciation, and a financial crisis in one or more emerging markets as possible headwinds.
CBRE said global retailers are targeting a wide and diverse range of markets in 2016, with core Western Europe at the top of the agenda.
“Despite worries about the Chinese and US economies, retailers still see potential in these markets and are looking to make inroads there in the coming year,” CBRE said.
The firm ranked the top countries that retailers are targeting this year, with Germany, France, United Kingdom, China, and the United States taking the top five spots, respectively.
Meanwhile, the Philippines also made it on the list, ranking number 30 among 74 countries listed by CBRE.
“Brands are also looking further afield this year to try and gain market share, with markets such as Colombia, Egypt, and the Philippines being targeted,” CBRE reported.
The real estate firm noted, though, a ‘cautiously optimistic’ trend among global retailers, as only 67 percent said they are looking to open more than 20 stores this year.
CBRE said two of the biggest risk factors from brands this year are the escalating costs of occupation and operation and unclear economic prospects.
“Lack of quality space was also significant, especially for Food & Beverage (F&B) retailers,” the CBRE report said.
“Brands from Asia Pacific were particularly concerned about changes in consumer behavior,” CBRE cited for instance.
It added that about 83 percent of brands think that their physical store expansion plans will not be affected by the growing e-commerce industry.