German retailers remain confident about their own market, with 29 out of the 42 German retailers (69%) looking to expand domestically.
Poland emerged as the second most popular retail market in the region, with 33% of retailers targeting the country, followed by France (33%), Spain (30%), and the UK (29%) to round out the top five most popular markets for retailer expansion in 2011. CBRE's research report, 'How Active are Retailers in EMEA?', examines the attitudes and 2011 expansion plans of 212 leading retailers, based on interviews conducted over the summer of 2010.
Before the end of 2011, international retailers intend to expand their store networks into 38 countries across EMEA, reflecting their ambitious and growing expansion plans across a wide range of markets. Whilst the core Western European markets remain a popular target, representing seven of the top 10 country targets for expansion next year, many retailers are now also preparing to expand into the emerging markets of the region. This is backed by the number of emerging markets which have risen into the top destinations list for 2011, now accounting for half of all the top 20 targeted countries. Moreover, 41% of retailers are targeting at least one country in Central Europe and 39% are targeting Southern Europe.
Poland leads the way as the most targeted “emerging” market and the leading destination in Central and Eastern Europe (with 33% of retailers), sustained by one of the strongest economies and an undersupply of good quality retail space. Russia and Czech Republic also feature in the top 10 most targeted in 2011, at sixth and seventh places respectively. Other emerging markets populating the top 20 list include Hungary, Bulgaria, Romania and Turkey. This trend is likely to continue as retailers look to the emerging markets for new revenue growth as the scope to expand further in their domestic markets diminishes.
The survey also revealed that France is the top choice of markets for international retailers (that is, excluding domestic expansion), with some 33% of retailers surveyed targeting the country. German retailers remain confident about their own market, with 29 out of the 42 German retailers (69%) looking to expand domestically. This is due to Germany’s ability to offer five or six key cities, compared with one or two in other major markets. In Spain, less than one-third of domestic retailers are planning to open new stores in their home market, as retailers look to balance their portfolios by moving into new markets. However, some international retailers are using this domestic demand gap as an opportunity to enter the Spanish market, on the back of cheaper real estate and the demise of weaker retailers during the recession.
“Hungary is ranked 13th on this list with 22% of international retailers expressing their wish to expand to Hungary, up from 18% last year. Current ranking of CEE countries corresponds to the relative economic position. It is no wonder that Poland and Russia are the most interesting new markets,” commented Gábor Borbély CEE regional analyst of CBRE.
“These countries are followed by Czech Republic and Hungary as the next largest economies in the region, both up from last year’s position. Slovakia and Romania, however, slid back on the list.”
Source: CB Richard Ellis