From our roundtable events, and from my conversations here in Saudi Arabia, it’s clear there’s renewed appetite among family-owned businesses in the Middle East and Asia to invest in Western retail.
The recent acquisition of Selfridges by Thai conglomerate Central Group, owned by the Chirathivat family, is one example of this trend. And for those taking a long-term, patient capital view, now seems a great moment for opportunistic investment into a distressed European market.
According to real estate advisor, Savills, investor confidence in European real estate is strong. In 2021, European property investment volumes were up 13% year-on-year; the UK retail sector saw a rise in opportunistic interest; and secondary retail assets in Poland were being traded at double-digit yields.
But as the East looks West for investment opportunities, the West should now look East for influence and inspiration. European owners and developers certainly have lessons to learn from Asia.
The first of these lessons is that retail is alive and well. Yes, the monocultural Western shopping centre is defunct. Yes, the homogenous high-street has had its day. Yes, the rise of
e‑commerce is a reality. And of course, covid has hit the industry hard. But retail is far from dead.
One only has to visit Starfield Hanam in South Korea, Hangzhou Joy City in China, or Siam Discovery in Bangkok, to see the possibilities for in-store retail environments. The rich mix of uses and experiences; the colour, creativity and entrepreneurial flare; and the high footfall these vibrant destinations generate.
Ironically, ‘the mall’ was first exported West-to-East back in the 1990s, based largely on Benoy’s Bluewater model. Over the past 25 years, due to urban density, that model has evolved into the innovative mixed-use retail developments you see in Asia today. And with the pendulum swinging back the other way, it’s these bold and blended concepts that could now help to reinvigorate the Western retail sector.