Boom in US Retail Real Estate Defies Prediction of Ecommerce Apocalypse

Vacancies at open-air shopping centres in the US have dropped to historically low levels [non-paywalled source], defying forecasts of a retail apocalypse caused by the rise of ecommerce. From a report: Landlords of complexes anchored by big-box chains, discount merchants and supermarkets have gained power to raise rents as leases expire. New construction has been stymied by higher interest rates and soaring building costs. Scarcity in the market had disproved long-standing beliefs about retail real estate, said Brandon Isner, head of retail research at Newmark, a commercial property broker. "They would say, 'Retail is overbuilt. Retail is struggling. Ecommerce is going to take over brick-and-mortar retail.' And really none of that has ended up to be true," Isner said. Retailers plan to expand further in the years ahead, led by discount chains favoured by inflation-weary consumers seeking deals. Off-price clothing and decor chains Burlington Stores, Ross Stores and TJX, parent of the Marshalls and TJ Maxx store chains, have together added 339 US stores in the past year. Walmart intends to add 150 US locations over the next five years.

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