Published on 22 Jan. 2022 at 8: 00
Following an exceptionally turbulent 2020 year, retail has picked up. “After the announcement of the end vaccine 2020, we remained in a period of uncertainty until April 2022. Since May and the increase in the vaccination rate, activity has returned to almost normal and 2021 has started well”, summarizes Cédric Ducarrouge, manager of the rental activity. commercial in France at JLL.
Each time, at the end of confinements and the reopening of so-called “non-essential” businesses and large shopping centers, customers returned to “hard” stores. Figures from Panel Retail Int. for the Alliance du Commerce, which brings together 100 brands, certainly indicate a drop in 16 % of clothing sales – the market most affected by sanitary measures – in 2021 compared to 2019. But, “excluding the closing period, in-store activity has shown resilience since it is up slightly by 1% compared to 2019 , and 4% compared to 2020”, notes the panelist.
Discount and leisure
Real estate professionals are finding that commercial vacancy is even starting to fall slightly. The empty premises of occupants in the streets and shopping centers would therefore not be multiplying, contrary to the impression given by certain arteries, in particular in Paris.
New players in the catering or discount sectors, such as the Dutch Action, are investing in the sites left vacant by the brands in difficulty, which, moreover, never completely disappear and find buyers, like La Halle. Actors in the medical, leisure – escape games, fitness – or urban logistics sectors also take up square metres. “Dark stores” – those stores designed for online sales – have appeared for fast delivery.
The vacancy rate has thus decreased by one point in 2021 compared to 2020 for shopping centers. It was still last year at 13 %, and at 11 % for city center businesses. In “retail parks”, these outlying centers which line up boxes between which customers circulate in the open air, it remained limited to 8%, according to JLL. Small shopping centers held up better than large ones.
These are averages that mask very different realities. “Commercial vacancy is at 5% in Lyon, but it can go up to 22% or 50% in certain city centers”, notes Cédric Ducarrouge.
The black point of the boulevard Saint-Michel in Paris
In Paris, the situation varies enormously depending on the sector. The vacancy is, for example, “virtually zero rue de Passy, an artery which attracts a local population with very high purchasing power”, observes David Bourla, director of studies and research at Knight Frank. On the other hand, it is at an impressive level (18, 7%) boulevard Saint-Michel, the point black of the capital.
A little everywhere, the reduction of the vacancy was done at the price of reductions in rents. All the more justified as attendance is far from having regained its level before the Covid-epidemic-19. In the shopping streets, it fell by 22%, according to JLL. “We have lost flows of tourists, of working people – with the development of telework – and e-commerce has continued to gain market share”, notes its expert.
The attendance observatory of the specialized trade federation Procos, managed with Stackr, shows a structural downward trend. On a basis 100 in 100, the rate has dipped to 61,3 in 2021 for centers- cities. The shopping center index stands at 71.
The adjustment of the rental values was done at the end 2020 and at the beginning 2021. The declines were between 5% and 20% depending on the type of assets and their location, indicates JLL . Here and there, some sectors are still at risk. Like Boulevard Haussmann in Paris, which has suffered greatly from the absence of foreign tourists, notes Knight Frank.
Savings and tourists
Traders are calling for the volatility of activity to be taken into account in the construction of rents. They are asking for a reform of the commercial rent index attached to the majority of leases. Today, it is partly indexed to the construction cost index and only marginally takes into account the drop in turnover when it occurs.
For 2022, “the real question is inflation and the propensity of households to dip into their savings to support consumption,” notes David Bourla. The other uncertainty – especially for the Parisian trade – concerns the return to France of foreign customers.
“Some shopping centers and shopping streets risk having many square meters permanently empty, believes Cédric Ducarrouge. They will have to rethink themselves and become mixed assets with office and housing”. The transition will be difficult.
A source of optimism is the freeze that the Climate Law imposes on the creation ex nihilo of new commercial complexes. Mechanically, the measure restores value to existing equipment.