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Online and offline retailing in SEA expected to merge, says CBRE

Landlords need to play their part to stay ahead in a fast-changing retail landscape where consumers transit from physical to digital platforms, according to CBRE’s latest Southeast Asia (SEA) retail publication.

Some retail developments in SEA may have to close down or face high vacancy and low footfall as they fail to capture consumers and retain tenants, according to CBRE. One of the suggested strategies is by combining channels — landlords can acquire e-commerce platforms or set up logistics networks to give consumers the fully integrated omni-channel experience.

The integration of an established shopping centre operator with an online platform that provides click-and- collect or from-store-to-door services builds a stronger level of reliability and trust among consumers. Both physical and online-only retailers are more likely to expand their footprint in such shopping centres as well.

Store-based retailing will remain the key point of purchase among SEA consumers in the next five to 10 years, and account for at least more than 90% of total sales value, adds CBRE. It is expected to see compounded annual growth rate (CAGR) of 1% to 4.5% from 2015 to 2020.

From 2010 to 2015, developers had been ramping up retail supply, which had a CAGR of 4% to 5% in the key SEA cities, including Bangkok, Hanoi, Ho Chi Minh City, Jakarta, Kuala Lumpur and Singapore. CBRE estimates that about 43.1 million sq ft of retail stock will be completed in the next three to five years across these cities.

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