Asian Retail Resilience: Have Store Hours Affected Performance? (MSCI)

  • Globally, industrial real estate assets have outperformed retail assets in recent years, with the gap widening as e-commerce growth has boosted the industrial sector while weighing on retail returns.
  • The trend has been most pronounced in Western markets, but less notably in Asia, where several factors (from macroeconomic fundamentals to differences in retail culture) have potentially led to a more resilient retail performance.
  • The divergence between Western and Asian markets highlights how nuanced real estate can be and why investors may look beyond headline trends to better understand their portfolio exposures.

As technology and consumer behaviors have evolved, real estate investors have increasingly faced a widening performance gap between their retail and industrial exposures — particularly in markets such as the U.K., U.S., France, Canada and Australia. Notably, though, in parts of Asia, retail assets have outperformed industrial assets. While there are numerous factors that could have contributed to this trend, could something as mundane as differences in retail trading hours have played a role in this divergence? Possibly, but there is a large range of factors that are probably at play — from broad macroeconomic trends to differences in retail culture and the way people use shopping centers. Looking beyond headline trends can therefore be important for investors wanting to better understand their real estate exposures. READ MORE

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