德银-亚太地区-零售和房地产行业-_零售不愉快零售地产业：赢得电子商务游戏-20171213-132页_4mb

Summary of "Retail and Retail Real Estate - Winning the E-commerce Game" (APAC Retail and Property, 13 December 2017)

Core Content

This report analyzes the impact of e-commerce on the retail and retail real estate sectors in the Asia-Pacific region. It highlights how the rise of e-commerce has redefined shopping behavior and forced traditional retailers and real estate developers to adapt to new market realities. The report emphasizes that while the U.S. has faced significant challenges from online retail, the APAC region is better positioned due to its diverse market conditions, strong consumer base, and evolving retail strategies.

Main Views

Retail: Converging Trends, Diverging Paces

• E-commerce Impact: The growth of e-commerce has slowed offline retail expansion and disrupted traditional business models, especially in countries with high online adoption like China and South Korea.
• Market Classification: APAC countries are classified into three categories based on e-commerce development:
  • Pioneers: China and South Korea, with high adoption and strong digital infrastructure.
  • Laggards: Singapore and Hong Kong, with slower online growth and less tech penetration.
  • Co-existence: Japan and Australia, where offline retail remains dominant and online retail co-exists with it.
• Survival Strategies: Successful retailers in APAC have adopted integrated online/offline strategies, leveraging technology and O2O (online-to-offline) models to stay relevant.
• Key Winners: Companies like Fast Retailing, Emart, YUM China, Anta, and Robam have shown resilience and growth through digital innovation.

Real Estate: Performance Polarization

• Retail Real Estate Trends: The real estate market is increasingly polarized, with well-managed malls outperforming smaller, less efficient retail spaces.
• Rental Outlook: Despite a cyclical recovery in retail sales, we expect subdued rental growth due to structural challenges. Rental growth is most optimistic in China and least in Hong Kong.
• Destination Malls: These are seen as the future of retail real estate, with higher foot traffic and better performance, especially in major cities.
• Cap Rate Compression: Retail cap rates have compressed in most markets, indicating potential undervaluation and opportunities for investors.

Key Information

E-commerce Disruption

• E-commerce has evolved from selling standardized goods to more diverse and premium products, reshaping consumer behavior and retail formats.
• The disruption has been most severe for department stores, which have seen a significant decline in sales and market share.
• The report outlines four stages of e-commerce evolution, each impacting different retail formats and categories differently.

Investment Opportunities

• Preferred Retailers: Yum China, Fast Retailing, Anta, Robam, and Emart are highlighted as strong performers with effective online strategies.
• Preferred Real Estate Developers: Diversified real estate developers with significant retail exposure, such as Longfor, CapitaLand, and Stockland, are recommended for investment.
• Valuation Insights: The market is pricing in overly pessimistic scenarios, suggesting that well-managed retail portfolios may be undervalued.

Regional Insights

• China: A pioneer in e-commerce with high online penetration and a strong shift toward omnichannel retailing.
• South Korea: High e-commerce adoption and aggressive online strategies by leading retailers.
• Japan and Australia: Co-existence of online and offline retail, with strong consumer preference for physical stores.
• Hong Kong and Singapore: Lagging in online adoption, with more subdued growth in e-commerce and retail real estate.

Key Figures and Data

• E-commerce Penetration: Varies significantly across APAC countries, with China and South Korea leading in adoption.
• Retail Space per Capita: Asia-Pacific has much lower retail space per capita compared to the U.S., with Australia having the highest and China the lowest.
• Rental Growth Projections:
  • Australia: 0-2% in 2018, 2% in 2019
  • China: 2-3% in 2018, 2-3% in 2019
  • Hong Kong: -3% in 2017, -7% in 2018, -7% in 2019
  • Japan: 0% in 2018, -10% in 2020
  • Singapore: -3% in 2017, 0% in 2018, 2% in 2019
• Cap Rate Trends:
  • Retail cap rates are generally above long-term averages in most markets.
  • The report suggests that the market is over-pessimistic in pricing scenarios, especially for well-managed retail assets.

Conclusion

The APAC region, despite the challenges posed by e-commerce, is better positioned to adapt and thrive compared to the U.S. Traditional retailers and real estate developers must innovate and adopt integrated online/offline strategies to remain competitive. The report identifies key winners in both retail and real estate sectors, emphasizing the importance of agility, strong brand equity, and efficient management in navigating the digital transformation.