US retail real estate pricing rebound looks unlikely – COPY

Much has been written about the rebound in US retail fundamentals with some real estate commentators suggesting that the strengthening near-term demand outlook for the sector will result in increased investor interest and a recovery in pricing levels, specifically for the wearied mall segment. We believe this argument is overblown.

• Our current retail forecasts call for market returns that are markedly weaker than pre-Covid performance.
• The flood of capital chasing real estate and driving down yields elsewhere in the property market will likely bypass retail as yields soften over the near term.
• While fundamentals have improved recently, the temporary cyclical recovery will soon wane and the structural headwinds facing the sector will take centre stage once again.