Urban Renewal & International Diversification Buoy MAPIC Mood

16-18 November 2011 - Palais des Festivals, Cannes

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Nov 21, 2011, 01:32 ET

CANNES, France, Nov. 21, 2011 /PRNewswire/ -- Consumer spending may be under pressure in certain European countries, but that didn't dampen the mood at the 17^th edition of MAPIC, where international retail and real estate executives met with investors and urban administrators for three days of high-octane business.

With over 8,000 delegates from 62 countries in Cannes, MAPIC attendance rose by 9% compared to 2010. Over 300 retail companies attended MAPIC for the first time, pushing the number of retailers in Cannes to 2,300 delegates, 12% up on 2010. The total number of companies in Cannes reached 3,350, 14% more than last year.

And the word on the MAPIC floor was that major cities, particularly in Europe, are looking to retail to drive centre-city urban regeneration, while international retailers are continuing their geographical diversification.

"When you look at Berlin, London, Paris or Milan, the demand for prime retail locations is as strong as ever," noted Tony Danaher, Chairman of international communications consultancy FTI, which includes Tesco and CBRE among its clients. "We're also seeing how city administrators are increasingly partnering with the retail sector as part of overall strategies to re-develop city centres. Add to that the strong interest in developing online retailing services and you begin to understand why MAPIC 2011 is buzzing!"

UK developer Land Securities came to MAPIC with the €409 million Trinity Leeds project which is set to open in 2013. A prime example of major centre city retail development, Trinity Leeds will include 120 new shops and restaurants and host international brands such as Hollister, H&M, Primark and Marks & Spencer. "Trinity Leeds is an urban city centre development which will reposition Leeds as the fourth largest retail destination in the UK," commented Land Securities Marketing Manager Claire Reynolds.

As MAPIC progressed, market research released to coincide with the event indicated that investment in retail real estate in 2011 has remained strong. Real estate financial and professional services company Jones Lang LaSalle (JLL) predicted that investment in retail property across Europe will reach €28 billion this year, a 35% increase on 2010.

Commenting on investment levels, JLL's Head of EMEA Retail Capital Markets, Jeremy Eddy noted, "We have seen some major deals in Germany and France. Other markets which will remain a focus for investors include the Nordics, in particular Sweden and Finland." JLL also identified investor interest in the Czech Republic, Poland and Russia. Poland has 45 shopping centres scheduled to open in 2012, while MAPIC saw the size of the Russian delegation increase by 61% compared to 2010, with representatives from 228 Russian companies attending.

Confirming retailers' strategy for international diversification, the much-anticipated annual report 'How Active are Retailers in EMEA,' from the world's largest commercial real estate services firm CBRE, said that 71% of interviewed international retailers plan to open more than five stores in Europe, Middle East and Asia by the end of 2012 and 20% expected to open 40 stores or more.

The CBRE data showed that Italy, MAPIC's Country of Honour, has moved to the top of the list of target countries as a retail expansion hotspot, ahead of Germany, Russia, Spain and France. CBRE noted that "although the prospect for consumer spending growth in Italy is modest, there is a clear opportunity for retailers to expand in this market that is under-represented in terms of international brands and where a considerable amount of new retail development is taking place."

CBRE's findings were backed up by BNP Paribas Real Estate's Q3 2011 property report for retail in Europe, released during MAPIC. "In Italy, retail assets are witnessing particularly strong interest from investors. Q3 2011 saw the highest investment volume recorded since early 2008. The strong demand was driven by a sale and leaseback of a Metro cash & carry portfolio, as well as particularly strong interest for street retail," the report said.

International diversification was at the heart of a standing-room-only keynote address given by Marks & Spencer's Director of International, Jan Heere. In what he described as a move to reduce the company's "dependence on the UK market," where M&S has over 700 stores, Jan Heere said that target territories include opening eight new stores in India over the next 12 months and five openings in China, with Shanghai of particular interest. In France, Marks & Spencer is making a return after a 10-year absence. Before the end of the year, its Champs Elysees store will open and Jan Heere chose MAPIC to reveal that four more shops are planned around Paris. He said that M&S, which is present in 42 territories, is seeking to grow sales by €584 million by 2013/2014.

In October, M&S launched its first international online store for the French market as part of its 'Clicks and Mortar' strategy to marry traditional stores with online commerce.

The development of online retailing was once again a subject of conversation throughout MAPIC with retailers now clearly embracing 'virtual' stores. According to CBRE survey results, 43% of retailers plan to "significantly increase their online product coverage," and some retailers "are setting up online platforms in new countries first to test the market before committing to a physical store."

Online retailing wasn't the only talking point at MAPIC. An increasing number of retailers are looking at how to best use new technology to enhance the customer experience. MAPIC 2011 showcased much of this new technology via its new MORE programme and MORE Pavilion. Delegates discovered virtual fitting rooms, virtual visits to stores using tactile tablets that allow consumers to 'walk' through the store, identify individual products and complete biometric secure purchases.

"MORE is a truly exciting development at MAPIC. The technology demonstrations and programme of expert-led conference sessions exist to give people a look into the possible future of retailing and provide a forum for exchange of views on retailing trends," said MAPIC Director Nathalie Depetro.

With MAPIC taking place at the same time as Reed MIDEM's MIPIM Asia property market for Asia Pacific, delegates had the opportunity to exchange views on the future of retail in Asia via a live video conference between Hong Kong and Cannes.

The message was clear – retailers are looking for significant growth in Asia, with China offering particularly interesting opportunities in the luxury goods sector. Carmine Rotondaro, Worldwide Real Estate Director of the PPR Group, which includes Yves Saint Laurent and Gucci in its portfolio, confirmed that PPR is targeting China with the priority ranging "from first and second tier cities in China and we will then look at third tier cities."

Retail sales growth in China hit 17.7% in September, according to data from Cushman & Wakefield and with consumer spending slowing in Europe, Asia is being seen as a potential driver for retail development. "The retail sector is the hottest investment sector in Asia at present," commented John Stinson, Head of Capital Markets for Asia Pacific at Cushman & Wakefield. "Increasingly, investors from within the region have been the most aggressive – 80% of (recent) foreign acquisitions occurring in China and Hong Kong were made by Hong Kong and Singapore buyers" he added.

Reflecting the growing internationalization of the retail real estate market at MAPIC, the event played host to the inaugural India Pavilion, a first-time exhibition presence from major Singaporean developer Capitamalls Asia Limited, Chinese shopping mall developer Outlet (China) Limited and Qatari developer Msheireb Properties.

And Dubai-headquartered multinational group Al-Futtaim, chose MAPIC to showcase the €1.2 billion Doha Festival City project in Qatar for the first time. The initial phase of Doha Festival City, which is Al-Futtaim's largest retail shopping project to date, is set to open in 2012, with work continuing on future phases through Q4 2014.

Summing up the mood in Cannes this week, MAPIC Director Nathalie Depetro said, "Retailers continue to prove that they are extremely inventive in their choice of where they open stores nationally and internationally, what they put in them and how they can reach customers by non-traditional, online means. And for investors, the returns on retail real estate remain among the most attractive in the property sector. MAPIC 2011 has reflected the dynamism of the industry and hopefully contributed to growing our clients' business."

To access a selection of photographs from MAPIC click here

For editors:
Founded in 1963, Reed MIDEM is a leading organiser of professional, international tradeshows. Reed MIDEM events have established themselves as key dates in professional diaries. The company hosts MIPTV, MIPDOC, MIPCOM, and MIPJUNIOR for the television and digital content industries, MIDEM for music professionals, MIPIM, MIPIM Asia and MAPIC for the property and retail real estate sectors.

Reed MIDEM is a division of Reed Exhibitions, the world's leading events organiser, with over 460 events in 36 countries covering 44 industry sectors. In 2010 Reed brought together over seven million active event participants from around the world generating billions of dollars in business. Today Reed events are held throughout the Americas, Europe, the Middle East and Asia Pacific, and organised by 34 fully staffed offices.

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