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Amazon and Asos 'will be on the high street by 2020'

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Amazon and Asos will be on the high street by 2020, a leading commercial property industry figure has predicted. Such a move could be key to reviving the property sector, he said.

Guy Grainger, head of retail at commercial property agent Jones Lang Lasalle , predicted that both the pureplays would have high street premises within eight years. Speaking at the Investment Property Forum (IPF) he said such a strategy could have important implications for the high street.

“The UK consumer has totally adapted to online retailing and we have more online sales than France and Germany added together,” he said.

“But online is not the Holy Grail and the property sector is not going to be killed by online - quite the opposite.  A property strategy linked directly to online strategy is the key ingredient.

“Purely online retailers will have more impact with a multichannel strategy and I certainly believe that it won't be long before ASOS and Amazon have a physical presence.

“The future could be mixed for fashion retailers though. The nation is getting older and by 2020 there will be 15 percent fewer 18-25 year olds, so the very congested fashion sector, which has been driving rents for some time, won’t have as many customers.”

The comments came as industry benchmark IPD unveiled its property report for the first quarter of 2012. It said shopping centres had lost 38.4% of their capital value since 2007. In town shopping centres were now worth 41% less than they were in 2007, with rents down by 13%. Around 71% of these centres are more than 20 years old and, says IPD, “increasingly obsolete.” The UK retail sector has seen capital values fall by 31% since June 2007 and rental values fall by 8.3%, according to the report.

Greg Mansell, senior researcher at IPD, said: “The retail sector has been the worst performing property sector in the UK over the last year, but these figures are a warning sign to investors not to abandon the retail sector. It is still the largest sector in the UK property market, and investors need to take more notice of their allocations and liabilities, and how these interact with the changing nature of the market. A retail renaissance is needed, not an exodus.”

 
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