The barter economy features very early on in the annals of human history – the exchange of goods and services has shaped human society throughout the ages and that trend is no different today. The modern retail property owner spends much of their time looking at what makes a great retail environment work, and yet we find that little attention has been given to the factors that drive the rents in those properties. With our big data approach, back-tested with data published by public real estate companies, and with the help of several listed companies and non-listed funds, we have decided to add to the existing knowledge and perform our own investigation on the factors that influence retail footfall and rents.
To do that, we analysed 1,115 shopping centres and street retail units owned by 16 listed real estate companies and 5 non-listed funds specialized in retail property management. All of the assets are based in Europe (both in the UK and on the Continent). Our study aimed to use a bottom-up approach to identify which factors have a statistically significant ability to explain rent levels and growth. As we believe that the ability of a shopping centre to draw customers is one of the foremost determinants on rentals, we looked both at the local demographic data, and centre specific data. By the end of the our research assignment, an incredible amount of information has been processed and stored in our framework, and we then analysed it in the following order.