The Azucena Take: Strong Sales and the Retail Property Market

Retail sales were strong in October 2021, despite the hit to supply lines and the ongoing inflation. These issues have not stopped consumers from going out to shop and thus helping to fuel the economic recovery. To understand what is going on, one has to look at the numbers and break down the data.

Core Retail Sales (which omits auto and gas sales) was up by 14.9% compared to last year and up by 20% when compared to 2019. When factoring in inflation, it's up by 10.8% compared to 2020 and 15.7% when compared to 2019. Regardless of how you look at it, the numbers demonstrate economic growth.

When looking at the source of the sales, the majority of them were through eCommerce. Online sales were up by 10% compared to 2020 and up by 40% compared to 2019. This has resulted in a boom for industrial property. As a result; vacancy rates were at 4.4% while rent has jumped by 10.3%.

However, brick-and-mortar stores still had a strong year with their sales being up by 13.8% when compared to 2019. Traditional stores are also seeing foot traffic return to pre-pandemic levels in 2021. Regarding the state of the retail property market as of October 2021:
- Vacancy rates are at 6.3%
- Rent for retail space is up by 3.1%

For owners of retail property, these numbers demonstrate that the economy is recovering. Those who held on to their property and worked to keep their tenants are seeing a massive return on their investments. Meanwhile, those who had invested in industrial property are also seeing the rewards of this boom.

Overall, smart investors have better positioned themselves to reap the rewards of the recovery while also preparing for the emerging economy of 2022. If you missed out now, planning for next year is a better course of action.