Tokyo is the world’s hottest market for retail expansion, according to CBRE Group.
The city, where cutting edge fashion mingles with young women clad in Hello Kitty regalia and anime adherents, attracted 63 new brands last year. “How Global is the Business of Retail?” a CBRE study, found strong leasing momentum in Tokyo’s core despite mixed signals in the economy and an 8 percent sales tax increase in April 2014.
Toronto was the hottest market in the Americas with 25 new international brands setting up shop there last year. The report tracks the target markets of new brands in 164 cities in 50 countries.
American retailers are the most intrepid when it comes to entering new global markets. U.S. retailers last year accounted for 26 percent of cross-border expansion, traveling to Asia, 41 percent; Europe, 33 percent, and the Middle East and Africa, 12 percent.
The second most active group were Italian retailers, accounting for 14 percent of cross-border expansion, followed by U.K.-based retailers, 11 percent, and French chains, 10 percent. Globally, Europe represented about 42 percent of the expansion, followed by Asia with 39 percent and the Middle East and Africa, 10 percent. North America was a target for only 3 percent of retailers.
Mid-range fashion was one of the most active retail sectors globally, accounting for 21 percent of the expansion, closely followed by luxury brands with 20 percent. Specialty retailers accounted for 16 percent and coffee shops continued to proliferate with 16 percent. In the Americas, luxury fashion led with 26 percent, followed by mid-range fashion, 20 percent, and specialty clothing, 14 percent.
Brandon Famous, senior managing director, retail occupier advisory and transaction services at CBRE, cited globalization, technology and demographic changes as having “a dramatic impact on the business of retail. Demographic shifts in many countries have resulted in changes in both spending power and shopping habits. Technology enables retailers to enter markets and evaluate performance more swiftly.”
In addition, consumers are traveling more, which is exposing them to more brands and creating “pent-up demand for the chance to purchase locally and creating a ready-made market before entry,” Famous said.