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Property market

-16

12-month change in total vacancy (bps)

0.7%

​​12-month net absorption (% of inventory)

0.7%

12-month completions (% of inventory)

5.5%

12-month rent growth (p.s.f.)

Investment market

$51.5

Investment sales (2017, billions of $US)

-22.5%

2017 investment sale growth (%)

4.3%

Average cap rate (%)

flat

12-month change in cap rate (bp)

  • Demand: New development is very calculated; focus is on investing in and densifying existing space.
  • Transactions: Transaction volumes decreased by 22.5 percent in 2017. Much of 2017 was comprised of necessity-based, one-off transactions.
  • Markets: With primary markets stagnating, the searchfor pockets of out-performance intensifies.
  • Sources of capital: The year 2017 brought with it challenges for the retail sector, and in reaction to these shifts, institutional investors invested 41.8 percent less.
  • Sources of risk: Despite heightened risk with regard to fundamentals, large portfolio acquisitions are in the pipeline for 2018.

U.S. Retail cap rate map

While trophy retail assets see continued cap rate compression, urban, mall and general-purpose center properties generally seeing softening.


Methodology: Cap rates pertain to JLL’s expected average ranges for Prime Urban assets being priced as of Q1 2018.



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Questions? Contact us.

Naveen Jaggi

President, America | Retail Advisory Services | Leasing and Capital Markets | International Director

United States

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Arielle Einhorn

Senior Research Analyst

United States

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