- Hines Research says retail pricing has recovered across open-air centers and enclosed malls in the U.S. and Europe, while lagging Asian markets could offer opportunity.
- About 480M SF of U.S. retail has been demolished since 2000 and development has been slow for over a decade, which Hines calls an underappreciated supply story.
- Hines frames the opportunity as an income and scarcity call, with returns driven by leasing and execution, and grocery anchors worth about 25% above-market rents in Atlanta.
Hines Research says the retail recovery is broadening and depends on scarcity and income growth, not just falling cap rates.
In a retail outlook by Michael Hudgins and Tori Kerr, Hines argues investors should take a second look at a sector that many dismissed.
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Supply Has Shrunk
Hines estimates that the U.S. has lost roughly 480 million SF of retail space since 2000. Developers have also built relatively little new space for more than a decade. Together, these trends create an underappreciated supply story in commercial real estate.
Meanwhile, owners have demolished or repurposed obsolete properties. E-commerce dominated industry headlines during this period. As a result, the remaining retail footprint is smaller and increasingly scarce, according to Hines.
Shoppers Spend, But Selectively
The National Retail Federation forecasts 4.4% growth in U.S. retail sales for 2026, reaching about $5.6 trillion, Hines reported. However, shoppers remain sensitive to prices.
Hines also cited findings from BCG showing that four in five Americans changed their shopping habits because of tariff-driven price increases. Across Europe, value now plays a central role in purchasing decisions.
Income trends add another layer. Hines said wages have mostly kept pace with prices. However, wealth gains remain concentrated among higher-income households. Consequently, retail locations near affluent consumers could prove more resilient.
Anchors Move Rents
Hines Research studied its Atlanta portfolio and found a clear advantage for well-chosen grocery anchors. Properties with these tenants achieved rents about 25% above market. Notably, the premium remained even after researchers adjusted for location.
According to Hines, grocery-anchored centers offer attractive income and growth potential. However, rising investment flows make careful selection more important. Investors must prioritize strong anchors and quality locations to avoid overpaying.
For investors, the findings reinforce the importance of underwriting rent growth and tenant strength over multiple expansion.
Why It Matters
Retail property prices have recovered across several formats, including enclosed malls. The U.S. and Europe have led this rebound.
Meanwhile, capital continues to target the sector. CRE Daily has covered deals such as the grocery-anchored JV between Phillips Edison and Northwestern.
Hines noted that parts of Asia have lagged behind. That weakness could create opportunities for investors seeking undervalued retail assets.
What’s Next
Hines’ outlook ultimately depends on property-level performance. Investors will need to focus on income growth, leasing and repositioning.
CRE Daily reported that retail sales rose 6% in August. Still, the key question is whether selective shoppers will continue favoring well-anchored centers.
