Large Format Retail / Bulky Goods

Large Format Retail – Linking the Housing Market to LFR
March 2018

The Large Format Retail (LFR) sector has come under an increasing level of scrutiny, as regulatory measures, designed to address medium term risks associated with the domestic housing market are implemented. Colliers analysis demonstrates that a relationship between the housing market and LFR sector exists, specifically, an inverse relationship between mortgage rate movement and LFR rental growth. However, while the establishment of such a relationship paints a subdued outlook for the LFR sector on face value, Colliers’ analysis also demonstrates that the upward movement in mortgage rates required to meaningfully reduce LFR rents is material, and unlikely in the medium term. In this regard, the outlook for the LFR sector in terms of rental growth is far less bearish than some recent media headlines suggest.

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