For decades, grocery-anchored neighborhood shopping centers have been some of the strongest and dependable kinds of retail real estate investments. They still are, experts say, but the industry is watching online grocery shopping, even though most people still prefer to buy perishables in stores.
Adam Howells, managing director in JLL’s Dallas office, said the company recently examined the risk that investors see when looking at retail real estate.
Despite grocery’s stable reputation, the volume of grocery-anchored shopping center transactions nationwide fell by 31 percent in the first half of this year, according to a JLL report released this month.
“Dallas-Fort Worth is such a vibrant, growing market and one of the most vibrant in the country,” Howells said. “So we’re always going to keep seeing grocery expansion.”
He called out Central Market and H-E-B, WinCo Foods and German grocer Lidl, which opened its first U.S. stores on the East Coast this year and has purchased parcels in North Texas, among those that will continue to build stores in North Texas.
But even before the Amazon.com purchase of Austin-based Whole Foods, the grocery business has been changing right before our eyes similar to all of retailing, Howells said.
Landlords of neighborhood centers are looking at prospective tenants differently.
“No one wanted the pizza parlor or the gyms,” Howells said. “Now things have changed, and those are good tenants for driving traffic to the center, including moms.”