Why Investec Is So Bullish on SoCal Retail

Retail has rebounded this year. Despite the growth of ecommerce, retail investors have realized success in the market, largely by focusing on quality locations and community needs. For retail investor Investec, coastal Southern California is that quality market with strong community demographics. With a recent shopping center purchase in Oxnard, the firm continues to be bullish on the Southern California retail market.

“Coastal California and, more specifically, 10 miles from the coast, has always been our target area because of the demographics that live within these areas and the high barriers to entry for new development,” Kenneth Slaught, president of Investec, tells GlobeSt.com. “We see higher household incomes, store rental rates and sales throughout our portfolio when compared to non-coastal properties.”

In addition to strong household demographics and high barriers to entry, there is also little new retail development, especially for shopping centers. The limited construction pipeline is also one of the characteristics Investec likes about the market. “The cost of new development in coastal areas is significantly higher, making competition from newer centers much rarer, as well as protecting the value of those retail assets,” explains Slaught. “We believe that people will continue to choose to live in these coastal areas, maintaining the strong historical demographics we see today.”