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.”

In addition to location, daily needs has emerged as one of the fundamental pillars of successful retail today. “Within these coastal areas, we focus on necessity-based grocery and drug-anchored centers, whose products and services attract local customers daily,” says Slaught. “With the coastal demographics and the necessity-based tenant mix, we believe we have a combination that will allow our centers to be successful for years to come.”

The firm is active in both retail investment as well as property management, leasing and development, and it has been an active player in the Southern California market for three decades. “Investec has maintained its success through strict investment analysis, its refined due diligence process and excellent relationships with the real estate community,” explains Slaught. “With over 3 million square feet of property under management and over $1.5 billion of transactions over the past 25 years, Investec has shown time and time again its ability to succeed in multiple markets and real estate cycles. Investec continues to seek out additional high-value, well-positioned retail assets in coastal California.”