Jan 2025
Retailers are seeking longer lease terms
According to CBRE research published in November 2024, retailers are seeking longer lease terms. Compared to 2023, the average retail lease in 2024 was six months longer than before, averaging 96 months.
Why are retailers opting for longer leases?
By signing longer leases, retailers are hoping to limit rent increases. Given that construction of retail spaces is limited and vacancy is steady, according to a Q3 report by Colliers, rent is unlikely to drop any time soon.
Where are retailers seeking longer leases?
Proximity to consumers is also driving retailers to lock down properties for longer periods. For example, according to CBRE’s research, retailers are seeking longer lease terms in areas like strip malls, especially those spaces adjacent to grocery stores.
Consumers are shifting to more budget-conscious behaviors and spending more on necessities like groceries. By occupying spaces near or anchored by grocery stores, retailers are likely to benefit from additional foot traffic.
