AI IMPACT: RETAIL
Retail total returns, YoY
• The inflation-driven increase in long-term yields in 2026 and 2027 pushes cap rates modestly higher through 2028, but they remain below 6%. • In the bust scenario, capital growth declines by ~5% as a temporary shift away from discretionary spending pulls down NOI and the demand shock is deflationary, reducing the overall value of retail spending. • Non-discretionary spending offers stability in the displacement scenario, while an increase in discretionary spending in the upside scenario helps to offset a higher share of online spend.
2025 2026F 2027F 2028F 2029F 2030F
S1: Upside - Expansion
11.8% 10.5% 5.8% 7.8% 15.9% 9.5%
S2: Baseline
11.8% 10.0% 5.0% 6.1% 14.3% 8.9%
S3: Downside - AI Bust
11.8% 9.3% 0.7% 7.3% 10.3% 6.6%
S4: Downside - Displacement
11.8% 9.4% 3.6% 3.7% 12.3% 7.3%
Source: Cushman & Wakefield Research
Cushman & Wakefield
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