{"id":1004704917,"date":"2024-03-06T03:49:12","date_gmt":"2024-03-06T11:49:12","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004704917"},"modified":"2024-04-08T03:56:30","modified_gmt":"2024-04-08T11:56:30","slug":"as-grocers-grow-faster-investor-interest-heats-up","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/","title":{"rendered":"As Grocers Grow Faster, Investor Interest Heats Up"},"content":{"rendered":"\n

The grocery retail scene as we enter 2024 is marked by an aggressive expansion on the parts of several large chains\u2014especially Aldi<\/strong>\u2014and by a strong likelihood that investor interest in the sector, particularly perhaps by institutional investors, will be revitalized, among other trends, according to JLL<\/strong>\u2019s new Grocery Report 2024<\/a>.<\/p>\n\n\n\n

\"2023\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
2023 fastest-growing grocers.
Chart courtesy of JLL Research, RetailStat<\/em><\/figcaption><\/figure>\n\n\n\n

This past year, JLL remarks, the nation\u2019s fastest-growing grocers opened 253 new stores totaling right around 8.4 million square feet of new space.<\/p>\n\n\n\n

Aldi has been the leader in that race, with 109 new stores totaling nearly 2.5 million square feet, followed by Publix<\/strong>, at 38 new stores totaling 1.9 million square feet. H-E-B<\/strong>, Kroger<\/strong> and Sprouts<\/strong> are well behind, at about 700,000 to 830,000 square feet each. Sprouts\u2019 total number of new stores was relatively high, at 30, because of a new model of smaller, more efficient stores.<\/p>\n\n\n\n

\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Fastest-growing grocers in 2022 & 2023.
Chart courtesy of JLL Research, RetailStat<\/em><\/figcaption><\/figure>\n\n\n\n

Mergers, both likely and perhaps not, are potentially a huge factor in grocery retail this year.<\/p>\n\n\n\n

It was back in October 2022 that Kroger announced plans to acquire Albertsons in a $24.6 billion deal<\/a>. That was followed by the September 2023 announcement by C&S Wholesale Grocers that it would acquire 413 stores<\/a>, eight distribution centers, two regional offices, and other assets as part of the Kroger-Albertsons merger. Last month, however, the Federal Trade Commission sued to block the merger, contending that it would eliminate competition and raise grocery prices.<\/p>\n\n\n\n

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READ ALSO<\/strong>: Is Retail 2024\u2019s Sleeper Hit?<\/a><\/p>\n\n\n\n

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Perhaps overlooked because of the Kroger-Albertsons coverage, in August 2023 Aldi announced plans to acquire 400 Winn-Dixie and Harveys Supermarket locations<\/a>, as part of a larger divestiture by Southeastern Grocers. Subject to FTC approval, this deal could close in the first half of this year.<\/p>\n\n\n\n

\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Grocery-anchored retail investment volume and average deal size, 2008-2023.
Chart courtesy of JLL Research, Real Capital Analytics<\/em><\/figcaption><\/figure>\n\n\n\n

On the investment front, JLL reports that grocery retail investment volume in 2023 saw a major decline (as did all core real estate property sectors) because of a difficult transaction environment. The drop was significant, especially in comparison with the boom years of 2021 and 2022, and brought investment volume to just $7.5 billion, or more than a 50 percent decrease from the previous year.<\/p>\n\n\n\n

\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Multi-tenant retail going-in cap rates by product type, 2019-2023.
JLL Research, Real Capital Analytics<\/em><\/figcaption><\/figure>\n\n\n\n

Going forward, however, JLL expects grocery retail\u2019s portion of total investment volume to rebound as the sector\u2019s durable returns and tenant stability continue to attract investors.<\/p>\n\n\n\n

Along with that, private capital is expected to remain the dominant player and institutional investors are forecast to become more active in the grocery retail market, driven by the sector\u2019s ability to provide stable income streams and a recession-resistant and lower-risk profile, according to JLL.<\/p>\n\n\n\n

\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Portion of grocery-anchored retail investment volume by buyer type, 2015-2023.
JLL Research, Real Capital Analytics<\/em><\/figcaption><\/figure>\n\n\n\n

Grocers as landlords<\/h2>\n\n\n\n

Finally, we come to a nascent trend of grocers themselves acquiring retail centers, as part of their omni-channel retail strategy and a goal of diversifying revenue streams.<\/p>\n\n\n\n

JLL cites the example of Publix\u2019s January purchase for $26.5 million of a new shopping center that the chain anchors. This type of deal allows Publix and other acquisitive grocers to extend their control over real estate assets to optimize tenant mixes and create synergies between their grocery operations and other businesses within these centers. According to JLL, grocers are expected to close a greater number of acquisitions as part of their expansion and diversification strategies.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Private capital will remain the dominant player, but JLL expects institutional buyers to become more active in this ever-expanding market.<\/p>\n","protected":false},"author":882,"featured_media":1004705215,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,23891,21742,21749,51037],"tags":[32796],"class_list":["post-1004704917","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-national","category-latest","category-retail","category-trends","tag-jll"],"acf":[],"yoast_head":"\nAs Grocers Grow Faster, Investor Interest Heats Up - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"The grocery retail scene as we enter 2024 is marked by an aggressive expansion on the parts of large chains\u2014especially Aldi, JLL reports.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"As Grocers Grow Faster, Investor Interest Heats Up\" \/>\n<meta property=\"og:description\" content=\"The grocery retail scene as we enter 2024 is marked by an aggressive expansion on the parts of large chains\u2014especially Aldi, JLL reports.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-03-06T11:49:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-08T11:56:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/Buyer-type.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"799\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/\",\"name\":\"As Grocers Grow Faster, Investor Interest Heats Up - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/Buyer-type.jpg\",\"datePublished\":\"2024-03-06T11:49:12+00:00\",\"dateModified\":\"2024-04-08T11:56:30+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555\"},\"description\":\"The grocery retail scene as we enter 2024 is marked by an aggressive expansion on the parts of large chains\u2014especially Aldi, JLL reports.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/as-grocers-grow-faster-investor-interest-heats-up\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/Buyer-type.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/Buyer-type.jpg\",\"width\":799,\"height\":620,\"caption\":\"Portion of grocery-anchored retail investment volume by buyer type, 2015 \u2013 2023. 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