OVERVIEW OF THE OUTLET INVESTMENT MARKET.…OVERVIEW OF THE OUTLET INVESTMENT MARKET. ... Clarks...

OVERVIEW OF THE OUTLET INVESTMENT MARKETJuly 2017

Prepared for Investors of

Everyone can drive a car...

Hammerson | Cushman & Wakefield 2

W H Y O U T L E T S ?Yields Converging

Source: Cushman and Wakefield Outlet Valuation Team

4.00%

4.50%

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

Jun-

06Se

p-06

Dec-

06M

ar-0

7Ju

n-07

Sep-

07De

c-07

Mar

-08

Jun-

08Se

p-08

Dec-

08M

ar-0

9Ju

n-09

Sep-

09De

c-09

Mar

-10

Jun-

10Se

p-10

Dec-

10M

ar-1

1Ju

n-11

Sep-

11De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-

12M

ar-1

3Ju

n-13

Sep-

13De

c-13

Mar

-14

Jun-

14Se

p-14

Dec-

14M

ar-1

5Ju

n-15

Sep-

15De

c-15

Mar

-16

Jun-

16Se

p-16

Dec-

16M

ar-1

7

Prime Shopping Centre Yields vs. Prime Outlet Yields

Outlets Top European Cities Shoppping Centres


T H E O U T L E T M A R K E TSmall but still growing – Majority of Outlet floor space comprises secondary/tertiary centres

Total Shopping Centre floor space in Europe is

159.4 million sqm

Total Outlet floor space in Europe is

3 million sqm


L E A S E S T R U C T U R EHow are Outlets different?

BASE RENTAnnual reviews based on Inflation + Previous Rent

TURNOVER RENT

POTENTIAL GROWTHThe objective is to keep topping up!


S M A L L M A R K E T B U T B I G R E T U R N SDecember 2015 – December 2016

9.8%Rental Growth

Outlet MallsShopping Centres

1.8%Sales Growth (All Retail)

11.1%Sales Growth

5.82%Capital Value Growth

11%Capital Value Growth

6.5%Sales Density Growth

1.1%Rental Growth



H U G E D E M A N D V E RY L I T T L E S U P P LYCapital Markets Statistics

Cushman & Wakefield advised on

overof all outlet transactions in Europe in 2016 and value around 50 schemes a year.

50%€ M

€200 M

€400 M

€600 M

€800 M

€1,000 M

€1,200 M

€1,400 M

€1,600 M

€1,800 M

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Year

European Outlet Transactions 2008 - 2017

Total Transaction Volume C & W Transaction Volume


P R O P E R T Y O R B U S I N E S S ?Density Spectrum – Assessing the Buyer Pool at Various Levels of Performance

€5,000 psm

€10,000 psm

€15,000 psm

€20,000 psm

SUPER PRIME• Sovereign wealth• Large REITS

PRIME• Specialised Outlet Funds• Institutional Investors

GOOD SECONDARY• Retail Funds• Institutional Investors• Specialised Outlet Funds• Core-plus Funds• Property Companies

SECONDARY/TERTIARY• Specialised Outlet Funds• Opportunistic Funds• Private Investors • Property Companies

Property Backed Business

Property Assets


Majority of European Outlets fit into these categories


M A I N E U R O P E A N O U T L E T O P E R ATO R SConsolidation

10

9

6

5

Num

ber o

f Eur

opea

n C

entr

es (e

xcl.

Dev

elop

men

t)

23

4

13

5

2

7

Still more than 100 outlets not managed by the “Core Group”

5


W H Y I S S P E C I A L I S T K N O W L E D G E N E E D E D ?Marketing Budgets – European Benchmark – A driven asset

€ 0

€ 1,000,000

€ 2,000,000

€ 3,000,000

€ 4,000,000

€ 5,000,000

€ 6,000,000

Super Prime Prime GoodSecondary

Secondary Tertiary

€pe

r ann

um

Average Marketing Budgets by Tier

€ 0

€ 500,000

€ 1,000,000

€ 1,500,000

€ 2,000,000

€ 2,500,000

€ 3,000,000

€ 3,500,000

€ 4,000,000

Tourism driven Local catchment driven

€pe

r ann

um

Marketing Budgets


C O R E I N V E S TO R SCore Group of Experience


E X PA N S I O N S B U T V E RY D I F F I C U LT TO G E T P L A N N I N G C O N S E N TDevelopments – In the last 4 months extensions have added more than a whole new scheme across Europe

Designer Outlet Provence

Designer Outlet Roermond – Phase 4

Batavia Stad Fashion Outlet – Phase 4 & 5

Sambil Outlet Madrid

Torino Fashion Mall

Viladecans The Style Outlets

Designer Outlet ParndorfBicester Village – Phase 4

Honfleur Normandy Outlet

Opening Soon

Recently Opened

Noventa Di Piave Designer Outlet


T H E “ P L AT F O R M ” I S K E YRecent Transactions – Large Portfolios openly transacted would command a premium

Fashion House Gdansk

Fashion HouseWarsaw

Fashion House Sosnowiec

Junction One, Antrim

The Outlet, Banbridge

McArthurGlen Ochtrup

Designer Outlet Wolfsburg

McArthurGlen Troyes

McArthurGlen Roubaix

Festival Park, Mallorca

Clarks Village, Street

Junction 32, Castleford

Braintree Freeport

Mill Green Designer Outlet, Cannock

Zweibrücken The Style Outlets

Sevilla The Style Outlet

Factory Wroclaw

Rosada Fashion Outlet

Las Rozas The Style OutletsS.S. de los Reyes The Style Outlets

Getafe The Style Outlets

Vicolungo The Style Outlets

Castel Guelfo The Style Outlets

Factory Poznan

Vila do Conde Porto Fashion Outlet

IRUS Fund Split

General

Hermes

Peakside

Ares

Tristan


V E RY L I M I T E D S U P P LYOutlets currently on the Market

Festival Park, Ebbw Vale, Wales

Designer Outlet Luxembourg

Outlet Centre Lublin

Outlet Centre Bialystok

Livingston Designer Outlet, Scotland

Norwegian Outlet


A P P E N D I XRecent Transactions

Q2 2017 Poland – Fashion House;

Gdansk, Warsaw, and Sosnowiec

PRICE: Confidential

VENDOR: Peakside

PURCHASER: Deutsche AM

Q2 2017UK – Junction 32,

Braintree Freeport, and Clarks Village

PRICE: £332.5m*

VENDOR: Hermes

PURCHASER: Land Securities

Q4 2016Zweibrucken, Villa Do

Conde, Sevilla and Wroclaw

PRICE: €587m*

VENDOR: IRUS Fund

PURCHASER: VIA Outlets

Q4 2016Getafe, Las Rozas,

Vicolungo, Castel GuelfoSSR and Poznan

PRICE: €702m*

VENDOR: IRUS Fund

PURCHASER: Neptune Fund

* Reported Prices

Not all cars are the same…..

Questions?

CONTACT DETAILS

Richard ChingPartner

Head of Outlet Mall Valuations EMEA

Direct: +44 (0) 20 7152 5870 Mobile: +44 (0) 7793 808870

[email protected]

OVERVIEW OF THE OUTLET INVESTMENT MARKET.…OVERVIEW OF THE OUTLET INVESTMENT MARKET. ... Clarks...

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