kenneth sinclair gunn · conclusions • 2014 was another good year for european outlet centres....
TRANSCRIPT
ICSC European Outlet Conference
European Outlets: Life Begins at 40
Kenneth Sinclair GunnFSP Retail Business Consultants
Contents
European Outlet Centres Today• Current position• Recent Expansion• Planned 2015 & 2016 developments• Development Cycle and Current Capacity
European Occupiers Today• Top 25 Occupiers• Expanding Occupiers• Evolving Markets
Delivering Top Returns• Top Investors• Top Operators• Finding Opportunities
Conclusions
Current Position
• 201 outlet centres1 >3k m2
• Total GLA 3.2million m2
• 2014 Turnover of €11.7bn
• 191 are over 5,000m²
• 161 are over 10,000m²
• 63 are over 20,000m²
• Excluding Russia, 72% of the European population lives within 90 minutes’ drive of an outlet centre
http://www.fspretail.com/en/demo/interactive-outlet-centre-map
1 Turkey is considered to be separate from the core European market, and is not included in this review Source: FSP
Outlet Centre Openings in 2014
Source: FSP
Country Location Name Format Location FormatGLA
(sqm)
Italy Brugnato Shopinn Brugnato Outlet Village Edge of Suburbs Medium - Upscale 22,000
Denmark Copenhagen Copenhagen DO Outlet Mall Suburban Location Medium - Midscale 17,500
Poland Lublin City Outlet Lublin Outlet Mall Edge of Suburbs Medium - Midscale 12,500
Germany Bad Munstereifel Eifel City Outlet Outlet Village Town Centre Medium - Midscale 12,000
United Kingdom London - Hackney Hackney Fashion Hub High Street Edge of Town Centre Small - Upscale 7,000
Netherlands Amsterdam UFO Akerpoort Department Store Suburban Location Minor - Midscale 5,000
Planned Openings in 2015 & 2016
Source: FSP
Country Location Name Year GLA (sqm)Poland Bialystok City Outlet Bialystok 2015 13,000Denmark Billund Billund Quality Outlets 2015 20,000Germany Brehna Fashion Outlet Leipzig 2015 11,500Germany Koblenz Montabaur Fashion Outlet 2015 14,500France La Cavalerie Viaduc Village 2015 5,988France Paris (Aubergenville) Marques Avenue A13 2015 12,900Czech Republic Prague The Prague Outlet 2015 12,000United Kingdom Solihull Resorts World at the NEC 2015 14,362Russia St Petersburg Outlet Village Pulkovo 2015 13,024Italy Torino Torino Outlet Village 2015 19,500Spain Barcelona (Viladecans) Viladecans The Style Outlets 2016 19,800Italy Bergamo San Pellegrino Outlet Village 2016 13,000France Miramas McArthurGlen Provence 2016 16,000Russia St Petersburg Fashion House St Petersburg 2016 13,000Estonia Tallinn Gate Tallinn Outlet 2016 12,500Finland Vaalimaa Zsar Outlet Village 2016 12,000Russia Yekaterinburg Fashion House Yekaterinburg 2016 18,000Czech Republic Zdice Bohemia Outlet Village 2016 16,000
Outlet Industry Expansion
Source: FSP
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Floo
rspa
ce A
dded
(m²)
Central Europe Northern Europe Southern Europe Western Europe
Capacity for New Outlet Development
Source: FSP
ICSC European Outlet Conference
The Occupier Market
Top 25 Occupiers
Source: FSP
Retailer Country of Origin Merchandise Category FISH Price Position # Outlet Stores CE. Europe Northern
EuropeSouthern Europe
Western Europe
Nike USA Leisure YI Upper Middle 130 20 29 43 28Levi Strauss & Co USA Clothing and footwear AS Middle 123 16 18 37 41Adidas Germany Leisure AS Middle 83 21 14 21 18Puma Germany Leisure AS Middle 82 20 3 28 24Tommy Hilfiger USA Clothing and footwear AI Upper Middle 77 16 13 22 20Desigual Spain Clothing and footwear YI Upper Middle 68 4 1 32 31Home & Cook France Household FS Middle 66 12 9 21 24Guess USA Clothing and footwear AF Upper Middle 62 11 4 26 21Tom Tailor Germany Clothing and footwear FS Upper Middle 62 19 1 4 38Calvin Klein USA Clothing and footwear Upper Middle 61 3 8 31 19Lacoste France Clothing and footwear FS Upper Middle 61 8 12 18 23Lindt Switzerland Catering 0 Upper Middle 57 4 8 25 20United Colors of Benetton Italy Clothing and footwear AS Middle 57 12 1 25 12Asics Japan Leisure AI Middle 56 8 11 19 18Samsonite USA Personal AS Upper Middle 55 9 10 17 17Clarks United Kingdom Clothing and footwear FS Middle 51 1 29 7 13Gant USA Clothing and footwear AI Upper Middle 50 9 6 12 22Timberland USA Clothing and footwear AI Upper Middle 50 6 10 20 12Geox Italy Clothing and footwear FS Upper Middle 48 8 1 22 17Mango Spain Clothing and footwear AI Middle 48 11 1 20 10Hugo Boss Germany Clothing and footwear AI Premium 47 2 10 15 20Le Creuset France Household AI Upper Middle 47 3 17 4 23Calvin Klein Underwear USA Clothing and footwear AF Upper Middle 45 2 11 15 17Quiksilver USA Clothing and footwear YI Middle 44 10 1 12 19Triumph Germany Clothing and footwear FS Middle 44 14 5 6 18
Top 25 Expanding Occupiers
Source: FSP
Retailer Country of Origin Merchandise Category FISH Price Position # Outlet Stores # New Outlet Stores CE. Europe Northern Europe Southern Europe Western Europe
Asics Japan Leisure AI Middle Global Brand 19 6 2 8 3
Home & Cook France Household FS Middle Global Brand 16 5 2 4 5
Guess USA Clothing and footwear AF Upper Middle Global Brand 15 7 1 5 2
Levi Strauss & Co USA Clothing and footwear AS Middle Global Brand 15 3 0 5 7
The Body Shop United Kingdom Personal FS Middle Super Regional 14 0 5 3 6
Tommy Hilfiger USA Clothing and footwear AI Upper Middle Global Brand 14 4 2 8 0
Fragrance shop, The United Kingdom Personal FS Middle Local 11 0 11 0 0
The North Face USA Leisure FS Upper Middle Global Brand 11 0 4 2 5
Quiksilver USA Clothing and footwear YI Middle Global Brand 11 2 0 4 5
United Colors of Benetton Italy Clothing and footwear AS Middle Global Brand 11 1 1 4 5
Desigual Spain Clothing and footwear YI Upper Middle Super Regional 10 0 1 3 6
Pepe Jeans United Kingdom Clothing and footwear YI Upper Middle Super Regional 10 3 0 3 4
Puma Germany Leisure AS Middle Global Brand 10 2 0 4 4
Superdry United Kingdom Clothing and footwear YF Middle Global Brand 10 0 2 1 7
Vans USA Clothing and footwear YI Upper Middle Global Brand 10 1 2 5 2
Villeroy & Boch Germany Household CI Upper Middle Global Brand 10 0 1 5 4
Watch Station USA Personal AS Middle Regional 10 0 5 1 4
Ecco Denmark Clothing and footwear AS Middle Global Brand 9 4 2 0 3
Michael Kors USA Clothing and footwear AF Premium Global Brand 9 1 1 2 5
Expanding Occupiers in Key Markets
Source: FSP
Rank France Germany Italy Poland Russia Spain United Kingdom
1 The Body Shop (+5) Michael Kors (+4) Liu Jo Man (+8) Bestseller (+6) Albione (+3) Charanga (+4) The Fragrance Shop (+11)
2 Levi Strauss & Co (+4) Superdry (+4) Tommy Hilfiger (+7) Asics (+5) Paper Shop, The (+3) Skechers (+3) The Gift Company (+8)
3 L'Oreal (+4) Wellensteyn (+4) VB Store (+7) Italian Fashion (+5) Charuel (+2) Asics (+3) Ernest Jones (+7)
4 Home & Cook (+4) Coach (+3) Flavio Castellani (+6) Mountain Warehouse (+5) Cream della Cream (+2) Forecast (+3) Grape Tree (+6)
5 Le Coq Sportif (+4) Campus (+3) Kennet Street (+6) Symbiosis (+5) Econika (+2) United Colors of Benetton (+3) Watch Station (+5)
6 Little Marcel (+4) Kneipp (+3) Asics (+5) Home & Cook (+4) Elena Shipilova (+2) The Body Shop (+2) Beauty Outlet (+5)
7 Jeff De Bruges (+4) Lambert (+3) Vans (+5) Bialcon (+4) Just Couture (+2) Home & Cook (+2) Musto (+5)
8 Karl Marc John (+4) Sanetta (+3) Bottega del Sarto (+5) Prochnik (+4) Kanz (+2) Rockport (+2) Suit Direct (+5)
9 United Colors of Benetton (+3) Sterntaler (+3) Puma (+4) So! Coffee (+4) Marc Cain (+2) Zwilling (+2) Skechers (+4)
10 Puma (+3) Levi Strauss & Co (+2) Alberta Ferreti (+4) Reserved (+3) Milana (+2) Adolfo Dominguez (+2) The Body Shop (+4)
Evolving Fashion Markets
Source: FSP
50 100 150 200
Young
Assured
Family
Classic
FISH Lifestage Index
C.E. Europe Northern Europe Southern Europe Western Europe
(100 = Existing Regional Provision) 50 70 90 110 130 150
Luxury / Premium
Upper Middle
Middle
Price Position Index
C.E. Europe Northern Europe Southern Europe Western Europe
(100 = Existing Regional Provision)(100 = Existing Regional Provision)
ICSC European Outlet Conference
Delivering Top Returns
European Outlet Centres - Investors
Source: FSP
Henderson: 17%
Value Retail & Ptnrs: 14%
IRUS: 7%
McArthurGlen & Ptnrs: 4%
VIA Outlets: 3%
Blackstone: 3%
Hermes: 3%
Resolution: 3%
AEW: 3%
Unibail Rodamco: 2%
Neinver-TH: 1%
Others: 40%
Henderson: 9%IRUS: 7%
Value Retail & Ptnrs: 5%
VIA Outlets: 5%
Blackstone: 4%
McArthurGlen & Ptnrs: 3%
Hermes: 3%
Resolution: 3%Unibail
Rodamco: 3%AEW: 3%
Neinver-TH: 2%
Others: 54%
Share of Total Turnover Share of Floor Area
European Outlet Centres - Operators
Source: FSP
McArthurGlen: 14%
Neinver: 9%
Value Retail: 5%
Realm: 5%
Marques Avenue: 4%
Freeport: 3%
Promos: 3%
Fashion House: 3%
Fashion District: 2%
Advantail: 2%
Others: 48%
Share of Total Turnover Share of Floor Area
McArthurGlen: 23%Value Retail: 15%
Neinver: 9%
Realm: 4%
Marques Avenue: 4%
Promos: 3%Freeport: 2%
Fashion House: 2%Fashion District:
1%Advantail: 1%
Others: 37%
Finding Opportunities - Investors
Source: FSP
€0
€100
€200
€300
€400
€500
€600
- 10,000 20,000 30,000 40,000 50,000
Estim
ated
Tur
nove
r (20
14)
Mill
ions
Gross Lettable Area (Sqm)
Leading Investors Other InvestorsTrend (Other Investors) Linear (Trend (Other Investors))
Finding Opportunities - Operators
Source: FSP
€0
€100
€200
€300
€400
€500
€600
- 10,000 20,000 30,000 40,000 50,000
Estim
ated
Tur
nove
r (20
14)
Mill
ions
Gross Lettable Area (Sqm)
Other Operators Leading Operators Trend (Other Investors)
Small number of high risk opportunities
Source: FSP
€0€10€20€30€40€50€60€70€80€90
€100
- 10,000 20,000 30,000 40,000 50,000
Estim
ated
Tur
nove
r (20
14)
Mill
ions
Gross Lettable Area (Sqm)
Delivering Top Returns
• Despite strong investor interest, there is a lack of available product
• This is fuelling growth in asset values and increasing expectations of future sales performance
• Some investors now alternatively looking at funding new development
• This is fraught with challenges, given shrinking gaps in coverage, competitive challenges and the small number of operators
• FSP believes that the best performing outlet centres in the next 24 months will be those which deliver a strongly differentiated ‘great day out’ visitor package
• The top operators achieve this through exceptional design, strong brand mix, inspired marketing, proactive leasing, appropriate and timely expansions and effective operational activity, which focuses on the complete customer experience
• There is a wide range of performance across the outlet industry, with the most experienced investors dominating the top performing sites
• It has never been more important for less experienced investors and developers to access high quality pre acquisition and feasibility support and strong management teams in order to deliver top returns
ICSC European Outlet Conference
Conclusions
Conclusions
• 2014 was another good year for European Outlet Centres. While there were fewer new developments, the occupier market saw substantial growth
• There are now over 200 trading outlet centres in Europe with a variety of formats, price positions and locations
• Development activity is focused in Germany and Central and Eastern Europe. There are opportunities to infill under developed regions including the UK (Midlands/SE), France (Lyons, Provence) and Spain (Catalonia)
• The top investors have grabbed the best performing sites, leaving relatively few Grade A opportunities for new investors or portfolio expansions. Opportunities for successful added value management are challenging
• Alternatively, there is scope for development of 50 to 75 new outlet centres across Europe. However, these are increasingly marginal opportunities and expansion at established outlet centres will reduce this potential
• It is no longer acceptable to manage or develop outlet centres ‘by numbers’. Competition is more effective and investors expect stronger performance delivered over shorter time scales
• An insight based, integrated approach is essential to underpin successful development, operational management and increasingly leasing activity
• 40 is supposed to be the age when we can relax and begin to enjoy the fruits of our labour. With good sites at a premium, changing consumer demand and growing competition, it looks as if we will all be working hard to ensure that the sector continues to deliver Top Returns