Katharina von Schacky, recently appointed head of retail real estate markets at German fund manager Commerz Real, learned early on in her career that the retail business is all about the customer. She talks to PropertyEU about the priorities in her new role and the outlook for the European shopping centre market.

katharina von schacky

Katharina Von Schacky

What was the deciding factor behind your move to Commerz Real from Unibail-Rodamco?
'There were really two aspects behind my decision to move to Commerz Real from a position at Unibail that I greatly enjoyed. First, I wanted to work with a retail portfolio that formed part of a legendary fund, hausInvest, (a continuously positive return since 1972). Second, I was excited about the variety of the shopping centres within the portfolio, both in terms of the individual locations across the globe and the varying stages the centres are at within an asset’s life cycle.'

Can you name some of your achievements at Unibail-Rodamco?
'I was at Unibail for 1.5 years. It was an incredibly intense experience as I fully immersed myself into the Unibail way of thinking. Although based at the German head office in Düsseldorf, I had frequent contact with the head office in Paris. In order to be able to sell the Unibail know-how and services to mfi clients in Germany [Unibail-Rodamco acquired a controlling stake in Germany shopping centre owner mfi in 2012, ed.], I was given access to many current and future projects across Europe. When I left Unibail, mfi was established as a unique and innovative, yet reliable service provider in Germany. It is only a matter of time until mfi can show some of the results of what I started.'

What are the immediate priorities in your new role at Commerz Real?
'Whilst we are looking at suitable new retail assets, my job is to also consider leveraging our existing portfolio through possible extensions and refurbishments. With the extension of Orio this year and Westfield London in 2018, we are confident to have improved the value of our portfolio further.'

In terms of retail investment, is Commerz Real targeting specific segments – e.g. shopping centres, high street retail, retail parks?
'For our open-ended fund hausInvest we focus primarily on shopping centres and high street retail real estate. For our institutional investments we might consider retail parks, too, if locations and concepts fit and if we have the right partner. Our retail portfolio currently consists of 18 assets and whilst the number of assets might fluctuate, we always aim to have a retail share of 30-50% in hausInvest. Currently our retail portfolio accounts for about 40%.'

Is Commerz Real targeting specific country markets?
'Although there is a certain focus on European markets right now, we also look for investment opportunities worldwide.'

What is the targeted value of Commerz Real’s total retail asset portfolio (now around €4.1 bn)?
'We aim to hold the share between 30% and 50% of the total volume of our asset portfolio. With the extension of Westfield Center, we already laid a very solid basis for this.'

Can you characterise the outlook for the German/European retail investment market?
'There are many shopping centres in Germany and Europe and the demand for them is high. However, there is an increasing awareness that prices may be too high for some of them. Especially considering the changes that the retail market is currently going through: customer demands are changing, and  consumers may be researching a product or service from their mobile, continuing their research in a shop and then closing the transaction via desktop online. Retailers are adapting to this as they have found that all sales channels are complementary and omni-channel is the most effective sales model. This confirms also that the stationary sale plays an important role in this omni-channel retailing world. In fact, a shop becomes even more important as it offers a place to experience the goods in a unique environment that cannot be offered online.

As most retailers build their business around an omni-channel sales model now, I observe that they are becoming increasingly critical when chosing a particular location. It needs to be the right shop size in the right location within the best shopping centres. So retailers are reducing their overall number of stores but the stores that they have become more spectacular and a real experience to visit. This will have an impact on many shopping centres, especially if investors are not prepared to invest to ensure that they remain attractive for retailers and customers alike.'

You have broad international experience in the retail sector. Can you single out one project or process which has helped you most in your career?
'Before I got married and moved to Germany I worked on the expansion for [UK department store chain] John Lewis. At the time – and I don’t think this has changed – everyone working for John Lewis was requested to work on the shop floor during the sales period. This was encouraged to show everyone what the business was all about and experience how important it is to make each and every customer happy for them to come back. This made me understand early on that it is really all about the customer in the end.'

Can you detail your involvement with the German Council of Shopping Centers?
'The German Council of Shopping Centers is a very prominent organisation in the German retail market, with more than 750 members. Surprisingly, until last year when we started the new ‘Forum Asset Management’ there was no platform to discuss (retail) asset management standards and practices. The great turnout of national and international asset and fund managers at this forum proves that there is a great demand to discuss ways to ensure good future performance whilst continuing to offer an exciting environment for retailers and consumers in German shopping centres. Hopefully the next forum in November will be equally stimulating and lead to further valuable impulses.'