Europe's outlet centre sector is attracting more capital, but new development opportunities are running out, according to Daniel Losantos, CEO of Spanish outlet centre developer Neinver.
'A few unique opportunities still exist for developing outlet centres in Europe, but these will decrease over time and become more and more complex,' he told PropertyEU in an interview. 'Developing successful outlet centres today requires a mix of entrepreneurial/development corporate DNA and highly specialised asset management skills – all necessary to successfully manage the different phases involved in the entire property cycle.'
The European outlet centre sector has held up well during the crisis and outperformed other retail real estate segments, Losantos pointed out. ‘There is a growing awareness of this type of asset, but this has increased the risk of new players entering the sector with the wrong idea that anyone can manage outlet assets. In fact, they require a specific, specialised approach to asset management, involving intensive strategies for leasing, well-targeted marketing and tourism, as well as efficient property management.’
Strategic partnerships
The long process of developing a property — from pre-development to opening — and the increasing demands by investors and authorities regarding criteria such as good governance, strong sustainable development and long-term commitment, are other key issues facing the sector today, he added. 'Our company is meeting these challenges by setting up strategic partnerships and by managing all its properties in accordance with sustainability standards such as BREEAM or ISO.'
In late November last year, Spanish developer-investor Neinver announced it had acquired a portfolio of six outlet centres with a market value of €700 mln together with its joint venture partner TH Real Estate. The Neinver-TH outlet portfolio is now believed to have a total value of around €1.2 bn.
Prior to its partnership with TH Real Estate, Neinver had a joint venture with developer MAB, part of Rabobank’s real estate business, which was set up in 2010 to develop a number of outlets across Europe. When the Dutch bank decided to wind up MAB this created an opening in 2014 for TH Real Estate – the amalgamation of the former Henderson property business with that of US financial group TIAA – to enter as the institutional backer.
