New Vastned Retail chief aims to lift share of high street assets

Taco de Groot, the new CEO of Dutch listed retail property company Vastned Retail aims to boost the share of its high street properties to 65% from the current level of 48%. De Groot made the announcement at the presentation of his strategic vision for Vastned Retail.

From 2008 to June 2011, the total annual return of high street assets within Vastned Retail’s portfolio was 7.6%, compared to 4.9% of non-high street assets. Vastned Retail also aims to boost the portfolio by EUR 100 - 200 mln a year through selective acquisitions in core countries. A review of its portfolio has further earmarked EUR 90 mln for disposals in the next two years

'We are building on a quality portfolio of high street shops at premium venues in the larger cities,' De Groot said in a press statement. 'In order to meet the more selective demand of tenants in an even more competitive environment we will change the management, structure and culture of the organisation. Thirdly, we will further optimise our financing through extending the duration of the loan portfolio and increasing the number of funding sources.'

The introduction of this new three-pillar strategy will enable Vastned Retail to become more stable and predictable, De Groot added. Analysis shows that with higher rental growth and a higher occupancy, high street asset values are more resilient.

The company also aims to diversify its funding base, by increasing access to additional financing banks and alternative funding sources, with a new target of 25% of the total debt.

In addition, it plans to extend the duration of its loan and interest rate portfolios.The target long term LTV will be between 40% to 45%, with exceptional deviations in case of attractive investment opportunities.

Vastned Retail said the revised strategy was a response to changes in the retail market, e-commerce and other factors such as the ageing population and limited population growth.