VIA Outlets plans to acquire around €500 mln of outlet centres in Europe over the next three to five years, according to Timon Drakesmith, chairman of the advisory committee of VIA Outlets and CFO of UK retail REIT Hammerson, which holds a 47% stake in the VIA business.
'In the next three to five years we want to expand by €500 mln,' Drakesmith said at the recent opening of the extension to Bataviastad, an outlet centre near Amsterdam owned by VIA Outlets. An average outlet centre requires an investment of more than €100 mln, he explained.
VIA Outlets has assembled a €1.3 bn portfolio of 10 outlets across eight European countries in the past three years. The JV has four partners. Hammerson works alongside Dutch pension fund APG (which also has a 47% stake), outlet business Value Retail (40% owned by Hammerson) and European fund manager Meyer Bergman.
Drakesmith said yields of up to 6% are paid for outlet centres. ‘We aim for a centre to have an unfinanced internal rate of return of 12%,’ he said.
Growth in the sector is higher than in other retail markets and Hammerson wants to tap into that and increased its holdings in Value Retail and VIA last year when it also reported a 19% increase in sales density for the VIA portfolio.
Hammerson plans to increase the proportion of outlet centres in its €11 bn retail portfolio from 17% to 20% in the coming years.
‘We are looking at acquisitions elsewhere in Europe, but we don’t have any immediate plans. Attractive cities include Madrid, Brussels and Geneva,’ Drakesmith said.
