‘Retail is an industry that is running fast’

Those who adapt and change will be the winners in the new global retail order, says Robert Bonwell, the new chair ICSC’s Asset Management Group

Bonwell, who is also CEO Retail - EMEA at Jones Lang LaSalle, believes asset management will play a key role in sifting the winners from the losers in an environment where index growth income and the opportunity to build new shopping centres with bank finance or short-term institutional funding are all but gone.

PropertyEU: What has changed that makes retail asset management so important in Europe?
Bonwell: Frankly everything has changed. Today we have an economic crisis, a changing population profile, a very limited pipeline of new shopping centres, retailers in distress, new countries to consider and of course the impact of technology and multi-channel. All of these are well known with some solutions but still many issues! One area we perhaps miss is the changing customer of the asset manager. The players are different - the partnership of long-term equity with retail real estate expertise is growing fast. The institutional investor who has a longer term horizon and different return criteria to fixed period funds or bank finance. You can argue that this longer term horizon approach is exactly what the asset manager needs because capital will be required for ensuring that some shopping centres will be winners.

PropertyEU: How can asset managers respond to the unique challenges?
Bonwell: The challenges are certainly unique and a one-size-fits-all solution does not suffice. The solutions have not yet been thought through which makes it a really exciting time for the asset manager. Now is the opportunity for the physical space of retail to ‘fight back’ to leverage multi-channel but who will solve the structure of retail leases in this multi-channel world, how will the retail rent or retail income be assessed and charged and what really is the best ‘new world of retail’ tenant mix?

PropertyEU: What are the main priorities in your new role and what do you hope to achieve in the medium term?
Bonwell: We would like a group of forward-thinking asset managers and ‘next generation’ members on the team who see the rapidly changing retail world and want to be a part of the debate, to see first-hand solutions. We have an ICSC Forum - not a conference but a specific session on the strategic response to these opportunities for the asset manager and frankly the industry. This is not a market trend that is at walking pace; it’s an industry that’s running fast!

PropertyEU Are there best practices learned by particular operators or in a particular region that can be applied elsewhere in Europe?
Bonwell: The really great thing about the retail asset class and industry is it is truly global: inter-regional retail capital is growing year-on-year for retail assets, new markets are opening up, mature markets are having to change, retailers are expanding globally and there is an increasing appetite among all of to us to know what works well and why. There is not one region or operator that has the best solution so we need to get our ‘retail intelligence’ globally.

PropertyEU When not thinking about retail, what do you do in your spare time?
Bonwell: There are a couple of things about most people in the retail industry that is common: the passion for the industry and the constant desire to innovate and improve. I guess you need to be someone who is built like that and lives that in your personal life as well, always wanting to try the next step. Well, being based in France gives me plenty of passion around food and wine and the Alps to plan the next action!

BY CORMAC MACRUAIRI

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