Vastned Retail puts stronger focus on high-street

Dutch retail property fund Vastned Retail is to roll out a new strategy aimed at increasing its high-street exposure to 65%, from 48% at present.

The Euronext-listed firm said 'high-street is the way to go'. 'We know that there are challenges in retail areas too, but truly popular shopping streets remain strong,' CEO Taco de Groot said at the presentation of the company's third-quarter results. 'Top locations remain attractive to retailers and consumers.'

Over the past three and a half years, the high-street portion of Vastned Retail's portfolio has shown significantly better results, with a total annual return of 7.6% versus 4.9% for the non-high street assets. 'We are on the move to change the culture of our company,' De Groot said. From now, the company will be more aggressive on the acquisition side, and plans are to buy some EUR 100-200 mln of new assets each year, while continuing to divest properties which are no longer strategic.

In the first three quarters of 2011, Rotterdam-based VastNed Retail posted stable direct results, with a nearly 5% increase in gross rental income. Vastned Retail's property portfolio saw a positive revaluation of EUR 28 mln so far this year, reflecting a net yield of 6.4%. Value movements in the third quarter were negative, however, at EUR 6.8 mln, due to marginal write-downs in the Netherlands and Spain.

The occupancy rate stood at 95.3% at end-September 2011, up from 94.9% a year earlier. Looking forward, Vastned Retail believes that 'improving the average occupancy rate will remain a challenge if the economic developments do not improve'.