Dutch listed high street specialist Vastned has sold its Turkish portfolio and is now focusing on the top 5 cities in Western Europe, writes Judi Seebus in the April 2017 edition of PropertyEU Magazine.
Since taking over the helm at Amsterdam-based retail specialist Vastned in 2012, the company’s CEO Taco de Groot has worked hard to streamline the portfolio from ‘a mixed bag’ of retail parks, warehouses, shopping centres and high street assets.
'We saw the changes ahead in the retail sector and asked ourselves which locations are vulnerable and which will perform well over the longer term? In France for example, we had assets in 52 locations across the country. We sold assets in the smaller towns and cities and now have concentrated our presence in just a few major cities,' de Groot said.
The same was done in Belgium and Spain and now De Groot is planning to repeat the exercise in the Netherlands where it is gearing up to sell roughly €100 mln of assets in the coming period, in particular smaller shopping centres and retail warehouses in regional towns.
Best shopping streets
Following the divestment of the Turkish portfolio, Vastned’s focus is now on assets on ‘the best shopping streets in the best shopping cities in large Western European cities’. Growth will be targeted in five selected cities: Amsterdam, Antwerp, Madrid, Paris and Barcelona, De Groot noted. 'We will focus on growth of the clusters in these cities in a pragmatic way.'
Conditions in the retail market in Western Europe are favourable, he added, pointing to growing consumer confidence and rising consumer spending. 'We expect retailers with shops in the best locations in particular to profit from this. Our results for 2016 once again confirm that premium city high street shops generate steady and predictable results,' he said.
In total, the value of the premium city high street portfolio, excluding acquisitions and disposals, rose 1.2% or €13.4 mln in 2016. The occupancy rate was close to 100%, while like-for-like gross rental income was up 0.5%. The assets in the Dutch portfolio that are now up for sale are of inferior quality to the high street properties, but De Groot countered that it is now ‘much easier’ to sell in the Netherlands than it was two or three years ago thanks to the improved economic climate. 'Things are much better than they were. More investors are thinking that the prices for secondary assets reflect the risk and now offer better value. The really prime assets are more expensive.'
Off-market deals
Potential buyers include owner-occupiers as well as foreign investors. 'But foreign investors tend to want a bigger ticket,' De Groot noted.
The proceeds will be spent on assets in its key cities where it has local people on the ground. 'We hardly ever buy anything from a glossy brochure, we talk to our neighbours to see if we can create a cluster in a street. That makes sense for us and for our tenants as we can then more easily facilitate expansion or downsizing. We do work with agents as well, but off-market deals are a real sport for us.'
