European listed retail property specialist Vastned has announced a new strategy focusing on the creation of city-centre buildings which offer a mix of shopping, working and living.
In a strategy update in response to challenges posed by the pandemic, the €1.7 bn property owner said it is shifting its focus to retail properties that attract different types of tenants and where there is potential to create apartments or offices above the shops. Where possible, Vastned aims to create clusters of properties in the various cities.
‘Vastned is entering a new phase with a strategy update,’ commented Reinier Walta, interim CEO due to be appointed as CEO at the annual general meeting of shareholders planned for 15 April. ‘The retail market is in transition due to the growth of e-commerce and changing consumer behaviour, and Covid-19 has only accelerated this process. So it became clear during the Covid-19 pandemic that the part of our property portfolio that is dependent on fashion and tourism is particularly vulnerable. Vastned will therefore further optimise and concentrate the property portfolio with the aim of creating a city centre portfolio with a greater degree of diversification of tenant types in historic city centres where shopping, working, living, and leisure go hand in hand.’
This means optimising the current portfolio by developing apartments or offices on the upper floors and concentrating on properties that are suitable for multiple tenant types. In addition, the company will actively manage its portfolio by divesting properties or parts of the portfolio, provided it can sell them at the right value. ‘We expect property in historic city centres to remain attractive as the trend towards urbanisation continues,’ added Walta.
Although Vastned achieved a relatively high rent collection rate of 90% by the end of 2020, it saw the occupancy of its portfolio fall to 96.5% while its portfolio shed over €80 mln in value over the year on a like-for-like basis.
In a move reflecting Vastned’s cost-cutting efforts but also a general trends towards combining working from home with working in the office, Vastned announced plans to move from its Amsterdam Zuidas office to a smaller office space in Hoofddorp at lower costs. Walta: ‘The team will be condensed even further in the course of this year, so we will need less space.’
As a result of these measures, Vastned expects to realise a 10% saving in normalised general expenses in 2021 compared to 2020.
