Location in retail is more important than ever

 

I would say there are four main trends. First, retail is changing rapidly and the speed of change is going to accelerate over time. One thing we can be certain of is uncertainty is set to increase, and that to tackle this, you need a strategy and an organisation that can adapt more quickly. Second, location is more important than ever. The most dominant cities are becoming even more so. My belief is that mainly the best locations for retail investment will be those that already exist, and we won’t see many new locations emerge. The third thing I would highlight is mixed-use in an urban context. With a strong city centre location, you can change the function of your property over time, adding e.g. residential, offices, or a hotel. Finally, I would add the impact of online retail, which is resulting in a structural change to the market. The amount of physical retail locations will shrink over time but both online and offline retailers will be present in the best city centre locations where rents will increase.

 

 

We had a shopping centre in our Nordic portfolio and we observed that the dominance of the shopping centre was starting to shrink. Instead of waiting for a turn in the cycle we decided to be proactive. Together with the local municipality, we prepared a long-term plan where the intention is to decrease the amount of retail space and over time more than 1,000 apartments added to the scheme.

 

From the world of high street, I can provide a Dutch example. We have a market leading portfolio located in the best retail locations of the Netherlands, anchored by Amsterdam. These are often multi-storey buildings that can be fully or partially transformed over time. In a market like Amsterdam, where prices per sqm on the top floors of buildings are only stable for retail but are significantly increasing for residential, hotel or offices on the back of urbanisation and tourism, it can be really exciting to convert these top floors. With active management, you can create value in urban high street locations everywhere.

 

 

 

Yes, but in the right locations. What you see now is general investors stepping out of the market because they find it difficult to grasp the future of retail, which provides specialised investors with forward-looking strategies like us with the opportunity to drive value in that space.

 

 

Yes, and not only in retail but also in logistics and offices. We rely on the sector expertise within the firm even more so than before. We have local teams on the ground that are driving value in each sector and we combine that with sector expertise at a European level. If you successfully blend these two types of knowledge, you can create the best client solutions.

 

 

Absolutely, we have a lot of data available to us at the firm which we use much better than we did five years ago. Looking ahead, that data will be used even more effectively thanks to technology. Also, the former marketing director of Bol.com (basically the Dutch version of Amazon) has joined the supervisory board of my fund in the Netherlands. Having a person like that on the board means that someone is challenging me on how to embrace online retail in your physical strategy, which is important today and defines success for tomorrow.

 

 

I would have to mention Amsterdam, but also the key cities of Germany. I’m positive about the urban potential of these kinds of locations which we can unlock with our active management approach.