Retail Growth Club MeetingLondon, April 18th

High Street Retail Growth

Experiential retail trends rank top of the agenda for long term stability in the asset class for global investors

….And yet, luxury stores in prime location, outlets, pop ups, F&B as well as understanding customer footfall through digitisation were also all seen as critical factors in how retail is being reshaped, re-imagined and re-managed as investment portfolios.

This is why, last Thursday 18th April, GRI club members from across Europe gathered to discuss the stability of high street retail as an asset as well as strategies to regenerate assets, identify like minded peers and develop new business friendships. Co-hosted by REAG Duff & Phelps at the Shard, attendees were also treated to a sparking aperitivo networking reception.

The discussion Chair Paolo Magnaschi, kick started the debate by highlighting the current state of retail values. Most portfolios seem to have the majority of investors run for the hills. A few members agreed that the rise of e-commerce and convenience shopping plus a squeeze on consumer spend has contributed to the steady decline in vacancy and rental income over recent years.

It was challenged whether high street retail was indeed a stable market; yields are low in many cities and the tenant demands are changing from longer to shorter and more flexible leases which is proving difficult for investors to back. Some felt that it becoming increasingly difficult to find scale at reasonable prices for city centre demand. To win business, it was argued that investors and asset owners need to be much closer to their tenants to secure long term partnerships; a central management plan would be essential to improve consumer footfall on the high street similar to how outlets and shopping malls manage the customer and consumer experiences.

UK, Spain, France, Italy and German markets were put under the microscope and investment appetite was tested. Whilst the UK was proving a hard market to master, a much rosier picture was emerging for core high street, especially luxury retail in Paris and Milan as they present long term growth potential especially given the rise of tourism and wealth spend.

The room spent some time on the ‘myth’ behind the growth of omni channel retail and whether e-commerce was such a threat to retail property. If omni channel is cleverly integrated, it can prove to be a good ally. Whilst we do need to diversify portfolios to account for last mile delivery, convenience click n’ collect and new build warehousing close to consumers; investors must also be aware to account for their spend and impacts on ROI.

Ultimately, our discussion concluded that while the asset class is clearly under stress, fundamentals still point to growth and long term stability; providing investors embrace the new economy of tenant demand. This might be achieved by downsizing, investing further into last mile delivery, embracing short term leases and providing flexibility or moving into new locations where there is greater footfall from tourists. The core consideration and growth driver was experiential driven assets such as mixed-use shopping parks, outlets and integrated high streets embracing a dynamic mix of F&B, community experiences, sights and luxury stores. If this is so, retail investors need to dig much deeper than simply churning out the age old ‘location, location, location’ mantra. Short term leases, showroom culture, technology and a deeper understanding of how to connect with and fulfil the customer experience are all at the top of the consideration list for smarter retail investments.

Paolo Magnaschi
Chairman & Managing Director
MF Real Estate Advisory
Biography:
Paolo Magnaschi is founding partner of MF Real Estate Advisory and of MF Studio Legale Tributario. He has matured, personally and through his entities, a consistent and highly qualified experience in all sectors of the Italian real estate market including retail, commercial, industrial, logistics, hospitality, leisure and residential. Paolo holds a JD with full marks at the University of Parma and he’s admitted at the Milan Bar Association since 1997. Paolo was lecturer in Tax Law at the University of Bergamo from 1994 to 1999, as well as speaker on various occasions at real estate conventions and events and lecturer at CUOA University master's programs in real estate. Paolo is a RICS member since 2012.
Colin Campbell
Chairman
Pradera Europe
Biography:

Colin is Chairman of Pradera and Chairman of its Investment Committee. Pradera is an asset and fund management company specialising in the retail property sector. The Company is headquartered in London and operates from seven offices in Europe (London, Madrid, Milan, Istanbul, Prague, Warsaw and Munich) and two offices in Asia (Hong Kong and Shanghai). Pradera’s portfolio comprises 56 shopping centres and retail parks in Europe and four shopping centres in China through its joint venture with Macquarie Infrastructure & Real Assets, Pradera Retail Asia. In total, these properties have a combined value of €3.3 bn (€2.4 bn in Europe and £0.9 bn in Asia), a GLA of 1.3 million sqm and comprise 2,900 stores. Before co-founding Pradera in January 2000, Colin was a director and shareholder in a boutique real estate investment management company where he was responsible for the European investment activities of the US real estate opportunity fund, DLJ Real Estate Capital Partners. Colin’s property career includes opening a Paris office for a US real estate investment management company that was subsequently acquired by Lend Lease (for whom Colin identified the Bluewater Shopping Centre opportunity), opening and heading the London office of a UK provincial commercial development company and five years in the investment department of CBRE, in which he began his career.

Paola Macchi
Head of Real Estate Europe
Dolce&Gabbana
Italy
Biography:
Since 2002 Paola Macchi is the Real Estate Director of Dolce & Gabbana, responsible for the European Region. Previously she was head of the high street retail department of JLL in Italy. Paola is graduated in Business Economy at Bocconi University in Milan.
Timetable

Wednesday, April 18

17.00 - 17.30 Welcome Coffee & Registration


17.30 - 18.30 Discussion: High street retail growth - Innovation Trends vs Luxury Chinese Spend


18.30 - 19.30 Networking aperitivo for all attendees

Registration

Membership is by invitation and reserved exclusively for investors, lenders and developers*. 

Qualified individuals (C / Director Level) that believe they could benefit from being part of such a global community are welcome to further details.

If you want to find out on how to become a club member get in touch with Kirsty Stevens.

*Some leniency is given to those outside this category up to a maximum of 10% ratio of the Club.

Kirsty Stevens

Kirsty Stevens

Head of Projects - UK & Ireland

+44 (0)20 7121 5095

kirsty.stevens@griclub.org
Kirsty Stevens
kirsty.stevens@griclub.org
+44 (0)20 7121 5095
Head of Projects - UK & Ireland
GRI Club
Biography:

Kirsty has seven year’s experience in conference production globally. Her previous role included Conference Producer for RICS, fostering events in Corporate Real Estate, Residential, Industrial and Regional Investments across UK, Middle East and Europe. Kirsty is passionate about industrial and logistics, residential alternatives, distressed Investing, as well as connecting investors and developers with focused discussions in her core markets of the UK and Europe.

Club Partners

Duff & PhelpsEvercore

Duff & Phelps

Evercore

Evercore is a premier independent investment banking advisory firm. Evercore was founded in 1995, on the premise that clients would be best served by an investment banking firm free of the conflicts of interest inherent to large, multi-product financial institutions. We believed our model would attract the most talented senior finance professionals to our firm. We believed that by maintaining the highest standards of excellence we could create a firm unlike any other in terms of capabilities to advise on highly complex strategic transactions, dedication to our client and our experience and professionalism. Today, we serve a prominent and diverse set of clients and investors, including leading multinational corporations, large institutional investors and financial sponsors, and high net worth individuals.

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