Table Of Contents
OVERVIEW
Summary
Shopping centers remain viable despite European debt crisis, though poorly located suffer
Shopping center development is back in fashion …
especially in CEE, Russia and Turkey
Extension/refurbishment to take place of new build
Investment capital surges back in
Shopping centers seen as relatively safe investments
The bigger the better for consumers
Bigger the better creates virtuous circle for owners
Wooing top retailers …
… by really understanding a center's shoppers
Spreading across the continent
A lot of development potential in Europe's fringes
Sustainability grows in importance
Main conclusions
Shopping centers remain viable despite European debt crisis …
though some older, poorly located ones will suffer
Shopping center development is back in fashion …
especially in CEE, Russia and Turkey
Extension and refurbishment to take place of new build
Investment capital surges back in
Main target is prime centers
Shopping centers seen as relatively safe investments
Owners compete for investment/development funds
The bigger the better for consumers
Bigger the better creates virtuous circle for owners
Owners still aim to create space
Wooing top retailers …
… by really understanding a center's shoppers
Net to be cast wider for exciting new retail brands
Spreading across the continent
Lot of development potential in Europe's fringes
Sustainability grows in importance
EUROPEAN SHOPPING CENTER DEVELOPMENT
50 years of development
Picks up speed in new millennium
Annual development activity
Shopping center floorspace per head
Extension activity
Recent shopping center developments
Investment in shopping center acquisition
Retail investment totaled nearly €40bn in 2011, a 3.5% increase on 2010
In 2011 investment in shopping center assets surged to just under €22bn
桔There are two broad strategies in play with regard to shopping center investment
Sustainability is gaining in importance
SHOPPING CENTER GROWTH STRATEGIES IN DIFFICULT TIMES
Physical
New shopping centers
Extensions and refurbishments
Refurbishment aims to retain tenants
Redevelopment aims to reposition the center, increase its reach and improve its market position
Shopping center landlords use all means to enlarge portfolios and improve quality
Standing out in a crowd
Entertainment
e-marketing
THE RISE OF INTERNATIONAL RETAIL BRANDS
Desirable international chains
Big Box anchor tenants
International retailer outlook
THE CONSUMER ECONOMY
Population
Turning greyer
Retail sales
Consumer confidence
Retail sales
Consumer economy outlook
Austerity pain
Stability for some and opportunities in the east
IMPACT OF THE EUROPEAN ECONOMIC CRISIS
The global financial crisis
Impact on consumers and knock-on effect on shopping centers
Shopping centers shine amid economic storm clouds
Refreshing the retail mix
Seeking out the world's top retail formats
Shopping center rents bounce back and a following wind is gathering momentum for future development
The euro – help or hindrance?
Immense pain in low productivity areas of the Eurozone
The problem with the euro is that it doesn't have a central treasury and bank
Seemingly no way out of the crisis
Weathering the storm
Economic outlook
Global economy in uncharted waters
Armageddon isn't impossible but it's much more likely that we'll keep muddling along
Either way, it is hard to see the euro surviving in its current form
Even in the most difficult times, shopping centers will remain good solid investments
SHOPPING CENTER INDUSTRY PLAYERS
Wide variety of players
Investment factory
Comparative statistics
AFI DEVELOPMENT
Russian real estate development company listed on the London Stock Exchange
Recent key events
AFIMALL flagship opens
AFI buys City of Moscow stake
Financials
AFIMALL City drives profits
Strong growth in H1 2012, but revaluation losses mount
Outlook
A new rental income stream
Looking for the next major retail development
ALTAREA COGEDIM
REIT and development company aims to triple revenue in three years
Recent key events
Acquires online shopping mall
Opening new shopping centers
Disposes of non-core assets
Business strategy
Regional shopping centers
Retail/entertainment
Family Village
Multichannel property company
Financials
Steady financial performance
H1 2012
Shopping center portfolio
Outlook
Fewer but bigger
Regional shopping center development sites are much sought after
Exploiting online
CAPITAL SHOPPING CENTRES
Only pure UK prime shopping center REIT
Recent key events
Buys big in the UK
Ups funding
Increasing activity overseas
Financials
Transformed by Trafford Centre
2012 sees fall in LFLs
Shopping center portfolio
Outlook
Catering for consumers
Focus on the existing portfolio
A two center upgrading in Nottingham
Investing in strength
No funding strain
CITYCON
Finland's finest
Recent key events
Acquisitions in Finland
Adds Denmark
Reinvests in the estate
Divesting non-core assets
New builds
Manages third party owned centers
Financials
Portfolio
Outlook
Presses the accelerator
Focus on convenience
Extends the boundaries
CORIO
Dedicated shopping center manager and developer
Recent key events
Openings, acquisitions and extensions in 2011
Expands in Turkey’s growing economy
Acquires centers from Multi
Invests in Italy
Disposals
Financials
Shopping center portfolio
Outlook
Managing through difficult times
Upping the pace of disposals
Focusing on shopping centers
Surviving the worst economic storm
Overall the strategy seems to be driven by necessity rather than choice
EUROCOMMERCIAL PROPERTIES
One of Europe's most experienced owners of shopping centers
Recent key events
Investing in the wealthy core
Divestments
Financials
Shopping center portfolio
Outlook
Not a rash investor
HAMMERSON
Focusing on shopping centers
Recent key events
Out of office
Financially secure
Redeveloping Croydon
Financials
LFL income increases in H1 2012
Shopping center portfolio
Outlook
Focus continues on UK and France
Ambitious city center upgrades
Marseille center looks set to be a success
Need to watch costs
KLÉPIERRE
Strong European spread
Recent key events
Acquisitions
Pioneering digital marketing in malls
Disposing non-core assets
Maintaining the pace of new openings
Enlarging existing centers
Financials
Solid performance in H1 2012
Shopping center portfolio
Outlook
Continues to avoid risk
Favoring premium shopping centers
Managing smaller centers
Targeting disposals of €1bn to end 2013
Remaining attractive to outside investors
MULTI CORPORATION
Largest independent retail developer in Europe
Recent key events
Securing adequate funding
Improving its operational efficiency
Taking control in Italy
Selling projects on
Opening new centers
Enlarging and renovating existing centers
Group structure
Multi Development
Multi Mall Management
Multi Investment
Multi Asset Management
Turkey
Outlook
Turkish focus
Potential throughout the Muslim world
A wide European spread
Collaborating with other big players
PLAZA CENTERS
CEE shopping center development specialist
Recent key events
Opened major center in Poland
Into Serbia
Paying down debt
Financials
European shopping center portfolio
Outlook
Bringing modern retail facilities to eastern Europe
A strong development pipeline
Increase in number of managed centers
SONAE SIERRA
Europe's widest spread operator
Recent key events
Into North Africa
New shopping centers
Extensions/renovations
Strengthening the position in Brazil
Some disposals
Financials
H1 2012
Shopping center portfolio
Outlook
Iberian portfolio weighs heavily
Finding it hard to sell assets
Exploiting the buoyant Brazilian market
Expanding in Germany
Selling the group's skills
TRIGRANIT
One of the largest property developers in CEE
Recent key events
Project completions
Project starts
Shopping center developments
Outlook
Mixed-use urban projects
Into China
UNIBAIL-RODAMCO
Europe’s biggest listed player
Recent key events
Shopping center acquisitions
mfi acquisition
Upgrading and enlarging
A €4.2bn retail development pipeline
Success in raising new funding
Financials
Shopping center portfolio
mfi portfolio
Outlook
Progresses in a tough environment
A major advance into Germany
May consider UK entry
Appeals to international retail chains
WESTFIELD
A major non-European company looking for growth
Recent key events
Opening of Stratford City
Into Italy
Clearing the decks
Financials
Center portfolio
Outlook
Regional malls the way forward
European opportunities limited
May look for acqusitions
APPENDIX
Definitions
Shopping center
North & west Europe
Central & southern Europe
Developed east
Rest of Europe
Fair value
GDP
Occupancy cost ratio
REITs
Rotation rate
Square metre
Ask the analyst
Disclaimer
List Of Tables
Table: Distribution of European shopping centers 2012
Table: Proportion of population aged 65 or over 2000, 2005 & 2011
Table: EU consumer confidence year-on-year % change June 2011 – May 2012
Table: EU year-on-year % changes in real retail sales at 2005 prices Q4 2010 – Q1 2012
Table: : E xamples of leasing activity 2011
Table: Recent major shopping center acquisitions 2011–12
Table: Shopping center players comparative statistics December 2011
Table: AFI Development company information 2012
Table: Altarea company information 2012
Table: Altarea Cogedim financial performance for years ending December 2007–11
Table: Capital Shopping Centres company information 2012
Table: Capital Shopping Centres financial performance 2010 & 2011
Table: Capital Shopping Centres shopping center portfolio 2012
Table: Citycon company information 2012
Table: Citycon financial performance 2010 & 2011
Table: Citycon shopping center portfolio 2011
Table: Corio company information 2012
Table: Corio financial performance 2007–11
Table: Corio shopping center portfolio by country 2011
Table: Corio shopping center development portfolio 2012
Table: Eurocommercial Properties company information 2012
Table: Eurocommercial Properties financial performance 2009–12
Table: Eurocommercial shopping center portfolio by country June 2012
Table: Hammerson company information 2012
Table: Hammerson net rental income 2010 & 2011
Table: Hammerson shopping center portfolio 2012
Table: Hammerson shopping center pipeline 2012
Table: Klépierre company information 2012
Table: Klépierre financial performance 2007–11
Table: Klépierre shopping center portfolio 2011
Table: Multi Corporation company information 2012
Table: Plaza Centers company information 2012
Table: Plaza Centers financial performance 2010 & 2011
Table: Plaza Centers European shopping center portfolio 2011
Table: Plaza Centers European shopping center development pipeline
Table: Sonae Sierra company information 2012
Table: Sonae Sierra total rental income by country 2010 & 2011
Table: Sonae Sierra key performance indicators 2007–11
Table: Sonae Sierra total GLA evolution 2006-2011
Table: TriGranit company information 2012
Table: TriGranit shopping center portfolio 2011
Table: Unibail-Rodamco company information 2012
Table: Unibail-Rodamco assets 2010 & 2011
Table: Unibail-Rodamco net rental income from shopping centers by region 2010 & 2011
Table: Unibail-Rodamco shopping centers floorspace by region 2011
Table: Unibail-Rodamco shopping center portfolio asset valuation and yields 2011
Table: mfi shopping center portfolio June 2012
Table: Westfield company information 2012
Table: Westfield Group's net profit on an equity share basis 2010 & 2011
Table: Westfield UK retail portfolio 2012
List Of Figures
Figure: Number of European shopping centers 1961–2013
Figure: New shopping center floorspace 1961–2013
Figure: Shopping center floorspace per head of population 2011
Figure: Extensions as percent of annual development activity, Europe, 1961–2013
Figure: Average shopping center size 1961–2013
Figure: Strategies for growth 2012
Figure: Regional mall virtuous circle – the Unibail-Rodamco example 2011
Figure: European population by broad region 2011
Figure: European retail sales by broad region €m 2011
Figure: Indices of GDP at constant prices in northern & western Europe 2000–17e
Figure: Indices of GDP at constant prices for GIPSI countries 2000–17e
Figure: Indices of GDP at constant prices in eastern EU 2000–12e
Figure: Indices of GDP in the rest of Europe 2000–12e
Figure: AFIMALL City, Presnenskaya, Moscow 2012
Figure: Altarea properties Cap 3000 St Laurent du Var & Villeneuve la Garenne 2012
Figure: Capital Shopping Centres - Trafford center Manchester 2012
Figure: Citycon Myyrmanni, Vantaa shopping center 2012
Figure: Corio shopping malls Aarhof, Netherlands & Maremagnum, Barcelona, Spain 2012
Figure: Eurocommercial Properties Passy Plaza, France & Ingelsta mall, Sweden 2012
Figure: Hammerson West Quay, Southampton, UK shopping center 2012
Figure: Klépierre Aqua Portimao shopping center, Algarve, Portugal 2012
Figure: Multi Corporation Forum Kayseri shopping center, Turkey 2012
Figure: Plaza Centers Torun Plaza, Poland 2012
Figure: Sonae Sierra Centro Colombo shopping center Portugal
Figure: TriGranit Arena Centar, Zagreb, Croatia 2012
Figure: Unibail-Rodamco Täby Centrum mall, Sweden
Figure: Westfield Stratford & London shopping centers 2012