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Shopping mall - Fachmarktzentren
REFIRE has tracked a number of significant transactions in the "Fachmarktzentrum" or retail park segment over the past month, including new acquisitions by Hamborner REIT, GRR and Redos.
The amount of new retail space being developed in the form of retail parks ("Fachmarktzentren") has fallen this year in Germany to only 71% of the previous year's growth level, in contrast to the trend in the rest of Europe. Europe as a whole will see 1.3m sqm of new lettable space in the sector by the end of the year – 50% more growth than last year – according to a new study "European Retail Park Development Report" published recently by property advisors Cushman & Wakefield.
According to Ursula-Beate Neißer, head of rsearch at Cushman & Wakefield in Frankfurt, the reason is the high existing level of market saturation. "In this country we have 8.5m sqm of lettable space in the retail park category, second in Europe only to France." The two countries combined have about 70% of the total retail park space in Europe. In Germany in 2015 a total of eight new retail parks with more than 5,000 sqm were opened, and in 2016/17 at least a further seven of this size will open.
Across Europe the C&W researchers expect a further 1.1m sqm of retail park space to open, bringing the total by the end of 2017 to over 40m sqm from the 37.3m sqm at beginning of 2016. 54% of this growth will have been in France, followed by 17% in the UK and 10% in Italy.
The segment as a whole will remain interesting for investors and retail tenants, says Martin Supple, EMEA Out of Town Retail Partner at C&W, thanks to relatively low rents, flexible layout formats and better logistic structures for product delivery. One-stop neighbourhood shopping and free parking are still very attractive for consumers, he says.
REFIRE has tracked a number of significant transactions in the "Fachmarktzentrum" or retail park segment over the past month, including new acquisitions by Hamborner REIT, GRR and Redos.
The listed Hamborner REIT bought the “Kurpfalz Center” retail park in Mannheim’s Vogelsang commercial district for €80m from Württembergische Lebensversicherung. The "Kurpfalz Center" (tenants include the REAL hypermarket, Toys'R'Us, and Adler, among others) was modernized and expanded in 2013 and now offers 28,000 sqm lettable space. Initial gross yield is about 5.1 %. Hamborner owns €960m in German assets, generating rent of €29.9m annually.
Meanwhile GRR paid €23m to Stuttgart family office Widerker for the 11,500 sqm retail centre ZIM in Zirndorf near its home town of Nüremberg for its GRR Retail Fund Nr. 2, making this GRR's largest single transaction to date. Anchor tenants include REWE, Norma and Rossmann. GRR's CEO Susanne Klaussner said, "In addition to more deals at previous ticket sizes, we'll be looking to buy even larger locations of out to €30m in future." The fund is targeting an overall volume of €330m.
GRR also added assets to its GRR Retail Fund Nr. 1. The company paid €11m for a self-service Kaufland store with 6,500 sqm in Magdeburg, close to the old slaughterhouse district in Stadtfeld Ost. It also added a 3,600 sqm REWE grocery store in the Wanheimerort neighbourhood of Duisburg, near to the heavily-frequented Düsseldorfer Strasse. REWE has been in the property for over 30 years, and recently signed a new 12-year contract.
Another company buying retail park assets for its funds is the Hamburg-based retail asset manager and investor Redos Real Estate. It bought seven retail properties worth €72m for its institutional real estate fund REDOS Einzelhandel Deutschland in the first half of the year, it recently announced.
The assets, acquired from several sellers, include grocery stores and specialist retailers in North-Rhine Westphalia, Bavaria and Baden-Württemberg as well as a retail park located near Hamburg. Tenants include food retailers Kaufland, Edeka and coop and DIY chain toom. With a targeted leverage rate of 50%, the fund has a target volume of €750m – of which a total of about €315m has already been invested.
Redos said that further assets worth almost €120m are currently in the due diligence phase or in the negotiation of purchase agreement phase. The company is looking to buy properties worth between €5m and €25m in the core and core plus segments for the fund, which was launched in partnership with fund manager Union Invest and is aimed solely at institutional investors.