Shopping centres are essential focal points in the urban landscape. The main objective is to attract a constant flow of customers. To achieve this, they often opt for a strategic location and focus on a plurality of services. This type of asset attracts both user-operators and investors, with more than 1/3 coming from international sources.
From small neighborhood shops to large stores, mini-markets and restaurants, local businesses offer a variety of assets. For these properties, location is of paramount importance in the evaluation of the walls and the leasehold rights. They arouse keen interest among investors looking for diversification.
The retail park is a group of open-air shops, with a common parking lot giving it a structure similar to that of a small town. Its architecture is constantly evolving, tending towards a modernization that includes the integration of green spaces. They target the same market of users and investors as shopping centers often included in the same portfolio.
Outlet Centers offer unsold items at reduced prices, often at least 30% off. Once located in industrial areas, these centers are increasingly popping up near high-potential tourist sites. This high-yield niche market offers significant growth potential for investors.
Outlet Centers...!
Outlet centers are a collection of stores that offer items from previous collections at reduced prices, often by at least 30%. These stores are primarily shopping destinations where consumers go specifically to find attractive offers. Previously located mainly in industrial areas or on the outskirts of major cities, these centers are increasingly located near tourist sites with high potential.
The location and reputation of the brands occupying an outlet center are crucial elements in the evaluation of this type of commercial property. This niche market, characterized by products offering good yields, has significant growth potential. Outlet centers are rarely available on the sales market, which makes them very attractive for investors looking to diversify their real estate portfolio.
What are the attributes that characterize the “Outlet Centers” asset ?
Between the 1980s and the 2000s, outlet centers experienced a notable expansion, initially in the United Kingdom before spreading across Europe. This growth is largely explained by the economic context of the time: in times of crisis, consumers are naturally drawn to more affordable purchasing options.
Factory outlets, as popular shopping destinations, stand out from other types of retail by their ability to convert visitors into buyers and by the high amount of spending made: although customers visit them less frequently than in traditional shopping centers, they generally make larger volumes of purchases. These centers generally host the same large international brands. Both investors and developers pay particular attention to the aesthetic aspect of outlet centers as well as the quality of their environment.
Originally, the first factory outlets were mainly established in industrial areas or on the outskirts of large cities. However, new-generation outlet centers are taking a different approach by choosing locations near popular tourist attractions, which helps maximize customer inflows. Often focused on luxury brands, these centers are becoming must-see destinations on tours offered by tour operators, attracting customers looking for bargains and a unique shopping experience.
What are the market trends ?
The « Outlet Center » asset is sought after and vacancy rates are relatively low. The market is characterized by strong development potential, particularly in the South of France. Some target the « mass market », others are more oriented towards high-end brands.
The top 3 centers in terms of turnover in France are located in the northern half of France: « La Vallée Village » at Disneyland Paris, followed by « Marques Avenue » in L’Île-St-Denis and « Marques Avenue » in Corbeil Essonne. In Europe, the « Bicester Village » in London, the « Kildare Village » in Dublin, the La « Roca Village » in Barcelona, the « Wertheim Village » in Frankfurt and the « Fidenza Village » in Milan attract the most tourists.
What are investors' expectations ?
The Outlet Center derives its profitability from its niche product nature, making it a popular choice for diversifying investment portfolios. The management of this specific asset is often entrusted to specialized operators such as “Concept & Distribution” or “Value Retail”. Transactions in this market are relatively rare. In terms of yield, a rate of between 5.25% and 6.50% is generally expected.
What are the main evaluation criteria for outlet centers ?
The valuation of a factory outlet is based on several criteria, including the intrinsic qualities of the property, but also and above all on the quality of its location and its rental situation. Our experts pay particular attention to these aspects to assess the potential for growth in turnover.
By analyzing these factors, they are able to provide an accurate and complete valuation of the factory outlet, allowing investors to make informed decisions. To estimate the value of « Outlet Centers », our team mainly uses the capitalization and discounted cash flow (DCF) methods.
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- See also !
Shops...!
Shopping centers
Shopping centers are focal points in the urban landscape. The main aim is to attract a constant flow of customers...
Local shops
From local shops to superstores, location plays a vital role in the valuation of premises and leasehold rights...
Retail Parks
A retail park is a collection of open-air stores. They target the same user and investor market as shopping centers...
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