VIA Outlets, the venture partnership formed by APG, Hammerson plc, Meyer Bergman and Value Retail, has signed an agreement to acquire four established outlet centres with a total gross asset value of €587 million as part of a growth strategy in the European outlets market. The transaction, at a blended net initial yield of 5.5 percent, is subject to regulatory clearance.
The retail venues are located close to major cities in Germany, Portugal, Spain and Poland. Their purchase takes the total size of the VIA Outlets portfolio to €1.1 billion across 10 assets and delivers critical mass to this successful European outlets venture, in which Hammerson has a 47 percent interest.
Timon Drakesmith, CFO of Hammerson plc and Chairman of VIA Outlets Advisory Committee, said: “This is a rare opportunity to acquire strong outlet centres in an off-market transaction. Well-positioned European outlets continue to deliver strong sales growth supported by an improving customer offer and increasing tourist numbers across Europe.”
VIA Outlets has identified opportunities to drive growth in sales densities and operating income by evolving the brand mix and delivering marketing and tourist initiatives. To support the enlarged portfolio, the VIA Outlets organisational structure has been enhanced through secondments and external hires to expand its asset management, marketing and finance teams. The five-year forecast unlevered IRR for the acquired assets is 11 percent.
The largest outlet to be acquired is in Zweibrücken, Germany, at 29,000 sqm with 114 tenants. It is located on the border between France, Germany and Luxembourg and connected by the main arterial roads in the region. It was Germany’s first established retail outlet and includes Versace, Michael Kors, Polo Ralph Lauren, Tommy Hilfiger and Esprit. Sales density is the highest across the VIA Outlets portfolio at €6,000 per sqm and annual footfall is 3.8 million.
Located close to Porto, Portugal, the outlet in Vila Do Conde receives annual footfall of 4.3 million. The outlet covers 28,000 sqm with 129 tenants and the acquired site has further adjacent development land. Brands trading at the outlet include Polo Ralph Lauren, Michael Kors and Carolina Herrera with average sales density is €4,000 per sqm.
The outlet in Spain is located north east of Seville, attracting a growing number of tourists visiting the Andalucia region. The outlet is 16,400 sqm and has 65 retail units with brands including Tommy Hilfiger, Mango, Polo Ralph Lauren and Adidas. The outlet produces sales densities of €3,600 per sqm and has annual footfall is 2 million.
The outlet in Wroclaw, Poland, is the only retail outlet in the western Poland region and includes 15,800 sqm of retail space and 87 units. The outlet houses brands such as Nike, Tommy Hilfiger, Adidas, Guess and Calzedonia and sits within a wider retail offer. Sales density is €3,300 per sqm and annual footfall is 2.8 million.