OUR MARKETS
THE NETHERLANDS
A continued strong housing market has resulted in
good turnover growth in the DIY, furniture and
household goods segments. Retail sales in general
are still showing decent growth, but this does not
mean that the pressure on retailer margins is
decreasing.
The fashion segment continues to
struggle, whilst supermarkets and food and
beverage are still expanding. The number of retailer
bankruptcies increased year-on-year, often resulting
in a restart, which puts pressure on rents.
BELGIUM
As a result of increased spending power, private
consumption in Belgium is expected to increase by
some 1.2% in 2019. However, the retail market is
lacklustre, which is particularly felt in peripheral
areas and B-quality high streets.
High-quality
locations can still rely on a healthy demand from
retailers, albeit larger floor-plates are less in
demand. Where fashion operators take more time in
their decision making and have a cautious stance,
others are stepping in. Demand is strong from
expanding food & beverage operators, optical
chains, medical operators and services. As good
quality locations are scarce, these retailers accept
rent levels above ERV.
FRANCE
The French economic growth is stable at some 1.2%.
Under pressure from yellow-vest protesters, the
government announced plans to improve private
spending power by reducing taxes. Private
consumption picked up during the first half.
However, demand from retailers to expand is low
and the leasing process is protracted due to their
cautious decision making.
Demand is mainly coming
from food & beverage, sports and health & beauty
segments. Current rental levels are facing downward
pressure. Mixed-use alternatives that are interested
in opening on high footfall locations are becoming
more active, such as co-working spaces, healthcare
& medical and services.
OPERATIONS
Like-for-like rental growth shopping centres
at 0.8% (indexation 1.7%).
•
Occupancy rate of shopping centres at
95.6% (YE 2018: 96.3%)
•
Q2 shows improving occupancy in the
Netherlands and Belgium compared to Q1,
decreasing in France
•
Increase in YTD footfall of 1.0% from 62.9m
to 63.5m
Occupancy increased during the second quarter in
Belgium (+0.4%) and the Netherlands (+0.2%). In
France, occupancy decreased by 0.2%. At June 30,
2019, average occupancy stood at 95.6%, against
95.5% at the end of the first quarter (YE 2018:
96.3%).
Like-for-like rental growth of the shopping centres
came out at 0.8%, with the indexation at 1.7%.
THE NETHERLANDS
In the Netherlands, occupancy stood at 97.2% at the
end of the second quarter, against 97.0% at the
previous quarter (YE 2018: 97.1%). Leasing activity
and retailer expansion was the largest in the food
& convenience segment. Six supermarket contracts
were signed during the first half totaling 17,000 sqm
with rents at or above ERV levels.
The deal underpins
the consistent demand from food & grocery retailers,
and five of these transactions include an expansion.
Lease levels were in line with market rents and rental
contracts are typically for a ten-year’s term.
A package deal was agreed with H&M for all their
7 units in our centres, taking effect in 2020 and 2021.
Meanwhile, the mixed-use approach to replace
struggling fashion retailers is making progress.
A good first step was the lease of Basic Fit in
Presikhaaf, Arnhem. Wereldhave aims to further
increase the health sector presence in the centre.
Most of the bankruptcies that occurred during the
first half of the year have already been dealt with. All
Intertoys’ stores have been leased out again, and the
Op=Op Voordeelshop and Sissy Boy units in our
centres will be continued. Like-for-like rental growth
came out at a solid +1.5%, which is 0.2% above the
indexation. The bankruptcy of 6 CoolCat units had
limited impact on rental growth in the first half of the
year.
Commercialisation of these units is in progress.
Footfall in our Dutch centres saw a healthy increase,
particularly in De Koperwiek in Capelle aan den
IJssel (+9%) and the Pieter Vreedeplein in Tilburg
(+11%). Overall, footfall increased by 1.1%, which is
1.7% above the market average.
BELGIUM
In Belgium, occupancy of the shopping centres
improved from 95.8% at the end of Q1 to 96.2% at
June 30, 2019 (year-end 2018: 97.2%). The
occupancy of the Belgian offices improved from
90.6% at year-end 2018 to 92.6% at June 30, 2019.
Like-for-like rental growth during H1 2019 was 1.9%.
The bankruptcy of CoolCat impacted occupancy of
four units, but this was more than compensated by
the good progress in letting of the former Carrefour
unit in Belle-Île, Liège. The 5,500 sqm that were
vacated by the Carrefour hypermarket are now
almost fully let, with large new anchor tenants as
Action, Decathlon and Medi-Market.
Good progress
is also made in Shopping 1 in Genk. The occupancy
passed the 90% mark, but as the Carrefour is not yet
entirely relet, occupancy in Shopping 1 is likely to
drop in Q3 when the Carrefour unit will become
partially empty. Albert Heijn and Medi-Market
signed leases for the unit and The Fashion Store will
open a 1,000 sqm shop in Genk. Eyes+more signed
leases for the shopping centres in Genk, Nivelles and
Liège.
Footfall increased by 4.4%, whilst the market
average was 1.7% down. All shopping centres saw
a positive development of footfall, with the
exception of Belle-Île in Liege, where footfall
declined by 4.7%. This can be fully attributed to the
announcement by Carrefour to decrease its footprint
and by the subsequent works to change the lay-out
for new tenants.
FRANCE
In France, leasing was slow during the first half of
2019. Like-for-like rental growth in France during the
first half amounted to -1.5%. Tenant bankruptcies
were still relatively low, but retailers in several
segments continue to struggle.
Occupancy
decreased from 92.2% at the end of the first quarter
to 92.0% at June 30, 2019 (year-end 2018: 94.0%).
Package deals were signed with Promod (Docks
76 and Docks Vauban), Jules (Rivetoile, Docks
Vauban and Docks 76) and Histoire d’Or (Docks
76 and Saint Sever).
The Saint Sever shopping centre
in Rouen benefits from the opening of the Verrerie
project, a food hall in front of the cinema. Sales were
slow during the first quarter but picked up from May
onwards. The development of sales is positive in
Docks Vauban and Saint Sever and negative in the
other centres. Overall, sales levels are still some
3.6% below the previous year. H&M, JD Sports,
Stradivarius, Mango, KIABI and Promod are the top
performing retailers in Wereldhave’s French
portfolio.
Footfall in the French shopping centres decreased
by 0.4%. All centres recorded higher visitor
numbers, with the exception of Mériadeck and
Docks Vauban. Continuing Saturday yellow vest
protests caused a 8.6% drop in visitor numbers in
this centre. On the other hand, the Verrerie project
in Rouen boosted footfall in Saint Sever by 11%.