Vastned sharpens strategy: expansion in premium cities
Target of 65% high street shops has been reached
Vastned, the listed European retail property fund focusing on venues for premium shopping, has reached its target of 65% high street shops, now the portfolio consists of 66% high street shops. Vastned is going to focus on expanding in premium cities: European cities where consumers prefer to go shopping and where national and international retailers prefer to have outlets.
The proportion of high street shops in the portfolio is currently 66%. Consequently, the target of 65% high street shops that Vastned set itself in September 2011, has been achieved. Vastned's new objective is to raise the rate of premium city high street shops to 75% of the total portfolio. This is the main ambition of the updated strategy. Currently approximately 45% of Vastned's portfolio is invested in high street shops in these 'premium cities'.
Premium cities are attractive shopping cities with positive demographic growth, strong purchasing power, a historic city centre, tourist appeal and the presence of national and international institutions and universities.
Vastned's acquisition policy is focused on premium cities in the countries where it already operates. The company aims to create clusters in these premium cities so as to be able to offer retailers a broad supply. Vastned already has a strong presence in premium cities.
The following cities are designated as premium cities:
|Netherlands||Amsterdam, Breda, Den Bosch, Den Haag, Maastricht en Utrecht|
|France||Bordeaux, Lille, Lyon, Nice/Cannes, Parijs en Toulouse|
|Belgium||Antwerpen, Brugge, Brussel en Gent|
|Spain||Barcelona, Bilbao, Madrid, Málaga, Sevilla en Valencia|
High street shops outperform other property investments
Vastned's results show that high street shops outperform the 'other investments' category, with higher occupancy rates, higher like-for-like rent growth and more stable values.
High street shops vs other investments
|High street||Other||High street||Other||High street||Other|
|Like-for-like rent growth||1.8%||0.2%||2.0%||(2.2)%||1.3%||(4.2)%|
* Most recent published results. Vastned will publish its FY 2013 results on 6 March 2014.
This underpins Vastned's high street strategy update, aiming to expand in premium cities. Quality remains the first principle of the strategy. Definitely also in the area of financing, where Vastned pursues a conservative financing policy. The proactive and hands-on approach within the organisation and the international account management will remain essential for successful implementation of the strategy.
Next to high street shops in premium cities, 25% of the portfolio will comprise investment properties that are not high street shops in premium cities, such as so-called baan-winkels in Belgium, well-located supermarkets and other high-quality retail locations with good and stable returns.
Main strategic objectives achieved
The proportion of high street shops in the portfolio is currently 66%. Consequently, the target of 65% high street shops that Vastned set itself in September 2011, has been achieved.
This year, Vastned has expanded its high street portfolio with acquisitions in the very best shopping streets in the ancient city centres of the following premium cities: Utrecht, Bruges, Bordeaux and Amsterdam for apox. € 100 milion in total.
Vastned also made good progress on the two oter pillars of its strategy - maintaining a conservative financing policy and anhancing the quality of the organisation with focus on the tenant. The loan-to-value is with 41.5% (as of end of June 2013), well within the 40%-45% range. The loan portfolio has been diversified by one the one hand spreading it more equally over several banks and on the other hand by raising the share of non-bank loans.
Furthermore, the reorganisation has clearly gained with new management in both France and the Netherlands, and the introduction of international account management, instilling a more proactive approach and a more hands-on mind set.
Due to the successful execution of our strategy, Vastned is now a focused high street property fund with a large number of the best locations in popular shopping streets. Having realised the main objectives we announced in September 2011, this is a logical time for us to update our strategy. Our focus on quality remains paramount. Our recent results, but certainly also our close contact with retailers and the observed changes in consumer behaviour, have convinced us that we must take into account not only the quality of the high streets themsselves, but also the cities where those streets are. This underlies our decision to expand in high street shops in the best shopping cities, or 'premium cities'. We set ourselves a concrete target: we want 75% of our portfolio to be high street shops in premium cities. Vastned will work towards this aim in its customary pragmatic and realistic way. Expansion in the premium cities will help raise the quality of the portfolio. We have the financial means within our current prudent financial structures to do so. This is a continuation of the existing financing strategy.
Vastned is a listed (NYSE Euronext Amsterdam) European retail property fund focusing on venues for premium shopping. Vastned invests in selected cities in Europe and Turkey, with a clear focus on the best retail property in the most popular shopping streets in the bigger cities (high streets). Vastned's tenants are strong and leading international and national retail brands. The property portfolio has a size of approximately € 1.5 billion.