MRM - 2018 Registration document
1
Information on M.R.M.’s activities
Presentation of the Company
Investment market
Holding tight! Retail parks still exist! The retail-park model is particularly resilient in normal conditions, but was particularly hit by social tensions towards the end of the year. According to figures published by PROCOS, medium spaces in out-of-town locations were most affected by falling sales (-10.1% in November). This trend was confirmed by QUANTAFLOW which reported -16% fewer visitors at retail parks in November. Yellow-jackets blockades at the entrances to retail areas had a major impact on footfall, especially in regions where the protests were the most persistent. Beyond this epiphenomenon, the retail-park model combines flexibility and resilience and remains a preferred target for retailers seeking to develop with low costs. As a result, prime rents for the latest-generation retail parks or leading out-of- town centres have remained steady in the small and medium space segment. In the large space segment (> 3,000m 2 ), the position is less clear as demand is more sporadic. The lack of activity in this segment is causing prolonged marketing lead times, which can sometimes penalise a whole site as an anchor tenant normally forms the basis for the site and acts as a draw to other retailers. Slowing centres… 22,000m 2 of additional space came onto the outlet centre market this year with one single completion: “The Village” by LA COMPAGNIE DE PHALSBOURG opened last spring in Villefontaine, near Lyon. This is slightly lower than in 2017 when there was a record level of completions (“McArthur Glen” Miramas, “Honfleur Normandy Outlet”), but within a market that is broadly limited, this opening represents a 4% increase in the volume of French stock which now stands at just over 500,000m 2 . Around 190,000m 2 of additional space is expected over the next 2 years, around 13% of which will be extensions to existing sites or those yet to be developed. Given the overall network distributed across a market with little room for expansion, new creations are likely to become increasingly rare, in favour of existing site consolidations. The success of these projects relies on being located close to concentrations of international tourists with high purchasing power, as well as the development of differentiated concepts with high-quality architecture.
Unexpected volume With an overall volume of €4.6 billion in investments in 2018, these results have drawn a line under the series of decreases recorded for retail assets over the last 3 years. This recovery was due to a particularly active H2 period that accounted for almost 60% of volume and 50% of transactions. Many of these transactions were finalised at the very end of the year, almost a third in December. The full-year investment volume therefore posted a 10% increase compared with 2017 and was 15% higher than the 10-year average. In a market that is still very tense, this level of performance was almost unhoped-for. The fragility of growth in rental incomes (with the exception of core product) is making retail assets less attractive to investors, particularly at a time when turnovers are not steadily rising. Retail market share stable Recent activity shows that retail isn’t fully out of favour, although investors are being more prudent. Within an active commercial real estate market (+12% from 2017 to 2018), activity in the retail segment has secured a stable market share of 15% since 2017. However, this market share has been affected by the decreases seen since 2015 and 2018 results are still lower than the 10-year average (20%). Large volumes are back Large volume transactions made a return to the market towards the end of the year whereas the small spaces was particularly active at the beginning of 2018. With 11 transactions for lot sizes over €100 million, this segment was back on form and matched the volume recorded in 2015 (56% of the overall volume in 2018). The majority of these were portfolio sales, including two lots of MONOPRIX stores which were sold by CASINO to GENERALI and AG2R for over €700 million. The large-volume segment was also driven by high-street retail disposals, the most iconic of which was the sale of 114 Avenue des Champs-Elysées to HINES/BVK for over €600 million last spring. The increase seen in this value segment left little room for the medium segment (€50 to €100 million) with just 6 transactions compared with 15 over the two previous years. Activity in this value segment mainly included retail parks and specialised medium-sized spaces (“Eden Park”, Cormontreuil retail area, JARDILAND stores) and was largely dominated by out-of- town assets.
20
M.R.M. 2018 REGISTRATION DOCUMENT
Made with FlippingBook - Online catalogs