Shopping Centers Today International

MAR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 40 of 59

TIAA-CREF outlet fund that delivered a roughly 12 percent internal rate of re- turn between 2004 and 2013. Despite rising asset prices, however, Gunn foresees no consolidation ahead for operators. The top three play- ers, McArthurGlen (466,000 square meters across 20 outlets), Neinver (311,000 square meters across 15) and Value Retail (173,000 square meters across nine) take home about half the sales now, and they will remain domi- nant, Gunn says. As the map fills up, however, opera- tors are likely to be increasingly careful about their next moves. Losantos ex- pects that Neinver will be able to sustain sales growth of 6 to 10 percent over the next few years. "However, it is clear that we will have to be very selective about acquisitions and the locations we choose for new developments," Losantos said. "You've got to think much more about how you customize your outlet center development to fit the oppor- tunity that's in front of you," Gunn advised. "If there's already a McArthur- Glen on your doorstep, there's no point in trying to necessarily go down that same retail mix. But you might bring a different retail mix in. It may well be that you look to incorporate more leisure as well, to create a point of difference." One possibility could be to ex- pand the food-and-beverage offering, a step that some full-service centers have already taken. Though that might appear a sign of weakness for the format, Gunn argues that outlet shopping was always much more of a leisure activity than a trip to the local mall. The presence of high-end brands and higher-value architecture and the fact that many outlets are lo- cated near tourist destinations both help to put the shopper in a different frame of mind. "In some ways they're suspending their shopping skepticism when they go to an outlet center," Gunn said. "It's a different type of experience, be- cause they're a bit more in enjoyment mode, in pleasure mode, because it's the brands you want in a nice place that you quite like to go." SCT M a r c h 2 0 1 6 / S C T 41

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