Savills IM enters outlet sector with EUR300m acquisition
Savills Investment Management (Savills IM) has acquired two McArthurGlen designer outlet centres in France.
Located in Troyes and Roubaix, the assets were acquired from real estate funds managed by Ares Management Corporation, and from McArthurGlen, Europe’s leading designer outlet group, for a price approaching EUR 300 million.
The properties were acquired via the creation of a new OPPCI and on behalf of a club of investors. The investors comprise a number of institutions managed by a leading German Multi Manager in Real Estate and Alternatives investments based in downtown Frankfurt in Germany, as well as with commitments from existing Savills IM funds. McArthurGlen retains a stake in both properties and will remain the operational manager of the two designer outlets.
Debt was provided by Societe Generale and DWS while Savills IM was advised in Paris and London by Cushman & Wakefield, Simmons & Simmons, PwC and Savills Building Consultants.
Ian Jones, Director of Investment at Savills IM, says: “We are delighted to have completed the acquisition of these two exciting centres in an off-market transaction and, working with the operational manager McArthurGlen, we look forward to generating ongoing outperformance for our investors. In our view, as the importance of customer experience becomes more and more relevant, select acquisitions in the outlet sector offer opportunities to generate attractive distribution and IRR.”
“Furthermore, the deal is a testament to the strength and breadth of our operational platform as it required the ability to set up co-investment acquisition structures in the form of a new Spezialfond and OPPCI under challenging timescales, as well the placement of significant debt and ongoing fund management through teams across the UK, France and Germany. In addition, we were able to offer our in-house vehicles the ability to gain exposure to significant assets in this sector through the fund structure that would otherwise have been out of reach. We will look to source other opportunities in the sector.”
John Ruane, Partner in the Ares Real Estate Group, says: “We are very proud to have created significant value in the Troyes and Roubaix centres by growing the footfall, turnover and enhancing the shopper experience, and believe that their earlier-than-anticipated sale is a testament to the strength of these improved assets in such desirable markets.”
“We are pleased to have identified the attractive growth dynamics in the Outlet sector at a time when many other segments of the retail landscape face headwinds in today’s market. We would like to thank McArthurGlen for their partnership during our ownership and wish them further success with the centres.”
McArthurGlen introduced the concept of designer outlet shopping to France after it developed and opened Troyes in 1995, followed by Roubaix in 1999. The Group has successfully managed both centres since they opened, and they are now leading shopping destinations in the Northeastern region of France.
Christophe Deshayes, McArthurGlen’s Managing Director for the UK, France and Belgium, says: “Having managed the Troyes and Roubaix designer outlets for many years, we are delighted to be partnering with Savills IM. McArthurGlen is dedicated to creating value for our investors and our brand partners through targeted marketing, research, asset management and our strong international relationships with the world’s leading retailers. We constantly review centre, brand and market trends in our 24-centre portfolio to create the very best shopping experience for our shoppers, optimising the performance of the designer outlets under our management. We look forward to delivering continued growth for Troyes and Roubaix.”
Troyes is the largest designer outlet in France, with over 100 stores, 30,000 sq m of GLA and 1,700 parking spaces. Located 1.5 hours from Paris, the centre reaches a regional population of 7.8 million people, while local tourism attracts 2.5 million visitors to the area every year. The centre’s leading brand-mix includes Armani, Guess, Hugo Boss, Maje, Nike, Polo Ralph Lauren and Tommy Hilfiger.
Roubaix comprises 75 stores with 17,300 sq m of GLA, 1,500 parking spaces and serves a regional population of 11.5 million. Located just 15 minutes from the Belgium border, local tourism attracts a further four million visitors to the area each year. Leading brands include Adidas, Calvin Klein, Lacoste, Levi’s, Sandro and Swarovski.