First Half 2019
RETAIL
THE RETAIL PROPERTY MARKET
FRANCE THE RETAIL PROPERTY MARKET Key figures
PURCHASING POWER CONSUMER CONFIDENCE* INFLATION* HOTEL ARRIVALS*
+2.1% in 2019* 101 in June 2019 +1.3% in 2019 -1.5% in Q1 2019**
Record level since 2007 +14 points since January 2019 +2.1% in 2018 +6.3% in comparison with Q1 2017 Source: Banque de France Source: INSEE Source: Banque de France Source: Paris Tourism Office
*Annual increase / Forecast *Synthetic confidence index *Including energy and food *Total number, in Paris / **Annual increase
SPECIALISED RETAIL SALES* LUXURY STORES AMOUNTS INVESTED* PRIME RENT (Zone A)
+0.5% in H1 2019* 40 openings in 2019* €1.3 bn in H1 2019 €20,000/m²/year in H1 2019*
+24.6% for online sales 40 on average between 2014 and 2018 -21% year on year €20,000/m²/year in H1 2018 Source: Procos Source: Knight Frank Source: Knight Frank Source: Knight Frank
*Annual increase, in France *In Paris, data at end-June 2019 *In France, all asset types *Champs-Élysées
2 FIRST HALF OF 2019
ECONOMIC AND POLITICAL ENVIRONMENT THE RETAIL PROPERTY MARKET Economic and political environment
Robust Back to normal Economic indicators for France Household opinion Annual growth in %, unless otherwise noted Composite index – Data adjusted for seasonal and working-day variations
130 Indicator 2016 2017 2018 2019f 2020f 2021f
120 GDP 1.0 2.4 1.7 1.3 1.4 1.4
108 Inflation 0.3 1.2 2.1 1.3 1.3 1.4 110
Household consumption 1.6 1.6 0.9 1.1 1.7 1.5 100 101
Household income¹ 1.6 1.4 1.2 2.3 1.5 1.3 90 87 Unemployment (France) 10.1 9.4 9.1 8.6 8.3 8.1 80
¹Household gross disposable income / f: forecast
juil-07 juil-18
oct-04 oct-15
avr-10
juin-08 juin-19
mai-09
déc-02 nov-03 déc-13 nov-14
févr-01 févr-12
janv-02 janv-13
sept-05 sept-16
août-06 août-17
mars-00 mars-11
Source: Banque de France, macroeconomic forecasts Source: INSEE
• After peaking in 2017 and slowing in 2018, the French economy will continue to decline in 2019 because of a less favourable global economy. The low level of exports should be compensated by more robust domestic demand, even though consumer spending has been weak since the beginning of the year. • Although the French are currently putting their cash into savings products, they may gradually increase their consumer spending. Purchasing power has improved significantly, consumer confidence has risen and the yellow vest movement is running out of steam. 4 THE RETAIL PROPERTY MARKET Economic and political environment
A decline to put into perspective Few foreign visitors overall Change in the number of tourist arrivals in Paris hotels Hotel arrivals in Paris by nationality in Q1 2019 In millions Change in % from Q1 2018
UNITED STATES 301,819 visitors 3.75 +0.6% ▲ Q1 2019 1.8 UNITED KINGDOM 1.95 234,630 visitors +1.5% ▲
3.81 ITALY 134,686 visitors Q1 2018 1.73 +4.8% ▲ 2.08 GERMANY FRANCE 134,538 visitors 1,802,411 visitors +4.1% ▲ 3.53 -1.6% ▼ Q1 2017 1.74 CHINA 1.79 80,556 visitors -9.8% ▼
Total French Foreign …
TOTAL 1,945,852 visitors Source: Paris Tourism Office INTERNATIONAL -6.3% ▼ Source: Paris Tourism Office VISITORS
• The downward trend at the end of 2018 continued into Q1 2019, with Paris hotel arrivals down 1.5%. However, over two years the trend remains positive, up 6.3% from Q1 2017. • The uneven results since the beginning of 2019 are due to a decline in the number of foreign visitors. The yellow vest movement has had an impact on certain nationalities (e.g. the Chinese and Japanese). As the movement gradually slows, visitor numbers could revive in H2 2019. 5 FIRST HALF OF 2019
RETAILER STRATEGIES AND FORMATS THE RETAIL PROPERTY MARKET Retailer strategies and formats
Growth steady Significant potential Online sales revenue Share of online sales in total retail sales In France International examples
100 50% Spain 4.6 90 Italy 5.2
80 40% 34%
33% Austria 6.7 70
60 28% 30% France 8.8
25% 24%
50 22% 19% Sweden 9.5 40 20%
15% Germany 11.0
14%
14% 14%
13% 12% 30 12% United States 13.7 20 10% Netherlands 13.7
10
15.6 20.0 25.0 31.0 37.7 45.0 51.1 57.5 64.9 72.0 81.7 92.6 24.9
0 11.6 0% Denmark 14.7 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Q1) United Kingdom 17.0% Sales (€ bn) Annual growth (%)
Source: Fevad Source: Euromonitor
• After rising 13% in 2018, online sales increased 12% in France in Q1 2019, to €24.9 billion. The French market should be able to hold this pace over the months to come, crossing the symbolic threshold of €100 million by the end of 2019. • Online sales still have significant growth potential. Although they account for less than 10% of retail sales in France, in more mature markets (e.g. US, Netherlands, UK) they are in the 14–17% range. 7 THE RETAIL PROPERTY MARKET Retailer strategies and formats
From hidden costs of online sales…
Indexing and Delivery and reverse technology logistics
Every second lost for web page loading on a While free returns have become standard, they weigh retail website translates to a 7% decline in increasingly on the profitability of online retailers. In the sales. United States, the cost of returns will total $550 billion in 2020* (+75.2% over four years).
*Source: SEMRush, from analysis of 1,300 retail sites *Source: Statista
Social and Tax and regulatory environmental pressure pressure
Amazon was widely criticised for its practice of destroying On 11 July 2019, France officially adopted the GAFA defective products (or products returned by customers) tax, which taxes corporations on 3% of sales made in even when the products were still functional. A product France (online advertising, sale of data for advertising repairability index may be mandatory by 2021*. purposes, connecting of users via platforms).
*Bill concerning the fight against waste and the circular economy 8 THE RETAIL PROPERTY MARKET Retailer strategies and formats
…to advantages of a store network
-9.5% The loss of online traffic caused by the Emerging brands (i.e. brands less than ten years old) experience a 32% closing of a fashion retail store in a given rise in online traffic for each new physical store opened, compared with market. 27% for established brands.
Source: ICSC, “How Bricks Impact Clicks” Source: ICSC, “How Bricks Impact Clicks” 9 THE RETAIL PROPERTY MARKET Retailer strategies and formats
DNVB [Digital Native Vertical Brands], a fast-growing model
Brand 1st year of business Number of single-brand stores*
Jimmy Fairly 2011 32
Balibaris 2010 24
Le Slip Français 2011 14
Lunettes pour tous 2014 13
Faguo 2009 13
Sézane 2013 7
Sensee 2011 5
Bobbies 2010 4
Polette 2011 3
Miliboo 2007 2
Tediber 2015 1
Sources: France-dnvb.com, Knight Frank / *Excl. large distribution retailers and department stores, at end-June 2019
• The phenomenon is not new, but DNVB popularity continues to rise with the expansion of single-brand store networks. Some brands develop faster than others (e.g. Jimmy Fairly, Balibaris and Le Slip Français). • DNVB tend to take their own individual approach to retailing. They are distinguished by more direct relations with consumers, by an emphasis on the quality of customer service, and by a greater overlap between online retail and physical stores. 10 THE RETAIL PROPERTY MARKET Retailer strategies and formats
DNVB [Digital Native Vertical Brands], a fast-growing model
Favoured choices for openings DNVB stores by product category In France, out of total store openings of DNVB at end-June 2019* In France, for total store openings of DNVB at end-June 2019*
Type Location Out of total store openings of 1 1 8% DNVB
High streets Paris / Greater Paris region 8% 90% 61% 29% Out of total 46% 2 2 number of 52% DNVB
Shopping centres Regional cities 32% 14% 8% 28% 11%
3 3
Other** Other Fashion Eyewear Beauty/Cosmetics Other 2% 11%
Sources: France-dnvb.com, Knight Frank / *Excl. large distribution retailers Sources: France-dnvb.com, Knight Frank / *Excl. large distribution retailers and department and department stores / **Factory outlets, airports, train stations etc. stores
• DNVB choose to open mainly in high streets. They continue to prefer Paris (Marais, etc.) for their store openings, as well as the most attractive high streets of dynamic, mid-sized regional cities (Biarritz, Cannes, etc.). • The number of DNVB stores remains low. The stores serve mainly as a supplement to online activity and to raise the brand’s profile. Nevertheless, the DNVB physical network is growing along with new investments, rising popularity and the need to increase the number of 11 contact points with customers. THE RETAIL PROPERTY MARKET Retailer strategies and formats
233 new retailers since 2014 Focus on new foreign retailers
Annual change in number of new foreign retailers in France Number of stores by retailer Data at end-June 2019 Share in % of total openings of new retailers since 2014 in France
2014 37 100%
90% 2015 40 Others / Excl. Top 10 80% 43% Pittarosso, Five Guys, Deichmann, Old Wild West, Yamamay, etc. 70%
2016 46 60%
50% Others / Top 10 2017 40% 31% Flying Tiger, Sostrene Grene, 37 Rituals, Nyx, Muy Mucho, etc. 30%
20% 2018 45 10% 26%
0% 28 Moyenne 2014-2018
Source: Knight Frank Source: Knight Frank
• More than 40 new foreign retailers open in France each year. The contribution of these new foreign retailers is significant: the 233 foreign retailers which have entered the French market since 2014 (incl. 28 so far in 2019) have opened just over 1,000 stores. • However, few new retailers develop a meaningful network. The ten largest (in terms of number of stores) account for 57% of the total, incl. 26% for Basic-Fit alone. In France since 2014, the Dutch retailer has a network of 271 fitness clubs, incl. more than a hundred opened since the beginning of 2018. 12 THE RETAIL PROPERTY MARKET Retailer strategies and formats
Fashion, but not only… Focus on new foreign retailers
Breakdown by product category of new foreign retailers Top 3 by product category in France since 2014 Number of retailers Total number of stores
1 1 14% 10% 8% 13% 30% 7% 44% Fashion Sports/Leisure 10% 5% 8% 25% 15% 6% 5% 2 2 NUMBER OF TOTAL NUMBER NEW RETAILERS OF STORES Accessories Fashion
Fashion Beauty/Health Accessories Food/Restaurants 3 3 Sports/Leisure Household/Discounters Other Food/Restaurants Household/Discounters
Source: Knight Frank Source: Knight Frank
• Although fashion has accounted for 44% of all new foreign retailers since 2014, the sector totals only 25% of the 1,040 stores opened by new retailers over the past five years. The clothing sector’s problems may explain this under-representation. For large established brands the current trend is cost-cutting, with cautious development for the most recent arrivals. • The French retail market is now underpinned by a wide variety of activities. Among the fastest growing sectors are leisure, restaurants and interior décor. 13 THE RETAIL PROPERTY MARKET Retailer strategies and formats
Welcome to Paris! Focus on new foreign retailers
Location of first store of foreign retailers in France since 2014 Types of locations chosen by new foreign retailers for first opening in France since 2014
62% 70% Paris
21% 28% 5% 4% 10% Provinces Greater Paris Region (excl. Paris) High streets Shopping centres Retail warehousing Other (airports, railway stations, etc.)
Source: Knight Frank Source: Knight Frank
• 63% of new foreign retailers in France since 2014 chose Paris for their first opening. Three neighbourhoods account for more than half of the first openings on French high streets: Le Marais, the rue Saint-Honoré / place Vendôme sector, and Saint-Germain-des-Près. • Although the best locations on high streets are targeted for the high visibility they provide retailers, several new retailers have opted for shopping centres for their first store in France (Forum des Halles, Les 4 Temps, Cap 3000 etc.). 14 THE RETAIL PROPERTY MARKET Retailer strategies and formats
Examples of developing retailers In France, by activity
Sources: Knight Frank, press and retailers
FASHION/SPORTSWEAR RESTAURANTS FOOD OTHER
BESSON AU BUREAU ANGE ACTION
CHAUSSEA BISTRO RÉGENT BIO C BON BASIC FIT
DEICHMANN / SNIPES BURGER KING BIOCOOP CENTRAKOR
INTERSPORT CRÊP’EAT DAY BY DAY FITNESS PARK
JD SPORTS IT TRATTORIA GRAND FRAIS IXINA
JOTT LES BURGERS DE PAPA LA VIE CLAIRE JIMMY FAIRLY
KIABI O’TACOS LOUISE LUNETTES POUR TOUS
PRIMARK PRÊT À MANGER MARIE BLACHÈRE MAXI ZOO
PROJECT X VAPIANO NATURALIA MUY MUCHO
TAKKO STARBUCKS NATURÉO RITUALS
VALEGE STEAK ‘N SHAKE THIRIET TOM & CO
Retail warehousing Shopping centres High streets 15 FIRST HALF OF 2019
THE RENTAL MARKET HIGH STREETS THE RETAIL PROPERTY MARKET High streets | Paris
High-profile openings The high-street market in Paris
• Although it had steadily lost momentum, the yellow vest movement have already been confirmed for 2019 and 2020. Some of the most impacted retail activity in H1 2019, especially on high streets which significant are Eataly, which opened retail space of 2,400 m² in Le require significant security measures (e.g. rue du Faubourg Saint- Marais; Icicle, which will soon open at 35 avenue George V; and Kith, Honoré). In addition, the fall in reservations observed at the end of whose Paris flagship will open in 2020. 2018 was felt in Q1 2019, with an annual decline of 6.3% of foreign • Besides Eataly, highlights of H1 2019 included several high-profile tourists in Paris. Nonetheless, visitor numbers remain higher than those openings of large and very large spaces, such as Galeries Lafayette on for 2017. the Champs-Élysées and IKEA in the Madeleine sector. Despite these • Robust foreign visitor numbers continue to be vital to the luxury market. deals, the supply of large spaces has not diminished. On the Upscale hotels are still being opened on or near several major Right contrary, supply is boosted by redevelopment projects (Champs- Bank high streets (Costes expansion project, high-profile openings of Élysées), retailer difficulties and the desire of certain retailers to Cheval Blanc, So Sofitel and Bulgari hotels, etc.). The trend for luxury optimise their store network. retailers remains positive, with more than 40 openings already in • Supply is especially abundant on certain high streets (e.g. rue de 2019, compared with 48 for all of 2018. The place Vendôme / rue de Rivoli). However, the upcoming Nouvelle Samaritaine project as well as la Paix / rue Saint-Honoré sector accounts for 55% of all luxury store the negotiations under way for several large spaces (former H&M, openings expected in Paris in 2019, compared with 55% over the past former Gap, etc.) suggest that a comeback of this backbone of the five years. This high proportion reflects the success of rue Saint- Right Bank may be on the horizon. Honoré and the vitality of the watch–jewellery sector. Graff, Cartier, Qeelin, Gucci and Van Cleef & Arpels all plan either creations, • The outlook is not as clear for the principal Left Bank high streets, expansions or refurbishments. The Golden Triangle is also very which depend less on foreign tourism. Despite openings of a few major dynamic. Several large development projects are anticipated or have projects (Arije on rue de Rennes, Chaumet on boulevard Saint- been announced, such as the new Dior flagship opened at 127 avenue Germain, etc.), retailer demand on the Left Bank is not as strong as des Champs-Élysées. The Dior showcase at 30 avenue Montaigne is on the other side of the Seine. Rental values fall from time to time, slated to reopen with space expanded to nearly 3,000 m². as seen on rue de Rennes. • The appeal of the Paris market is also reflected by arrivals of new foreign brands and retailers, which are positioned for the most part in the mid-to-high range. After 26 new retailers in Paris in 2018, 25 17 THE RETAIL PROPERTY MARKET High streets | Paris
Examples of recent transactions and openings in Paris Source: Knight Frank
Retailer Address District Area (m²)
GIBERT JOSEPH 123 avenue de France Paris 13th 2,800
LACOSTE 50 avenue des Champs-Élysées Paris 8th 2,700
DIOR 127 avenue des Champs-Élysées Paris 8th 2,000
KITH Confidential Paris 8th Confidential
DIOR 261 rue Saint-Honoré Paris 1st 925
SOSTRENE GRENE 8-10 rue de Rivoli Paris 4th 500
DELVAUX 368 rue Saint-Honoré Paris 1st 400
XIAOMI 49 avenue de l’Opéra Paris 2nd 380
BURBERRY 378 rue Saint-Honoré Paris 1st 350
CELINE 4 rue Duphot Paris 1st 350
UNISPORT 4 rue Berger Paris 1st 300
DUBAIL* 71 avenue des Champs-Élysées Paris 8th 270
BALIBARIS 65 rue de Passy Paris 16th 210
WEEKDAY 8 rue de Marseille Paris 10th 200
*Extension 18 THE RETAIL PROPERTY MARKET High streets | Paris
Downward pressure on Paris Left Bank Prime rental values, in Paris, in €/sq. m/year Zone A*
Source: Knight Frank Changes in prime rental values Street or retail area District Rent Rent Trend Between 2006 and 2019 (H1), on some as at H1 2018 as at H2 2019 Parisian streets, in €/sq. m/year Zone A*
th Avenue des Champs-Élysées Paris 8 20,000 20,000 ➔ 25,000
Avenue Montaigne Paris 8th 15,000 15,000 ➔ 20,000 Rue du Faubourg Saint-Honoré Paris 8th 15,000 15,000 ➔ 15,000 Rue Saint-Honoré Paris 1st 12,000 13,000
10,000 Boulevard Haussmann Paris 8th / 9th 6,000 6,000 ➔
Marais Paris 3rd / 4th 5,000 5,000 ➔ 5,000
th th
Sèvres / Saint-Germain Paris 6 / 7 5,000 4,000 -
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Capucines / Madeleine Paris 1st / 2nd / 8th / 9th 4,000 4,000 ➔ 2006 2019 H1 2019 Champs-Elysees Rue de Rivoli Paris 1st / 4th 4,000 3,500 Avenue Montaigne Rue Saint-Honoré Rue de Rennes Paris 6th 4,000 3,000 Rue des Francs-Bourgeois Bd Saint-Germain / Rue de Sèvres Rue de Passy Paris 16th 3,000 3,000 ➔ Source: Knight Frank
*Rental value: decapitalised rent + assignment (leasehold/business) 19 THE RETAIL PROPERTY MARKET High streets | Paris
A highly concentrated market Examples of recent and future projects 22
Flagships
1 GALERIES LAFAYETTE 2 DIOR 17
3 NIKE 4 ADIDAS 24 14 LACOSTE SAINT LAURENT 12 5 6 2 5 1 9 3 4 10 7 GRAFF 8 BALMAIN 8 2 2 7 21 6 9 IKEA 10 BURBERRY 26 25 11 11 VICTORIA’S SECRET 12 ETAM / UNDIZ 13 20 13 EATALY 14 ZARA
23 Railway stations 1
15 GARE MONTPARNASSE 16 GARE D’AUSTERLITZ 16 15 17 GARE DU NORD 19
Other 18
18 ITALIK (EXT. ITALIE 2) 19 ATELIERS GAITÉ
20 SAMARITAINE / DFS 21 POSTE DU LOUVRE International Tourist Zones 22 MY CARDINET 23 MORLAND MIXITÉ CAPITALE
24 MK2 CHAMPS-ÉLYSÉES 25 FONDATION PINAULT
26 FONDATION CARTIER Source: Knight Frank THE RETAIL PROPERTY MARKET High streets | Provinces
Mixed results The high-street market in the provinces
• Although momentum of the yellow vest movement has slowed in recent • The boom of food shops and restaurants has also persisted. months, other problems have appeared in the provinces in 2019. In Numerous new restaurants have opened or are in the planning stages, mid-sized cities already hurt by economic slowdown, demonstration- incl. several in Lyon on rue de la République (IT Trattoria, Steak related violence has further weakened retailers because of the cost of n’ Shake, Les Burgers de Papa, etc.). The many examples of French damage and the loss of foot traffic. Clashes have also penalised retail and foreign chains developing in city centres include Big Fernand in business in provincial capitals such as Bordeaux, where sales declined Brest, Five Guys in Nancy and Clermont-Ferrand, Vapiano in Nancy 30–60% on demonstration routes, and Nantes, where FNAC and and Lille, Starbucks in Toulouse, etc. Galeries Lafayette estimate a total loss of nearly one million customers • The expansion of “emerging” DNVB, already well established in since November 2018. Paris, also benefits other regions of France, particularly large cities but • The scale of the disturbances worsened problems already experienced also smaller ones with significant tourist activity and high purchasing by both independent and large retailers, which may accelerate their power (Jimmy Fairly in Strasbourg and Toulouse, Lunettes pour Tous in cost-cutting operations. In recent months, several significant closings Nice, Balibaris in Aix-en-Provence and Cannes, etc.). have been either finalised or announced in the fashion sector in Metz • At the same time, the trend towards smaller or less attractive cities (Kiabi and New Yorker on rue Serpenoise), Nancy (H&M on rue Saint- is as strong as ever. On 19 March 2019, Jacqueline Gourault, Minister Jean) and Lille, where H&M and Zara closed their stores on rue de of Territorial Cohesion, announced the cities awarded the “Reinvent Our Béthune. City Centres” expression of interest at the second “City Centre • At the same time, Zara opened a flagship of nearly 4,000 m² on rue de Action” national meeting. The objective is to renovate an iconic city- la Bourse, while H&M continued to expand its network of stores in centre site, and to encourage innovative urban projects. Of the 112 mid- secondary cities (e.g. a store opened in June 2019 in the city centre of sized city candidates, 55 will be helped starting in 2019 to organise calls Agen). for tender, while the 57 others will be aided specifically for their own projects. • Besides the fashion sector, sporting goods (Snipes at 45 rue Saint- Ferréol in Marseille), health and beauty, and interior décor have created demand for high streets and shopping centres.
21 THE RETAIL PROPERTY MARKET High streets | Provinces
Examples of openings and recent projects in the regions
Cities in the Top 10 French urban areas LILLE Zara & Zara Home / Stella Forest / Vapiano Anthony Garçon Other cities Le 31 RENNES xxx Examples of store openings Palais du Commerce
Examples of new/redevelopment STRASBOURG xxx projects in city centres Primark / Copper Branch Faguo / Jimmy Fairly NANCY Five Guys Nespresso / Starbucks NANTES Bistrot Régent Uniqlo / Maxi Bazar Biloba Plaza LYON Halles Alstom Yaya / Ralph Lauren / Ysé Made.com / Eric Bompard King Jouet / Steak ‘n Shake
BORDEAUX Aesop / Bexley NICE Bordeaux Saint-Jean Lunettes pour Tous / Boggi Bolia.com /Copper Branch Gare du Sud Iconic
CANNES TOULOUSE AIX / Dolce & Gabbana / Lorena Antoniazzi Primark / Uniqlo MARSEILLE Sessun / Balibaris Tiger / Dr Martens Le Slip français Sources: Knight Frank, press and retailers Balibaris / Snipes Jimmy Fairly / Starbucks Mad Vintage 42 Saint-Ferréol 22 THE RETAIL PROPERTY MARKET High streets | Provinces
Prime rental values In the regions, end Q2 2019, in €/sq. m/year Zone A*
Source: Knight Frank
Lyon 2,200 / 2,500
Bordeaux 2,200 / 2,400
Nice 2,200 / 2,400
Lille 1,800 / 2,000
Toulouse 1,800 / 2,000
Strasbourg 1,700 / 1,900
Marseille 1,400 / 1,600
Nantes 1,400 / 1,600
€ 0 € 500 € 1,000 € 1,500 € 2,000 € 2,500 € 3,000
*Rental value: decapitalised rent + assignment (leasehold/business) 23 FIRST HALF OF 2019
FOCUS ON THE PARIS LUXURY MARKET 100 150 200 250 300 Sources: Sources: & Bain Sales Acceleration Focus on the Paris THE 50 • • 0 tourism Excluding Asia, results are inconsistent and depend on the geographic area. In Europe, sales remain positive, with one groups confirm this vitality. Another major factor is Chinese consumers, which accountcould for nearlyhalf of the global ma After slowing slightly in 2018, 2006
150 8% worldwide RETAIL 2007 161 7% . However, changes in the political and social environment continue will to be a key factor (Brexit, yellowjacket movement, - Company third currently. 2008 159 -1% 2009 of Sales Sales (€bn) 147 -8% / luxury Altagamma 2010 167 14% PROPERTY luxury 2011
186 11% goods 2012 207 11% luxurysales should accelerate in 2019 market 2013 212 2% 2014 219 3% Annual growth(%) 2015
245 12% MARKET 2016 244 0% 2017 254 4% 2018 260 2% 2019f 271-276 4-6% -20% -10% 0% 10% 20% 30% 40% 50% , rising between 4% and 8% for the year. Recent results of large luxury
6% 10% 17% Americas Europe 12% * Annual growth in sales in Q1 2019 (%) Sources: Sources: Hermès, / LVMH, *USA KeringLVMH for
boosted boosted bygrowth in international 7% 8% 17% Asia Asia
rke 11% t by2025, compared Total Asia ( driving
etc 14% excl .).
. Japan) . 7% 30% growth
18% 25 THE RETAIL PROPERTY MARKET Focus on the Paris luxury market
Luxury goes omnichannel Global luxury market by sales format
There are plenty of touch points, 2018 29% 22% 20% 12% 6% 10% so we adapt tools and processes to maintain consistency in marketing, but also to inject personalization
2025f 25% 17% 13% 13% 7% 25% and emotions into each contact point, physical or digital.
Jean-François Palus, Group Managing Director, Kering 0% 20% 40% 60% 80% 100%
Source: Kering, Capital Markets Day 2019
Single-brand stores Specialised stores Department stores Outlets Airport stores Online sales
Source: Bain & Company
• Boosted by growth in the Asian market and by the consumer appetite of younger generations, online sales accounted for nearly 10% of total luxury sales worldwide in 2018 (+22% year on year). This share could total as much as 25% in 2025. • Although large luxury groups have increased their investments in online sales, they are not neglecting other sales channels. More mature brands tend to handle directly-operated stores, which allows them to control their image and the buying experience of customers. 26 THE RETAIL PROPERTY MARKET Focus on the Paris luxury market
The same bases as in 2018
Change in the number of luxury store openings Openings by type In Paris Share in % of total openings in Paris
Average 2014-2018 100% 12% 90% 19% 10% 40 80% 16% 2016 70% 30% 60% 51 17% 2017 50% 40% 26 30% 48% 48% 2018 20% 48 10% 0% 2019* Average 2014-2018 2019
40 Creation Extension / Refurbishment Relocation Temporary store
Source: Knight Frank / *Data at end-June 2019 Source: Knight Frank
• Over forty luxury stores are slated to open in Paris in 2019. Some have already been completed, such as Saint Laurent, Céline and Graff in the rue Saint-Honoré sector. • Work on existing sites remains a significant concern. Extensions and refurbishments account for the largest share of openings (30% in 2019, compared with 17% on average between 2014 and 2018), reflecting the desire of large groups for bigger, more beautiful spaces. Major development projects over the next two years include the 425 m² extension of the Cartier store at 11 rue de la Paix, and the 1900 m² extension of the Dior flagship at 30 avenue Montaigne. 27 THE RETAIL PROPERTY MARKET Focus on the Paris luxury market
Examples of recent / upcoming openings
# Retailer Address District
1 Arije 41 rue de Rennes Paris 6th
2 Balmain 374 rue Saint-Honoré Paris 1st
3 Buccellati 239 rue Saint-Honoré Paris 1st 9 4 Cartier* 11 rue de la Paix Paris 2nd 10
st 4 5 Céline 4 rue Duphot Paris 1 5 1213 2 6 Chaumet 165 boulevard Saint-Germain Paris 6th 8 7 15 3 11 14 7 Delvaux 368 rue Saint-Honoré Paris 1st
8 Dior* 30 avenue Montaigne Paris 8th
9 Dior 127 avenue des Champs-Élysées Paris 8th
10 Dubail* 71 avenue des Champs-Élysées Paris 8th
11 Graff 237 rue Saint-Honoré Paris 1st 6 1 12 Gucci 16 place Vendôme Paris 1st
13 Qeelin 26 place Vendôme Paris 1st
14 Saint Laurent 213 rue Saint-Honoré Paris 1st
15 Van Cleef & Arpels* 20 place Vendôme Paris 1st
*Extension / Source: Knight Frank 28 THE RETAIL PROPERTY MARKET Focus on the Paris luxury market
The year of watches–jewellery
Openings by product category* Openings by group Top 3 of luxury store openings in Paris Luxury stores in Paris, in 2019
2014-2018 2019 23% LVMH 1 45% 1 50%
Fashion Watches-Jewellery Kering
48% Richemont 2 31% 2 38% 8% Chanel Watches-Jewellery Fashion
Other 3 7% 3 8% 13% Cosmetics Cosmetics 8%
Source: Knight Frank / *Top three categories Source: Knight Frank
• Of the openings planned for Paris in 2019, the dominant sector will be watches–jewellery. Unsurprisingly these are concentrated around the Vendôme / Saint-Honoré district (Graff, Buccellati, Gucci, etc.). A few significant projects are also planned for other neighbourhoods in Paris (Chaumet and Arije on the Left Bank, the Dubail extension on the Champs-Élysées, etc.). • LVMH Group remains the most active player in the Paris luxury market, with nine openings in 2019 (Dior on the Champs-Élysées, Céline on rue Duphot, etc.). LVMH is ahead of Richemont, whose transactions (whether recent or to come) concern mainly refurbishment and extension projects for Cartier and Van Cleef & Arpels in the place Vendôme / rue de la Paix sector. 29 THE RETAIL PROPERTY MARKET Focus on the Paris luxury market
Saint-Honoré / Paix / Vendôme: 55% of openings!
Breakdown of openings by high street Share in % of total openings in Paris Rue Saint-Honoré: 53 openings since 2015, of which 45% are creations Other 4% 18%
Marais 2% 7% 2011 2015 2016 2017 2018 2019 Montaigne 5% 11%
Sèvres / Saint-Germain 8% 8% 2019 2014-2018
Champs-Elysées 8% 5% 8% Faubourg Saint-Honoré Grand Mulberry Dior Parfums Dior Chanel Graff 10% opening of Tory Burch Fendi Vuitton Pucci Saint Laurent George V / François 1er 10% Mandarin Missoni Paul Smith Stella Marni Buccellati 9% Oriental La Prairie Marc Jacobs McCartney Pomellato Delvaux Alexander Brioni, David Morris Billionaire Louboutin Vendôme / Paix 25% 11% McQueen, Lyubov, Christofle, Moschino, Balmain, etc. etc. etc. etc. etc. Rue Saint-Honoré 30% 21%
Source: Knight Frank Source: Knight Frank
• The sector comprising rue Saint-Honoré, place Vendôme and rue de la Paix accounts for 55% of all luxury store openings in Paris in 2019 (compared with 32% between 2014 and 2018). A few high-profile openings have been completed or are planned in the Golden Triangle (e.g. Dior at 127 avenue des Champs-Élysées). • The trend of focusing large luxury groups on the Right Bank’s most prestigious high streets explains the limited number of openings on other high streets. Occasionally there are a few high-profile projects and openings, including a very small number of creations (Arige at 41 rue de Rennes, etc.). 30 THE RETAIL PROPERTY MARKET Focus on the Paris luxury market
Luxury hotels in Paris Recent and future openings
Source: Knight Frank
Recent openings
10 Hôtel Fauchon Hôtel de Berri La Clef Champs-Élysées 2 13 1 Paris 8th 2 Paris 8th 3 Paris 8th Creation: 2018 Creation: 2018 Creation: 2018 3 1 12 9 5
Lutétia Grand Powers Hôtel du Louvre 17 Paris 6th 5 Paris 8th st 4 6 Paris 1 15 Refurbishment: 2018 Refurbishment: 2019 Refurbishment: 2019 16 6 14 Future openings 11
8 Hôtel du Génie / Autograph Collection JK Place 7 Paris 7th 11 Paris 7th 7 Creation: 2019 Creation: 2019
Cheval Blanc Samaritaine Kimpton Paris Opéra Goralska 8 Paris 1st 12 Paris 2nd 15 Paris 1st 4 Creation: 2020 Creation: 2020 Creation: 2020
Bulgari Paris Maison Albar Opéra Sinner / Evok 9 Paris 8th 13 Paris 9th 16 Paris 4th Creation: 2020 Creation: 2019 Creation: 2019
So Sofitel Champs-Élysées Poste du Louvre Costes 10 Paris 8th 14 Paris 1st 17 Paris 1st Création: 2022 Creation: 2020 Extension: 2019 Creation
Refurbishment / Extension 31 FIRST HALF OF 2019
THE RENTAL MARKET RETAIL COMPLEXES THE RETAIL PROPERTY MARKET Shopping centres
Cards redistributed The French shopping centre market
• Although visitor numbers are slightly higher than last year’s (+1.9% • The ecological crisis, weakening purchasing power, an aging in Q2 2019*), performances of shopping centres vary widely, depending population, the digital revolution: these factors and more are affecting on the format. Shopping malls have been weakened. Their results are demand and changing the shopping centre market. The recent driven by hypermarkets, which themselves have been hurt by a decline change in tenant mix illustrates how societal concerns have already in foot traffic. Moreover, the most recent Procos study confirms the been taken into account by landlords and retailers, as seen in the problems of city-centre shopping centres, which were penalised by development of higher quality restaurants, concept stores for health and the yellow vest movement and by the loss of some of their customers to well-being, leisure activities etc. New hybrid and collaborative models peripheral shopping zones. are also being tested to replace formats which have fallen out of favour. Examples include shop-in-shops at Casino hypermarkets (e.g. • Vacancy rates are in acceptable ranges in the largest shopping centres, Cdiscount and Le Drugstore Parisien or external partners such as Maty, and property-investment firms show solid results. These centres are etc.). preferred by international retailers, both for their high flow of customers and the visibility the centres provide. Sporting goods and fast-fashion • Modification of shopping centres also requires architectural work on companies continue to open large stores in these centres, but other existing centres. Extension, refurbishment and redevelopment will sectors are also active in all types of spaces (Lego, Nespresso, Five be the key words from the second half of 2019 to the end of 2021, with Guys, etc.). In addition, the largest centres capture the demand of new development projects such as La Part-Dieu in Lyon, Italik and Les foreign retailers, such as Victoria’s Secret in Forum des Halles, the Ateliers Gaité in Paris, Les Trois Fontaines in Cergy and Polygone in announcement by Xiaomi of its first opening in the provinces (at La Part- Montpellier. Dieu), and the upcoming arrival of Normal at Passage du Havre and • Projects designed to revive flagging assets are also rising, along with Belle-Epine. market opportunities. This trend is illustrated by several notable success • Outside the prime segment, certain retailers are taking advantage of stories, such as the project to revive the Domus shopping centre in beneficial leasing terms to expand their network. Two Dutch retailers Rosny-sous-Bois. Other repositioning deals are under way, whose are especially active. Basic-Fit has replaced La Grande Récré in Les effects will be measurable in the months to come. Examples are the Jeu Halles du Beffroi in Amiens, and plans to open in Eléis in Cherbourg. de Paume in Beauvais, acquired by Foncière Immobilière Bordelaise in Action has opened in Argenteuil (Côté Seine) and Toulon (Centre 2018, and the Galerie des Tanneurs in Lille, acquired the same year by Mayol), and plans to open in Metz (Saint-Jacques). a Lyon-based investor.
33 *Source: CNCC THE RETAIL PROPERTY MARKET Shopping centres
Examples of significant shopping centre projects 2019-2020
Source: Knight Frank
Centre Town Type Area (m²)
Lillenium Lille (59) Creation 56,300
Open Sky Plaisir (78) Creation 37,000
Cap 3000 Saint-Laurent-du-Var (06) Extension / Redevelopment 32,500
Cap 3000, Saint-Laurent-du-Var (06) La Part-Dieu Lyon (69) Extension / Redevelopment 30,600
Les Ateliers Gaité Paris (75014) Extension / Redevelopment 27,800
Vélizy 2 Vélizy-Villacoublay (78) Extension / Redevelopment 19,600
Nice Lingostière Nice (06) Extension / Redevelopment 12,000
Créteil Soleil Créteil (94) Extension / Redevelopment 11,600 Les Ateliers Gaité, Paris 14th
Saint-Sever Rouen (76) Extension / Redevelopment 7,000
Les Berges de l’Ourcq Les Pavillons-sous-Bois (93) Creation 6,800
Italik (Italie 2) Paris (75013) Extension / Redevelopment 6,400
Rennes-Cesson Cesson-Sévigné (35) Extension / Redevelopment 6,000
Italik, Paris 13th 34 THE RETAIL PROPERTY MARKET Retail parks
Some good, some not so good… The French retail warehousing market
• The year 2018 ended on a negative note because of the yellow vest Beaumanoir Group is using this type of combined development to open movement and retail losses. Although tensions had subsided, new its Vibs multi-stores, while Fnac/Darty is growing across France actions to block retail zones were carried out in the first half. through dynamic use of local franchises. Moreover, last year’s results were tarnished by poor performances of • Other business segments continue to grow, such as sporting goods some of the most prevalent activities on the outskirts, i.e. garden-supply (sportswear, fitness), restaurants and food shops. For example, organic and pet stores (sales down 1.5% in 2018) and furniture stores (–2.7%). food is growing rapidly, underpinned by the expansion of existing The furniture sector has since bounced back, rising 4.8% in the first five retailers in peripheral zones and by the testing of formats outside city months of 2019. centres in order to target new customers (Naturalia in Brétigny-sur- • While the market seems to be better overall, this improvement should Orge). be taken with a grain of salt. Difficulties increased for several large • While the growth potential of new retail parks remains strong, there retailers in peripheral zones (e.g. Vivarte Group, which is now unable were few completions in H1 2019 (Saint-Berthevin, near Laval, etc.). to reimburse debt). In recent months Chantemur was liquidated, while A few large projects are expected by the end of the year, such as Kingfisher Group closed several Castorama and Brico Dépôt stores the Shopping Promenade d’Arles and Eden 2 in Servon (Seine-et- across France. In addition, Conforama announced a drastic Marne). restructuring plan involving the closing of more than 40 Conforama and Maison Dépôt stores. • Just as for shopping centres, though to a lesser degree, the emphasis is increasingly on the redevelopment of existing retail zones, as • These challenges are in stark contrast with the ongoing expansion of seen in projects carried out by Frey in Strasbourg and Toulouse. A sign large discount retailers such as Action. Other include Stokomani, which of the times, a second working group has met as part of the call for recently opened its hundredth store in France, and Centrakor, which projects in the “Rethinking Retail in Peripheral Zones” launched in now has more than 400 stores and has begun to expand internationally. December 2017 by the Ministry of Territorial Cohesion. The goal is to Gifi is also opening stores, mainly through the integration of Tati stores “enhance the awareness, methods and operational tools for the acquired in 2017. modernisation of retail zones in the inner suburbs”. • In other sectors, groups are using synergies between retailers to lower costs, adapt to new consumer habits and boost growth.
35 THE RETAIL PROPERTY MARKET Retail parks
Examples of significant retail park projects 2019-2020
Source: Knight Frank
Centre Town Type Area (m²)
Steel Saint-Étienne (42) Creation 70,000
Coeur d’Alsace Shopping Promenade Vendenheim (67) Redevelopment 70,000
Puisoz Vénissieux (69) Creation 50,000
Les Promenades de Brétigny Brétigny-sur-Orge (91) Creation 50,000 Steel, Saint-Etienne (42)
Woodshop Cesson (77) Redevelopment 42,000
Open Sky Buchelay (78) Redevelopment 40,000
Shopping Promenade Claye-Souilly (77) Creation 40,000
Eden (phase 2) Servon (77) Creation 33,000
Shopping Promenade Arles (13) Creation 19,000 Shopping Promenade Arles, Arles (13)
Les Montagnes Ouest (phase 2) Champniers (16) Extension 13,500
Pop’A Lescure Lescure d’Albigeois (81) Creation 12,250
The Snow Sallanches (74) Creation 12,000
Pop’A Autun Autun (71) Creation 11,700
La Colleraye Savenay (44) Extension 9,000 The Snow, Sallanches (74) 36 THE RETAIL PROPERTY MARKET Factory outlets
More than 100,000 m² since 2017 The French factory outlet market
• Several large projects have been opened over the • In all, factory outlets opened in France between Change in openings in France past three years. In 2017 there was Miramas’ the beginning of 2017 and the end of 2019 In m², total volume per year* McArthurGlen (25,000 m²) and the Honfleur totalled nearly 100,000 m², with an existing Normandy Outlet (12,700 m²). Highlights of 2018 supply of more than 500,000 m² mainly in included the opening of The Village (25,000 m²), northern France. 50000 developed by Compagnie de Phalsbourg in • Numerous projects are planned for 2020 and 45000 Villefontaine, not far from Lyon. The Village had beyond, such as 20,000 m² developed by Neinver in nearly four million visitors in its first year. Now it is 40000 Châtillon-en-Michaille, near the Swiss border (Alpes the turn of Île-de-France to make headlines in 2019, The Style Outlets), and 18,000 m² for McArthurGlen with the impending opening of Paddock Paris 35000 in Douains, near Evreux, for which construction was (21,000 m²) in Romainville. The new facility, recently begun. Both will be opened in 2021. 30000 developed by Fiminco (Adidas, Reebok, Etam/Undiz, Delsey, etc.), features a food hall of • The format’s popularity, the need for retailers to 25000 clear their stock, and the growth potential of certain 800 m² and 75 stores. Galeries Lafayette will open 20000 1,200 m² there, the latest addition to their outlet regions still relatively undeveloped leave little doubt network after openings in Saint-Denis, Vélizy- that there are more deals in the pipeline. Yet 15000 Villacoublay and Villefontaine (The Village). uncertainties persist. In addition to the need to reach a certain level of pre-lettings, legal recourse is 10000 • Factory outlets continue to sprout up across the increasingly frequent as supply grows. After the Paris region, with several large sites in the northern 5000 factory outlet in Sorigny (Indre-et-Loire) at the end of suburbs (Marques Avenue in Île-Saint-Denis), the 2018, authorisation for the Village Outlet in Coutras, 0 southern suburbs (–X% in Massy, Marques Avenue
outside Bordeaux, was also refused in May 2019,
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 in Corbeil-Essonnes), the western suburbs (Marques 2011 with an unfavourable decision by the CNAC. Avenue A13, One Nation Paris, etc.) and the eastern Source: Knight Frank suburbs (La Vallée Village in Marne-la-Vallée). *Definite and possible operations
37 THE RETAIL PROPERTY MARKET Factory outlets
Examples of significant factory outlet openings and projects Source: Knight Frank
Openings 2011-2018
Year Centre Town Type Area (m²)
2011 Nailloux Outlet Village Nailloux (31) Creation 24,800
2012 The Style Outlets Roppenheim (67) Creation 27,300
2013 One Nation Paris Les-Clayes-sous-Bois (78) Creation 24,000
2015 Marques Avenue A13 Aubergenville (78) Redevelopment 13,700
2017 Honfleur Normandy Outlet Honfleur Creation 12,700
2017 McArthurGlen Provence Miramas Creation 25,000
2018 The Village Villefontaine (38) Creation 25,000
Future projects
Year Centre Town Type Area (m²)
2019 Viaduc Village (Phase 1) La Cavalerie (12) Creation 7,500
2019 Paddock Romainville (93) Creation 20,000
2021 Alpes The Style Outlets Châtillon-en-Michaille (01) Creation 19,000
2021 McArthurGlen Douains (27) Creation 18,000
2021 Designer Outlet l’Escale Hautmont (59) Creation 10,500
> 2021 Village de marques Coutras (33) Creation 19,200 38 FIRST HALF OF 2019
THE INVESTMENT MARKET THE RETAIL PROPERTY MARKET The investment market
H1 2019 H1 2018 Annual trend
Retail investment volume in France €1.3 bn €1.6 bn
Share of retail* 11% 13%
Number of transactions > €100 million 1 4
Share of Ile-de-France** 32% 55%
Share of foreign investors** 45% 56%
Prime yield | High streets 2.90% 2.75%
Prime yield | Shopping centres 4.25% 4.25% ➔
Prime yield | Retail parks 5.00% 5.00% ➔
Source: Knight Frank
*On total investment in France,all asset types (excl. non divisible portfolios) ** On total retail investment in France 40 THE RETAIL PROPERTY MARKET The investment market
A sluggish first half Change in retail investment volumes In France
Source: Knight Frank
€ 8,000 35%
€ 7,000 30%
€ 6,000 25%
€ 5,000 € 4,700 20% € 4,000 16% 15% € 3,000 11% -21% 10% Year on year € 2,000 € 1,275 € 1,000 5%
€ 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1 2019 Retail investment volume France Retail share (%)
• Running counter to the office trend, amounts invested in the French retail market decreased by 24% between the 1st and 2nd quarters of 2019, from 725 to 550 million euros. • Since January, the retail sector saw investment volumes of €1.3 billion, a 21% decrease compared to the first half of 2018, which benefited from the sale to BVK of the new Apple Store on the Champs-Elysées for almost €600 million. 41 THE RETAIL PROPERTY MARKET The investment market
Significant transactions in 2019 Source: Knight Frank
Address / Asset Type City Seller Purchaser Price
Casino portfolio SC France Casino Fortress Investment Group
Portfolio RW / SC / HS France Meyer Bergman Paref
Portfolio RW France - Valimmo
C&A | Tour CIT Montparnasse SC Paris 15th Redevco NRS Invest
Canyon portfolio SC/ RW France Ceetrus Othrys AM
6 rue de Sèvres HS Paris 6th Société Générale Thor Equities
Portfolio RW Aisne - Patrimoine & Commerce
Cora Creil Saint-Maximin SC Saint-Maximin (60) Klepierre Galimmo
Chamblyrama RW Chambly (60) - Altixia Reim
Éclats portfolio RW Greater Paris region LIM Groupe Duval
Portfolio HS Greater Paris region Financière JL Groupama Gan Reim
Atlas portfolio HS Paris Louvre Capital AEW Ciloger
< €50M €50-100M €100-200M > €200M NB: HS High street, RW Retail warehousing, SC Shopping centre 42 THE RETAIL PROPERTY MARKET The investment market
Gradual rebalancing Breakdown of retail investment volume by geography
Source: Knight Frank Significant deals in 2019
Province Paris / IDF
H1 2019
20 20
Parisian portfolio
1%
assets
Casino Casino portfolio
3% 25% C&A C&A Montparnasse
Paris assets
42% 48% Greater Paris region - Excl. Paris portfolio H1 2018 retail Provinces 7% 27 Indivisible portfolios
67% Sèvresde rue6
7%
warehousing
portfolio Retail
Source: Knight Frank
• After having largely dominated activity in the first quarter (90% of the amounts committed in France), the share of regions is lower at the end of the first half of 2019 but remains very high (67%). • After a sluggish start to the year, Paris saw its share increase to 25% of amounts invested in retail (after 6% in the first quarter) with a few transactions such as Redevco's sale of the C&A store in Montparnasse and Thor Equities' acquisition of 6 rue de Sèvres for nearly €50 million.
43 THE RETAIL PROPERTY MARKET The investment market
High streets regain ground Nevertheless, for the retail park market, mid-year Breakdown of retail investment volume by asset type results are mixed. In France
Source: Knight Frank
100% 11% 90%
80% 36% 45% 29% 70%
60%
50% 26% 23% 40%
30% 60%
20% 38% 45% 32% Share of shopping centres 10% in the first half of 2019
0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1 2019
High streets Retail warehousing Shopping centres
• Shopping centres and galleries still account for the majority of retail investment volumes (45% in H1 2019) due to the sale by Casino to Fortress of a portfolio of 26 hypermarket and supermarket properties for almost 400 million euros. However, this market segment remained virtually flat in the second quarter, while high street and retail park assets saw a slight increase in activity. • Nevertheless, for the retail park market, mid-year results are mixed, with volumes down 19% year-on-year. In the high street sector, a few portfolio sales and rare acquisitions of prime Parisian assets made it possible to offset some of the slowdown of the first quarter. 44 THE RETAIL PROPERTY MARKET The investment market
French take the lead Funds still in the top spot Breakdown of retail investment volume by nationality Breakdown of retail investment volume by investor type France, in H1 2019 France, in H1 2019
Source: Knight Frank Source: Knight Frank
1% 3%
17% Funds
France Property investment 40% companies € zone 46% SCPI / OPCI Europe (outside € zone) 55% North America 16% Private investors Other Other
2% 2% 18%
• While Americans accounted for the majority of retail investment in Q1, French investors were the most active over the first half of the year. The latter account for 53% of the amounts committed on the retail market and are behind some of the largest deals of Q2, such as the acquisition by Paref of a portfolio of 27 assets in the provinces for €94 million. • Investment funds have accounted for the majority of sums invested on the French retail market (46%) since the beginning of 2019, ahead of private investors and property-investment firms. 45 THE RETAIL PROPERTY MARKET The investment market
Stabilisation 2009-2018 Retail Prime retail yields Change In France, as a % parks
Source: Knight Frank -31%
10.00
9.00 Shopping 8.00 Centres
7.00 -23%
6.00
5.00 5.00 High 4.25 4.00 streets
3.00 2.90 -39%
2.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q2 2019 Q2
High streets Regional shopping centres Retail parks
• Prime yields for Parisian retail streets, shopping centres and retail parks have not changed since the beginning of the year, and stand at 2.90%, 4.25% and 5.00% respectively. • However, it should be noted that there are very few transaction references for prime assets. 46 Contacts
Antoine Grignon Antoine Salmon Vianney d’Ersu David Bourla Partner | Head of Retail Capital Partner | Head of Retail Leasing Partner | Retail Leasing Partner | Chief Economist & Markets & Leasing Head of Research
+33 (0)1 43 16 88 70 +33 (0)1 43 16 88 64 +33 (0)1 43 16 56 04 +33 (0)1 43 16 55 75 +33 (0)6 73 86 11 02 +33 (0)6 09 17 81 76 +33 (0)6 75 26 03 96 +33 (0)7 84 07 94 96 [email protected] [email protected] [email protected] [email protected]
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