Talk with designer outlet group McArthurGlen
Gary Bond: "Only the brave invest in Germany"
In a country known for its love affair with red tape, designer outlet centres provide those who fear Anglo-Saxon retail concepts with ample scope to delay planning permission.
Thus, McArthurGlen has only managed to open two sites in Germany to date: Wustermark, near Berlin, in 2009 and Neumünster, near Hamburg, last year.
Gary Bond, Managing Director Development, explains why Europe's leading owner, developer and manager of designer outlets still keeps the faith.
This 52-year-old English executive has overseen the company's international acquisition and development programme since 1996. During this time, Bond and his team have developed over 600,000m² of retail space with a further 100,000m² in the pipeline.
Currently, London-based partnership McArthurGlen runs 21 centres with more than 2,000 brand shops across eight European countries. They attract some 75 million visitors a year.
Tourists and locals within a 90-minute-drive catchment area are enticed to these attractively landscaped "brand villages" by 30 to 70 per cent discounts on top (fashion) brands. On average, customers visit their local centre ten times a year, and each visit lasts over two hours.
As a private company McArthurGlen Group does not publish results. The latest available estimate for the annual sales volume of its brand shops was just over €2bn in 2010.
INTERVIEWMr. Bond, in which of your eight European countries do you see the most growth and why?
We see potential across many regions of Western Europe, particularly in Germany. According to ecostra figures, it still only has around one square metre of outlet space per 1,000 inhabitants, compared with 8.9 square metres in Austria and 8.5 square meters in the UK.
We are also ‘growing’ our existing centres by expanding sites in Italy (Castel Romano, Barberino, and La Reggia), the UK (Swindon), Germany (Neumünster), and the Netherlands (Roermond).
We are planning a new designer outlet in the south of France, a key tourist destination, and in the affluent and historic city of Ghent. The latter has one of the biggest catchments in Europe, with more than 15 million people living within a 90-minute drive.
Do you intend to enter any other countries?
Site preparation has already started on our 22nd McArthurGlen Designer Outlet, which is due to open in Vancouver in 2014. This will be our first centre outside Europe, and is a joint project with Vancouver Airport Authority.
The site is three minutes from the airport by SkyTrain, and half an hour from downtown Vancouver, The centre will offer up to 200,000ft² of retail space in a first phase and 370,000ft² when all phases are open.
Vancouver International Airport is Canada’s second-busiest, and acts as a gateway to Asia, with 57 direct flights each week to Asia Pacific.
Why do you think it is that both McArthurGlen and your competitor Value Retail originally came from America?
The US is the home of designer outlet retailing and the market quickly became saturated. Thus, when McArthurGlen opened Europe’s first designer outlet centre, Cheshire Oaks, in the UK in 1995, it was exporting the concept to virgin territory.
So why then are you returning to North America?
We are not looking at areas where there are a lot of outlets, but for niches where we believe we can create something of a different quality to what one normally sees in the States.
Surprisingly, although designer outlets were invented in the US, they are still mostly first-generation. The emphasis is not on architecture, and the design and landscaping remain very simple; they tend to be more like big boxes.
Therefore, a lot of our luxury brands have suggested that we take our concept to certain areas of North America where we think it could still work.
In Germany you have already opened designer outlets in Wustermark and Neumünster. Have you anything else in the pipeline?
We are currently in the early planning stages of opening a new centre in Remscheid in the Federal State of North Rhine-Westphalia. We are working with the local city authority and hope to have planning permission and building rights approved in 2014, to be on site in 2015, and to open in 2016.
Why is Germany so attractive for McArthurGlen?
Germany is one of our key markets for expansion because it is the wealthiest country in Europe and remains underdeveloped in terms of outlet space.
When we plan a new centre, it is very important for us to go where there is interest from our brand partners, and Germany already has a very well-developed fashion and retail industry.
What percentage of shops have you been able to lease at Wustermark and Neumünster? Are sales on track?
We are very happy with the leasing level and rising sales at both these centres.
Neumünster, in the Federal State of Schleswig-Holstein, is around 80 per cent leased, less than four months after opening, with top brands such as Zegna, Boss, Escada, Michael Kors, Corneliani, René Lezard and Marc Cain. In the first three months alone, we had more than 800,000 visitors.
Our outlet in Wustermark, near Berlin, is fully leased, with only a couple of vacant units. This is an optimal situation as it gives us the flexibility to target specific new brands whose shops we would like to open at the centre.
Where does Germany stand in the bureaucratic league as regards average planning permission times?
The planning process in Germany is complex, and it takes both time and patience to open a designer outlet.
For example, we first spoke with the city authorities in Neumünster in 2006, after they had already been working with the idea of opening a designer outlet for five years. The centre finally became a reality in 2012.
Why is German planning bureaucracy so unwieldy? Or are we dealing with another instance of primordial Teutonic fear of all new Anglo-Saxon retail forms?
I think the basic intention behind the planning process for major retail developments is actually very similar to that in the UK. However, in England, where McArthurGlen has opened seven centres over the last 15 years, we have managed to win over communities and urban councils.
We have proven that we can put a town on the map and regenerate its retail structures. Our centres create hundreds of thousands of tourist visits, which stimulate the opening of restaurants and hotels etc. This, in turn, creates many new jobs.
Therefore, British towns, councils, and regions are increasingly asking us to open new centres or to expand existing ones.
So you are still hoping that this is going to happen in Germany?
Yes, we have already seen this in Roermond in the Netherlands, just over the border from Düsseldorf. The council authorities there are encouraging us to do a fourth stage and to expand the centre from 35,000m² to 50,000m².
In Germany it’s still early days. We opened in 2009 in Wustermark, near Berlin, after battling for planning permission around Germany for over ten years.
Normally, when we’ve gone through planning processes in Germany in the past, we have always had support from the local towns, because they want the investment and the jobs, but the surrounding towns always oppose, and we need to convince the state planning departments through long discussions.
Clearly, it is not an optimum situation for an investor to have the state battling you in court!
In February 1997, this editor interviewed your former partner George Bennett as to how planning permission approval was progressing in Soltau/Germany. What eventually happened there?
We had the site under contract for five years before we decided to sell it to Sylvie Mutschler. Sylvie actually managed to open it after a further six years. So the whole planning process took eleven years!
So where’s the real problem?
The problem with Germany is that the planning process just goes on and on. Ideally, one would obtain provisional permission where others would have just one right of appeal, pending a final decision to be made within one year. Then investors would know where they stand.
Instead, one receives permission, it is appealed, you win the appeal, and then it is appealed again and again through ever higher courts. So you have to be quite brave to invest in Germany.
But you’ve still come to the conclusion that it’s worth the time and effort?
Yes, we’ve learned a lot over the years from a planning point of view as to what will and what won’t work. I think that getting closer to town centres is probably the key to obtaining permission in Germany because many of our visitors will also shop there.
For instance, an initial application near a motorway failed for Remscheid, but we are now quite optimistic about obtaining planning approval for a site at a former football stadium adjoining the town centre.
Why not go whole hog and move straight into town centres?
While we should love to go into a town centre and own it, we would need the whole town centre to make it work.
As town centres rightly need numerous small local services, such as chemists, banks, butchers, newsagents etc., it would be wrong for us to move there.
So we are a different offer, and therefore the ideal location for an outlet is to be near to, rather than directly in, a town centre so that all parties can benefit.
Presumably a town-centre site would also cause problems with your brand partners?
Obviously, it is essential for them to distinguish their outlet offer from their High Street offer. Brands most certainly don’t want to ruin their full-price operation by competing with themselves in the same town centre.
However, brands at our edge-of-town centres may also have stores in the local town centre, and the two concepts work well together, with only a small overlap of customers.
To be successful in our business you have to create an identity where consumers understand that they are going to a different type of retail proposition.
Shopping at our centres is opportunistic, serendipitous and leisure-oriented, where customers are attracted by the brand names at the centre, but don’t know what they are going to find in advance.
So our concept doesn’t affect the normal shopping patterns for a town centre. People still do their everyday shopping in town centres where they know they will find current stock.
Many full-price retailers are failing in German city centres. Why not make them or their developers an offer?
If they have centres which are well-located, but are failing, we should be more than happy to consider taking them, if they are in the right location with the right catchment. It would also be the quickest way to gain planning approval!
We have already proved that we can do this by taking over a failed shopping centre in Salzburg and opening Designer Outlet Salzburg in 2009.
Often, however, such centres are not large enough to be viable, or they are in very difficult town centre locations which people can’t easily drive to or park at.
To what extent have your outlet centres managed to attract clientele from emerging markets?
We have seen huge growth in sales among such fervent shopping tourists. Across our portfolio, relevant sales rose by more than 60 per cent in 2012.
At Designer Outlet Berlin, sales to fashion-conscious travellers to Europe grew by nearly 80 per cent; Chinese shoppers, who are now the second-largest spenders after the Russians, spent nearly 140 per cent more.
Why should visitors from China and Brazil etc. shop in the German countryside rather than in exciting major cities?
Our centres are not about shopping in the country; in fact, many of them are in urban or edge-of-city locations.
Wustermark is only 30 minutes from central Berlin and reachable by public transport. Neumünster is 40 minutes from Hamburg and can be reached by public transport or shuttle buses from both Hamburg and Kiel city centres. Our planned outlet in Remscheid is also on the edge of the city.
More and more green space is being turned into asphalt. Are big sales outlets and car parks in rural or semi-rural areas really in tune with the times?
Wustermark was developed on the site of a former outlet centre. We have created an attractive destination with landscaped areas and architecture inspired by regional designs and culture.
The Neumünster site was already zoned for commercial use, and nearby occupants are commercial. Remscheid is a redevelopment of an old sports stadium.
How many designer outlet centres could Germany sustain theoretically?
In a country of 80 million people I could envisage roughly 30 good-quality centres of around 25,000m² to 30,000m², similar to what we have done at Wustermark and Neumünster, and to what Value Retail have done at Wertheim and Ingolstadt.
Many top brands lease shops in your outlets. Why are your centres anathema to some medium-sized brands?
We cannot comment on why particular brands are not at our centres, but your question surprises me.
We look to offer the best mix of brands for our visitors from across the 90-minute catchment area as well as national and international tourists. Therefore, we already have over 850 different brands across our portfolio, which very much include PMEs.
We’re certainly not just about luxury. Probably only 30 per cent of our offer is composed of more luxury brands such as Boss, Prada, and Gucci etc.
You should also remember that we still only represent around 1 per cent of the turnover of these brands in the UK and probably only one quarter of a per cent in Germany.
Related article in German: Interview by Mike Dawson in Lebensmittel Zeitung, no. 6, 08.02.2013
The following background material is an abridged English version of an article written by fashion editor Jörg Nowicki just under a year ago for Lebensmittel Zeitung's B2B sister publication TextilWirtschaft (no. 16, 19.04.12).
The German outlet centre scene is changing so rapidly that inevitably some of the news is already slightly out-of-date. The piece is suffixed here for its insight into the worries of local fashion retailers and the workings of German planning authorisation:
Germany's Outlet Center Scene
Germany currently has the highest number of planned outlet centres in Europe. Never before have so many new centres been on the threshold of opening.
Yet, Franz-Bernhard Wagener fought to the bitter end. He battled against the 27,000m² outlet center in Roppenheim, which will open next Wednesday less than 10km from his women’s fashion shop in the center of Baden-Baden.
The Village, which sprang from the soil like mushrooms after an autumn rain, doesn’t seem the least bit threatening at first glance. “Surreal” would be a more appropriate adjective.
But Wagener is afraid: “I expect the inner city to suffer a 10 to 20% decline in revenues.” During the past several months, he has prepared his business for the new competitor. “We’ve invested a seven-digit sum in our house,” he says.
These investments were associated with a trading-up of the assortments. Wagener is relatively unperturbed about the brands that will be represented in the new FOC: “They include several brands which are already on our scratch list, for example, Seidensticker.”
Most important for him is that Hugo Boss isn’t present at the new FOC. He’s disappointed that Schumacher numbers among the tenants. “But we’ll take a long, calm look at the new site first -- and then we’ll decide on the consequences.”
This year, several other fashion retailers are facing the same challenge that confronts Franz-Bernhard Wagener because 2012 will be the year of outlet centers.
Wholly new projects will celebrate their grand openings this fall in Neumünster and Soltau, and numerous existing malls, such as those in Ochtrup and Wolfsburg, will be enlarged.
Marc Ramelow is another retailer who has been affected. Both Soltau and Neumünster are located in the catchment area of his fashion houses in northern Germany.
He didn’t make any special preparations. “We must concentrate on our own business,” he says. His motto: individual excellence and attention to detail.
But Ramelow is still peeved by Lower Saxony’s former minister-president Christian Wulff whose “decision to approve construction of the outlet center was an affront.”
The 10,000m² Nortex fashion house in Neumünster will bear the brunt of the new competition. A new FOC will open just 1km away in September. It will be operated by McArthur Glen, which also runs similar centers in Roermond, Salzburg and elsewhere.
Nortex’s purchasing manager Petra Hinz is calm: “We haven’t yet made any strategic changes. We’ll keep a close eye on the situation during the first few months and afterwards we’ll decide what measures to implement.”
Outlet operators see themselves at the beginning of a campaign of conquest here in Germany. In Britain, by contrast, the first centers have already been forced to close due to oversaturation of the market. Germany, on the other hand, is regarded as undersupplied in international comparison.
That situation will soon change. “Germany is the focal point of all developers, and the German market is the most eagerly courted market in Europe,” says Thomas Schrickel of Dutch operator Stable International, which plans to start in Germany with centers in Wiedemar, Montabaur and elsewhere.
The Mutschler Group too, which wants to open its first outlet center in Soltau in the late summer, is eager to make additional investments, and would prefer to invest either in the Ruhr Region or in southern Germany.
“Demand still remains unsatisfied, but the search for suitable sites is extremely difficult,” says MD Sylvie Mutschler.
Sebastian Sommer, MD of outlet specialist Neinver, agrees with Mutschler: “An FOC has been planned for the Baden-Baden region since 2003. Various developers have repeatedly attempted the project.” Only now, nine years later, have these plans become tangible reality in Roppenheim.
Neinver, which also operates the outlet center in Zweibrücken, has ambitious goals that it intends to achieve in a JV with project developer MAB.
A total €350m are scheduled for investment in six or seven new outlets in Germany and France during the next five years. Sommer says, “We’re massively underway in Germany to assure the feasibility of our new projects.”
Although the brands are very interested in the new outlet locations, most companies still try to act as stealthily as possible because they fear pressure from their customers in the retail trade.
But discussions about this topic between suppliers and retailers aren’t quite as heated nowadays as they have been in the past. Brand manufacturers now approach this theme with more self-confidence.
Kristofer Jürgensen, whose firm Ia Outlet is among those responsible for renting stores in Soltau, says, “Increasingly many brands regard outlet stores as a strategically important growth field.”
For example, Hugo Boss: “We’ve underestimated the importance of this theme for much too long,” said CEO Claus-Dietrich Lahrs at the latest annual results presentation.
The outlet store in the Metzingen-based company’s home city is regarded as one of the pilgrimage sites for bargain hunters and allegedly earns sales of €25,000 per square meter.
It was the only Hugo Boss in Germany for many years, although this brand’s merchandise was available at outlet centers in Roermond and Salzburg, both of which are near the German frontier.
Hugo Boss has been represented in Wertheim for several months already. The company remains silent about further expansion plans. However, it is known that the company plans to nearly double its Metzingen area to 8,000m² by 2014.
The theme is also on the agenda for Basler. “We’re actively occupying ourselves with this topic. Outlet centers are the better and less costly alternative for us to sell our old merchandise,” says MD Michael Krauledat.
This is because when one sells to wholesale buyers, one never knows where the goods will ultimately reappear: “With our own outlet stores, we have full control over the merchandise.”
Basler operates twelve such stores throughout Europe, including seven in Germany. The number is not scheduled to increase in the near future. “These stores have become a common channel of distribution which can even outperform a brand,” says Krauledat.
The stores thus also serve as a way to attract new customers to his brand: “Outlet centers are very popular among consumers.”
And consumers at these centers primarily look for top brands. One rule of thumb: the trendier the brand, the greater the concessions likely to be made by the landlord.
No one speaks openly about it, but it’s no secret: top brands like Hugo Boss or Ralph Lauren let landlords sweeten the decision in favor of a store in an outlet center by agreeing to pay expansion costs. Alternatively, they lure the future tenant with the offer of rent-free periods.
When outlet centers first open, they usually don’t rent every available store. “They generally leave 20% vacant for later tenants,” one insider says.
The latecomers tend to be the hesitant top brands, which wait for the grand opening to come and go before they decide whether the location is appropriate for them.
But the red carpet is also rolled out to welcome the coveted players in outlet centers that are essentially fully rented.
The leases are generally “more flexible” than in normal shopping centers. Some rental contracts contain brutal termination clauses and extraordinary termination rights to squeeze out weaker tenants.
As far as rent is concerned, the tenant usually agrees to a mixture of basic rent plus a percentage of the revenues. Insiders say that €30 to €40 per month and square meter are usual; €50 or €60 per month and square meter are not uncommon at top venues such as Ingolstadt and Wertheim.
A whole series of new outlet centers is expected next year by Joachim Will, whose business-consulting firm Ecostra has monitored the development of the outlet scene for many years: “The pipeline is full.”
In past years, restrictions on construction prompted several outlets to settle outside Germany but at sites close to its borders, from which they can access the purchasing power of the German market.
Roermond, Maasmechelen, Salzburg and now Roppenheim are examples of this. Will says that 70% of the customers in Roermond come from Germany.
But restrictions have become noticeably less strict with regard to approvals for new centers.
“At Ochtrup, for example, a law was voided which had formerly allowed outlets only in cities with populations of 100,000 or more. A legal proceeding is underway to obtain permission to deviate from a planning objective in Sinsheim, and the state government in Thuringia wants to smooth the way for an outlet center.”
One question which always triggers energetic discussions is this: How strong is the pressure exerted by an outlet center on the retail trade in its vicinity?
Joachim Will was recently in Wurzburg, just 25km from Wertheim. “Predictions made before WertheimVillage’s grand opening were that nearby retailers would suffer revenue losses between five and ten percent. But the actual percentage in Wurzburg is only 1.7%, says Will.
He adds that an FOC lives from a very large catchment area, so its effects on immediate neighbors are comparatively small: “Regional retailers are far more negatively affected by the little outlet center at S.Oliver in Rottendorf.”
Transportation infrastructure is the decisive factor for an FOC site. The preferred location is an undeveloped out-of-town site near a busy motorway. Joachim Will expects that outlet centers in inner cities will also be the exception rather than the rule in the foreseeable future.
One exception is Wolfsburg, where Germany’s first inner-city FOC celebrated its grand opening at the end of 2007. Its presence is a major challenge for Hempel fashion house, which was formerly the local “top dog” and which has 2,500m² sales area.
Fears were correspondingly great. How does the bottom line look today? “We suffered somewhat in men’s wear, and no effects are palpable in women’s clothing. Overall, we’ve had a slight plus over the past years, and we’re currently operating at the same level as the rest of our industry,” says Fritz Hempel.
But extreme efforts were made, especially in assortment and personnel. The degree of fashion was increased. Brands like Levi’s and Lacoste, which are also represented in the outlet, were removed from the selection.
Because of the special situation onsite, Hempel negotiated with its suppliers more strongly than in the past, obliging some of them keep their promises and persuading some to grant Hempel better terms & conditions.
One interesting fact: Although Roy Robson and Bugatti both sell their merchandise at the outlet, Hempel’s revenues from these two brands has actually increased.
Hempel takes a rather critical view of the expansion of the outlet center in Wolfsburg, which is planned for the year’s end, but he remains calm and is looking forward to this coming May.
That’s when the VW workforce receives its annual bonus, which will be €7,500 per capita this year -- the highest such bonus ever paid in VW’s history. Hempel says, “I’m sure the workers will leave some of that money in our store.”
World premiere in Metzingen
All eyes in the outlet scene are turned towards Metzingen. Probably the best known German FOC will score a major coup in June when it becomes the world’s first FOC to start its own online shop.
This industry is known for its secretiveness, so CEO Wolfgang Bauer refuses to divulge any details. Which brands will participate? What does the business model look like? To which countries will deliveries be shipped?
Bauer’s reply: “No comment.” It is known, however, that the brands will be able to exercise a relatively large degree of autonomy over their presence.
It will be left to the brands to decide whether they want to permanently upload their selection of merchandise or whether they prefer to conduct temporary special activities.
“We’re negotiating with the brands and the feedback is very positive,” Bauer says self-confidently. “We’ve earned the trust of the customers and the brands thanks to our many years of experience and our stationary presence.”
Bauer intends to leave the fulfilment tasks to a service provider.
The www.outletcity-metzingen.de website is currently being redesigned. “Approximately half of our visitors go to the internet first to find information about us before visiting us physically afterwards,” Bauer says.
Armani, Loro Piana and Max Mara are just a few of the brands that opened boutiques in Metzingen in 2011.
The center welcomes some 3.5m visitors annually. Visitors from Russia and Switzerland increased 30% in 2011, and the number of Chinese guests grew 40%.
The outlet city is dominated by the Holy family fashion empire (Strellson, Joop & Windsor). They own 90% of the real estate.
Outlet center plans to open in Soltau in late summer
“Construction is in the planning phase. The grand opening will take place at the end of August or the beginning of September,” says Sylvie Mutschler, whose Mutschler Group is responsible for the development of Designer Outlet Center Soltau (DOS).
Approximately 60% of the sales area has already rented. The DOS is located alongside the A7 motorway between Hamburg and Hannover.
With Heidepark, WalsrodeBirdPark and SerengetiPark in the nearby vicinity, this region has Germany’s densest concentration of theme parks, a fact which suggests that DOS will host large numbers of visitors and thus be successful.
The center will have at its disposal a total rental area of 13,500m². Between 55 and 60 stores are planned. The names of the tenants have not been officially announced.
It is known, however, that brands which belong to the Bestseller Group (Vero Moda, Jack & Jones, and others) and the Turkish label Sarar will be represented.
Outlet operator Value Retail, which wants to open a center of its own in nearby Bispingen, continues to pursue litigation against construction approval for DOS.
Montabaur: Leasing has begun
For many years, plans have existed for an outlet center at Montabaur in Rhineland-Palatinate. The investor behind this project is telecommunications businessman Ralph Dommermuth (United Internet/I&I). Dutch company Stable International is prepared to serve as developer and operator.
According to Thomas Schrickel of Stable International, all legal obstacles have been overcome which had formerly stood in the way of building the proposed center beside the ICE railway station and the A3 motorway.
Plans now call for construction work to begin in summer 2013. The process of renting the stores has already begun. Schrickel is optimistic. The isolated location, he says, assures a low “retail sensitivity” for the outlet center.
It plans to position itself in the premium segment, comparable with the FOC in Wertheim, for example. A rental area of 13,900m² and a total of 75 stores are planned.
Brehna battles against Wiedemar
There is still no clarity about which site will be chosen for the construction of an outlet center in the region near the border between Saxony and Saxony-Anhalt. The cities of Brehna (Saxony-Anhalt) and Wiedemar (Saxony) are situated only 15km apart.
Wolfsburg outlet will expand
Germany’s first outlet center in an inner city celebrated its grand opening with a rental area of 11,500m² and 46 shops at the end of 2007.
According to Stephan Schäfer, CEO of the FOC’s operating company OCI, the center has rented 100% of its stores, and Van Laack and Lindt Chocolate started anew this spring.
OCI has received approval for an additional 10,500m², of which 6,000m² are expected to be built by year’s end, thus providing space for about 30 new brands.
Schäfer says that the occupancy percentage is currently 65% and is expected to increase to 80% by opening day, but he declined to specify the names of incoming tenants.
The third phase of construction is scheduled to be completed by the end of 2014, thus giving the center a total area of 22,000m² (100 stores).
Duisburg awaits council decision
The initiators of the outlet center in Duisburg-Marxloh hope that the council will issue its final decision about the project by year’s end.
According to a spokeswoman, the head of the city’s planning department is “fully and wholly in favor of the project.”
Plans call for a 31,000m² FOC to be built in several phases for €125m on the campus of the former Rhine-Ruhr Hall. The center is not expected to open before 2014.
Behind the project stands the German Development Group which specializes in real estate. Freeport will be entrusted with the center management.
Duisburg can rely on high population density: according to statistics provided by the city, 24m inhabitants with annual purchasing power of €434m reside within a 90-minute travel catchment.
EOC Ochtrup grows 13,500m²
EOC Ochtrup will become EOC Münsterland. Hütten Holding GmbH, behind which stands the Dankbar (Bianca) family of textile entrepreneurs, is investing €52m to expand the outlet center in Ochtrup.
Sales area at the outlet, which opened in 2004, will be increased by 13,500m² to a total of 17,100m². A total 65 to 70 stores will sell c. 110 different brands in their assortments.
Development and rentals are in the hands of Cologne-based specialist Retail Development Group. Group CEO Ulrich Nordhorn says, “Over 70% of the area has already been rented. The merchandise will be in the medium to high-priced segment.”
The company states that 5m people reside within a 60-minute-drive.
Neumünster: McArthur Glenn reports 60% occupancy rate
“We’ve reached our home stretch,” says Henning Balzer, development manager of FOC specialist McArthurGlen.
Balzer is referring to the outlet center in Neumünster, Schleswig-Holstein, which is located alongside the A7 motorway between Hamburg and Flensburg. The center is scheduled to open in September.
Insiders report that it wasn’t so easy to rent the center’s stores because several large fashion houses in northern Germany are rumored to have exerted pressure on their suppliers.
Balzer, who expects the center to welcome 2m visitors per year, refuses to confirm these rumors: “The interest is enormous. We’ve already rented 60% of our shops.” The names of the tenants were not mentioned. An enlargement to 7,000m² is already firmly planned.
McArthurGlen is already represented at Wustermark (near Berlin), plans to open a new FOC in Remscheid, and intends to expand further.
Balzer says, “We’re looking into additional sites, but nothing has yet progressed so far along that I can comment about it at this time.”
Sinsheim: Football, cars, shopping
The outlet center in Sinsheim, Baden-Württemberg is still in the planning stage. Currently, the state government must decide about the so-called “Zielabweichungsverfahren,” i.e., proceedings to obtain permission to deviate from a planning objective.
The investor (E.L. Immobilien GmbH, based in Güglingen) intends to build an FOC on a 10,000m² campus. The plot of land is located alongside the A6 motorway, adjacent to the Auto&TechnikMuseum and opposite the TSG Hoffenheim football stadium.
The number of stores will be 50 to 60. No information has been divulged about the names of the tenants.
According to a spokesman for Neuland (the project’s developer), construction will not begin before the second half of 2013. The volume of investment will be between €50m and €60m.
For several years already, Value Retail has been eager to expand WertheimVillage, which is located alongside the A3 Autobahn.
In the meantime, the originally planned 6,000m² expansion has been reduced to a proposed addition of just 3,500m².
CEO John Quinn hopes for planning authority permission by year’s end. Construction work would begin as soon as possible after that. On completion, the expansion would enable the Village to add c. 30 new stores.
WertheimVillage opened in 2003 and is one of Germany’s most successful outlet centers.
Outlet operator Value Retail also wants to expand its center in Ingolstadt, which opened in 2005. Plans call for an additional 1,500m² sales area for approx. 15 new stores. A precise time plan has not yet been drafted.
CEO John Quinn says: “IngolstadtVillage has developed very strongly. We have a very high percentage of international guests. Russians, who mostly come to visit from Kitzbühel in the wintertime, are especially big spenders at our Village.”
FOC specialist Value Retail (operator of WertheimVillage and IngolstadtVillage) refuses to admit defeat. The Soltau FOC site officially received the green light from the state government and construction has already begun there.
But Value Retail continues to pursue litigation against the construction approval in favor of its own project in nearby Bispingen.CEO John Quinn explains that Value Retail definitely wants to build in Bispingen.
If no permission is granted for the Village project, then -- analogously with the process followed in Metzingen or Stuhr -- his company would begin with a small area and successively expand it. Fifteen leases have already been signed by prospective tenants at the projected FOC.
OchtumPark will undergo further expansion. According to proprietor Rolf Müllmann, the enlargement will add 2,500m² of new sales area. Seven or eight stores are planned, and the majority of them have already been rented.
Rumour has it that the new tenants will include S.Oliver, Fossil, Lacoste and Asics. The opening is planned for the end of 2012. OchtumPark is located in Sturh, Lower Saxony, directly alongside the border with Bremen. After the expansion, there will be more than 40 stores at the site.
Hesta Immobilien wants to add 4,500m² to the Seemaxx outlet center in the center of Radolfzell. The expansion would create a total sales area of 10,000m².
Hesta’s CEO Arnold Kannenberg says that the community council and the city administration have agreed to the application. An application for proceedings to obtain permission to deviate from a planning objective has now been submitted. A decision is expected to be made sometime this year.
In October last year, 75% of the residents of Remscheid voted in favor of permitting construction of an outlet center alongside the A1 motorway.
Now FOC specialist McArthurGlen is pursuing the bureaucratic path through the various responsible authorities. Permission to build is expected to be granted by the end of 2013. The center could celebrate its grand opening in 2015.
Plans for the first construction phase call for a center with 100 stores and 15,000m² sales area. A second construction phase would add 5,000m².
The project for an outlet center at Herrieden in Bavaria remains undecided. The center is planned on a previously undeveloped plot of land situated directly beside the motorway exit for Herrieden.
The project has been championed thus far by Wilhelm Nägelein, who founded Carlo Colucci. A first request for permission to build was denied. Nägelein says that the city is currently making efforts to gain permission for the project.
The “myland” outlet center is scheduled to open in Wadgassen on September 20. Project director Richard Sigler from IBS group announced that the center will provide space for approx. 30 stores with a combined sales area of 12,300m².
The first building, with c. 800m² of floor space, has been rented to Villeroy & Boch: this store was already completed and opened last year.
The center is located alongside the A620 highway. It is believed that nearly all of its stores have already been rented, but the names of the tenants have not been disclosed. Investment totaled c. €25m. The grand opening is planned for September 20.