Think: Global outlets
Designer outlets have been one of the most widely misunderstood, but strongest performing, real estate sectors in Europe over the past decade. Relatively speaking, they thrived during the global economic downturn. So what are outlet malls and what is so special about them? Typically, they are single storey, village style retail centres, selling goods at a 30-70% discount. They do, however, come in all shapes and sizes, and naturally vary in quality. Ownership is largely accounted for by a few major players who tend to manage the better schemes, plus a larger group of single or small portfolio owners.
This specialist division of the retail market is relatively immature - as both a shopping concept and an investment opportunity. This is changing as retailing becomes more international and demand for luxury goods increases globally in line with the burgeoning middle-classes. The sector is already popular with shoppers and tourists, and the best schemes generate among the strongest sales densities of any retail destination. Retailers, enticed by the strong footfall and sales, are increasingly including outlets in their portfolio strategy. In turn, the sector is attracting a wider pool of investors.