Nuveen Real Estate saves 190,000€ in energy costs in the three retail parks of the UNITED portfolio through intelligent energy management. This result and other new approaches to the more profitable management of retail parks are provided by the seventh edition of the market report "Fachmarktzentren in Deutschland. Securing values, increasing values".
New approaches to securing and increasing value
MEC and its partners Dr. Lademann & Partner, Nuveen Real Estate, Savills and WISAG have presented the 100-page report to the public today at real estate trade fair EXPO REAL in Munich. The core topic of the Report’s 2019 edition is securing and increasing the value of retail real estate. The case study "UNITED Portfolio", for example, illustrates how efficient energy management and transparency of costs and contracts affect the business case. "Retail parks will continue to be a profitable asset class with great potential in the future," says Christian Schröder, COO of MEC.
Proven reduction in operating costs in UNITED portfolio
"By re-tendering and bundling electricity and gas supply contracts and simplifying the billing process, the gas costs of the UNITED portfolio are reduced by 21% and electricity costs by 18%", explains Westbridge Advisory Managing Director Rüdiger Salzmann. Nuveen Real Estate is working with the Frankfurt based consulting firm to optimize operating costs.
Late in 2017, Nuveen Real Estate acquired the UNITED portfolio, consisting of the Helvetia Parc Groß-Gerau, the Löwen Center Leipzig, the Ostkreuz Center Oststeinbek and two Real Stand Alones, for one of its funds.
Asset class retail park: securing values, increasing values - increasing operating reserves
In the interview conducted with Nuveen Real Estate for the new retail parks report, the "Olymp” portfolio, which was sold in 2018, is used as an example to illustrate the strategies used by the real estate investment manager to increase the value of the eleven retail parks and hybrid centres for the investors of his German Retail Income Fund. The Head of Retail Germany at Nuveen Real Estate, Kathrin Andres, explains: "Repositioning on the basis of legal planning adjustments and further developments in the tenant mix, modernizations carried out together with existing tenants as well as optimizations on the cost side have made a significant contribution to securing the competitive sustainability of the well-chosen properties during the holding period and, on this basis, to achieving an optimal result for our investors in the sale of the portfolio".
Sustainable building operation enables significant cost reduction
The facility management company WISAG names concrete examples of how ecological and economic aspects can be combined. Modernisation measures in the field of building services engineering can reduce ancillary costs and reduce maintenance and repair costs. Special dry cleaning systems make chemical cleaning agents superfluous. "By converting to LED lighting technology, carbon dioxide emissions can be reduced as well as electricity costs," explains Joaquin Jimenez Zabala, Sales Director Shopping Center at WISAG Facility Management.
Opportunities in building and planning law
The latest ruling of the European Court of Justice in the Visser/Appingedam case also offers new opportunities for the vitalization of retail parks. In his contribution, Uwe Seidel of Dr. Lademann & Partner outlines that the strengthening of freedom to provide services and freedom of establishment will have a positive effect on the asset class of retail parks. "The ruling forces the municipalities as planners to comply with the requirements of non-discrimination, necessity and proportionality in the development plan procedures," explains Seidel.
Boring is sexy: retail parks will continue to be investors' darlings in the future
Even though the prime yields of retail parks have fallen by 280 basis points to 3.9% since 2009, they will continue to meet high investor demand in the future: "Well-positioned retail parks with a local supply character offer a yield advantage over other asset classes such as office buildings", says the Head of Retail Investment Services Germany and Chairman of the European Retail Investment Board at Savills Immobilien-Beratungs GmbH, Jörg Krechky.
Modernisation T.E.C. Erfurt and revitalisation EDU Bremen
In Chapter 6 of the new Retail parks report, authors from MEC present two new practical examples for maintaining and increasing the value of retail parks: The modernisation and positioning of T.E.C. Erfurt and the development of EDU Einkaufspark Duckwitz in Bremen from a real stand-alone to a modern and diversified retail park.
Fitness studios and a view through the milieu glasses
The seventh retail parks report also analyses trends from the tenants' and end consumers' point of view. Head of Real Estate at FitX, Sebastian Twyrdy, explains which concepts are responsible for a higher visitor frequency from the tenant's point of view. In their contribution, Dr. Silke Borgstedt and Jochen Resch from Sinus Markt- und Sozialforschung explain that retail parks will remain important shopping destinations for the "middle class" and representatives of the "Adaptive-Pragmatic Millieu" because they offer moderate prices, one-stop shopping and seriousness.
12.5 % budget savings through digitization
Marc Mockwitz from the IT developer Cloudbrixx also provides a further best case for the new retail parks report. Using the construction of a convention center in Hessen as an example, he explains that budget savings of €7.44 million could be achieved due to the digitization of all processes.
You can find the new Retail Parks Report online at:
Pictured left to right: Uwe Seidel (Dr. Lademann & Partner), Gerrit Egg (WISAG), Christian Schröder (MEC), Jörg Krechky (Savills), Sebastian Kienert (MEC), Kathrin Andres (Nuveen), Moritz Felix Lück (MEC), Joaquin Jimenez Zabala (WISAG).