SPANISH MARKET QUICK OVERVIEW - March 2019
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SPANISH MARKET QUICK OVERVIEW March 2019
RETAIL MARKET OVERVIEW JANUARY 2019 2
QUICK OVERVIEW
KEY PORTFOLIO METRICS TOP 10 TENANTS BY CONTRACTUAL RENT
GAV (€M) 898M MEDIA MARKT 4.5%
ZARA 4.2%
ASSETS 19
BRICOR 3.6%
GLA (m2) 318k 3.1%
CARREFOUR
AVE. ASSET VALUE (€M) 47M AKI 2.9%
VACANCY 1.80% SPRINTER 2.4%
NATIONAL TENANTS 93% MERCADONA 2.2%
KIWOKO 2.2%
WAULT(1) 14.8 yrs
KIABI 2.0%
AVE RENT (m2/month) €13.96 1.9%
WORTEN
SECTOR SPLIT BY GAV TENANT MIX BY CONTRACTUAL RENT GEOGRAPHICAL SPLIT BY GAV
31% Fashion 43% Andalucia
GAV RENT 10% F&B GAV 23% Extremadura
€898M €4.3M 9% Services €898M 11% Castilla León
7% Electronics 10% Com. Valenciana
66% Shopping Centre
7% Sports goods 8% Madrid
31% Retail Park 6% 4%
Supermarket Asturias
3% Offices 30% 1%
Other Murcia
(1) To expiry of lease (4.5 years to break)
Note: All data as at 30 September 2018
RETAIL MARKET OVERVIEW JANUARY 2019 3
SPAIN PORTFOLIO PROFILE
9
4%
1 El Faro 10 Marismas de Polvorín
2 Bahía Sur 11 Edificio Alcobendas
4 11%
3 Los Arcos 12 Mérida
4 Vallsur 13 Villanueva
11
7 5 Habaneras 14 Pinatar Park
8% 17
16 23%
6 Granaita SC 15 Motril
12 10% 7 Parque Oeste de Alcorcón 16 Mejostilla
1
13 8 Granaita RP & LC 17 Ciudad del Transporte
5
9 Parque Principado 18 Edificio Bollullos de la Mitación
1%
3 18 14
10 6 8
43%
15
2
(1) Parque Oeste comprises two adjacent properties that were acquired in two separate
companies, but has been treated as a single combined property for reporting purposes
Property rank by value
(2) La Serena comprises two adjacent properties that were acquired in two separate
companies, but has been treated as a single combined property for reporting purposes
% Geographic profile by value
Note: All data as at 30 September 2018
RETAIL MARKET OVERVIEW JANUARY 2019 4
TOP 10 ASSETS 1/3
EL FARO BAHÍA SUR LOS ARCOS
GAV €161.5M €119.5M €114.3M
PROVINCE Badajoz Cadiz Seville
GROSS LETTABLE AREA 43 423m² 24 760m² 17 906m²
MONTHLY RENTAL €16.70/m² €24.72/m² €32.28/m²
SECTOR Shopping Centre Shopping Centre Shopping Centre
WALE 3.9 years 1.3 years 3 years
VACANCY 2.4% 1.9% 5.7%
Note: All data as at 30 September 2018
RETAIL MARKET OVERVIEW JANUARY 2019 5
TOP 10 ASSETS 2/3
VALLSUR HABANERAS GRANAITA SC
GAV €85.2M €85.2M €59.8M
PROVINCE Valladolid Alicante Granada
GROSS LETTABLE AREA 35 211m² 24 158m² 27 913m²
MONTHLY RENTAL €14.71/m² €17.80/m² €10.70/m²
SECTOR Shopping Centre Shopping Centre Retail Park
WALE 10.1 years 4.6 years 2 years
VACANCY 2.9% 4.2% 2.2%
Note: All data as at 30 September 2018
RETAIL MARKET OVERVIEW JANUARY 2019 6
TOP 10 ASSETS 3/3
PARQUE OESTE ALCORCON(1) GRANAITA RETAIL PARK PARQUE PRINCIPADO MARISMAS DEL POLVORIN
GAV €52.7M €34.1M €32.8M €29.1M
PROVINCE Madrid Granada Asturias Huelva
GROSS LETTABLE AREA 13 604m² 18 508m² 16 396m² 20 000m²
MONTHLY RENTAL €15.69/m² €9.24/m² €9.52/m² €7.37/m²
SECTOR Retail Park Retail Park Retail Park Retail Park
WALE 4.2 years 7 years 4.9 years 3.3 years
VACANCY Fully Let Fully Let Fully Let Fully Let
(1) Parque Oeste comprises two adjacent properties that were acquired in two separate companies, but has been treated as a single combined property for reporting purposes
Note: All data as at 30 September 2018
RETAIL MARKET OVERVIEW JANUARY 2019 7
SALES & E-COMMERCE
*SPANISH SALES PER ACTIVITY IN SCs (1) **SPANISH E-COMMERCE / RETAIL CATEGORIES (2)
FASHION 0.1% Only 4.8% of total sales transactions are done online in
-0.8%
Spain (vs 9% average across EU)
1.5%
ACCESSORIES 1.1%
1.4%
Pure retail (excluding event tickets, transport etc)
FOOD THE SPANISH DIFFERENCE
2.9% comprises c. 29% of total online sales
4.0%
HOUSEHOLD GOODS 2.8%
Spain unlikely to experience similar
3.8%
negative impact as in the UK & US
SPORTS & SPECIALITY 1% Health & Beauty
4.0%
3% Electronics RETAIL Spanish culture keenly geared
-2.6%
ELECTRONICS -2.4% 1% Department Stores 29% towards socialising, eating out –
3.2% 7% Enterteinment Spanish consumers spend the highest
SERVICES 1.3%
4% Leisure proportion of their budgets on eating
3.8%
LEISURE 1.0%
1% Hosehold out in Europe
2% Services
2.7%
FOOD & BEVERAGE 4.3% 1% Restaurants Favourable weather conditions and
1.1% 7% Fashion tourism also encourage increased
GENERAL REST OF
0.8%
2% Food F&B and Leisure offerings
CATEGORIES
71% Others
Average 2016-2017 2018 Q1 71%
* Source: “¿Qué le pasa a la moda?” report 2018 CBRE
** Source: Retail Market Presentation Jan’19 Savills Aguirre Newman
RETAILERS LANDSCAPE SPANISH MARKET March 2019
RETAIL MARKET OVERVIEW JANUARY 2019 9
FOOD CATEGORY
Discount supermarkets (Mercadona, Aldi, Lidl) growing faster than rest of market as consumers are MERCADONA HAS UPGRADED THEIR STORES IN
more cost sensitive HUELVA, VILLANUEVA AND MERIDA –
CURRENTLY UPGRADING STORE AT GRANADA
Discount retailers save consumers around €900 per annum on average in Spain
Consumers are visiting supermarkets less frequently but are spending more per visit AM TEAM IN DISCUSSIONS WITH KEY RETAILERS
TO IMPROVE FLOOR SPACE ACROSS THE
Consumers placing most emphasis on health benefits when shopping at supermarkets – key brands PORTFOLIO
offering more “bio” products in store
ALL MAJOR BRANDS ARE PERFORMING VERY
WELL ACROSS CASTELLANA’S PORTFOLIO
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
MERCADONA 31% CARREFOUR 1 (44%) 14,093 m2
CARREFOUR 14% MERCADONA 4 (37%) 12,045 m2
LIDL 6% ECONOMY CASH 1 (8%) 2,446 m2
ALCAMPO 3% MAXI DIA 1 (5%) 1,483 m2
EROSKI 3% ALDI 1 (3%) 1,100 m2
Lettable Area m2 (% for this category) Units
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018
RETAIL MARKET OVERVIEW JANUARY 2019 10
BEAUTY & HEALTH CATEGORY
Although hard hit by the crisis, health & beauty sector is showing strong signs of recovery
Rising incomes of female and adult consumers have led to sales growth for H&B retailers
Many new brands have entered the market with in-shop prices equivalent to online prices
Health & Beauty retailers are creating in-store customer experiences
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
PRIMOR 9% PRIMOR 4 (27%) 1,480 m2
DRUNI 7% MARVIMUNDO 1 (11%) 622 m2
SEPHORA 4% DOUGLAS 2 (9%) 478 m2
STRONG RELATIONSHIPS HAVE
CLAREL 4% KIKO 4 (8%) 422 m2
RESULTED IN TOP BRANDS LETTING
BODYBELL 3% DRUNI 1 (8%) 415 m2 LARGER BOXES AND INCREASING IN-
DOUGLAS 2% CENTROS UNICO 3 (4%) 245 m2 STORE PRODUCT OFFERINGS
PERF. JULIA 2% POEMA 1 (4%) 217m2
INCREASING HEALTH & BEAUTY
CENTROS UNICO 2% YVES ROCHER 3 (4%) 213 m2
OFFERINGS RESULTS IN INCREASED
KIKO MILANO 2% JEAN LOUIS DAVID 2 (3%) 163 m2 FOOTFALL IN PREVIOUSLY LOW TRAFFIC
RITUALS 2% NYX 1 (2%) 128 m2 AREAS
Lettable Area m2 (% for this category) Units
35 DIFFERENT BRANDS OCCUPY 56
UNITS ACROSS CASTELLANA PORTFOLIO
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018RETAIL MARKET OVERVIEW JANUARY 2019 11
CINEMA CATEGORY
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
Strong and resilient cinema-going culture in
Spain CINESA 36%
12.1 million visits to the cinema in December YELMO CINES 25%
(highest single month figures in 9 years)
YELMO 1 (100%) 2,282 m2
Cinema operators are trending towards KINEPOLIS 10% CINES
opening premium, luxury cinemas with a
OCINE 8%
higher number of screens per cinema complex
High quality cinemas positively impact footfall, FULL 3%
dwell time and cross selling in shopping Lettable Area m2 (% for this category) Units
centres
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018
YELMO CINEMAS HAVE RECENTLY OPENED
A LUXURY CINEMA COMPLEX IN VALLSUR
WHICH HAS SIGNIFICANTLY INCREASED
FOOTFALL TO THE CENTRE
AM TEAM IS PLANNING NEW CINEMA
OPENINGS ACROSS THE PORTFOLIORETAIL MARKET OVERVIEW JANUARY 2019 12
FASHION & ACCESSORIES CATEGORY
TOP FASHION BRANDS WISH TO
EXPAND THEIR STORES IN LOS
Fast fashion enable consumers to purchase the same amount of clothing at the same or lower price
ARCOS, BAHIA SUR AND HABANERAS
Climate change is affecting retailers ability to manage inventory levels
AM TEAM CONSISTENTLY FOCUSED
Spanish consumers are following global trends by dressing less formally at work and home
ON ADDING NEW, UNIQUE FASHION
Large flagship stores, click & collect and pure-play retailers are a large focus of retailers in the sector OFFERINGS TO ITS PORTFOLIO
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
ZARA 5 (12%) 8,869 m2
ZARA 12%
H&M 4 (11%) 7,887 m2
PRIMARK KIABI 4 (9%) 6,770 m2
9%
PRIMARK 1 (5%) 3,996m2
H&M 5% MERKAL 5 (5%) 3,910 m2
C&A 2 (5%) 3,515 m2
STRADIVARIUS 4% BERSHKA 5 (4%) 3,256m2
STRADIVARIUS 5 (3%) 2,223 m2
MANGO 4%
MASSIMO DUTTI 4 (3%) 2,130 m2
Lettable Area m2 (% for this category) Units
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018RETAIL MARKET OVERVIEW JANUARY 2019 13
DIY CATEGORY
Iberian DIY sector continues to grow apace. Forecasted to reach 4.68 billion in sales in 2018 (+5.8%
from 2017)
Leroy Merlin/AKI merger will consolidate into a large player
Bricodepot has announced that they are exiting the Spanish market
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
IKEA 41% AKI 5 (51%) 19,231 m2 STRONG RELATIONSHIPS WITH ADEO GROUP DUE
TO LARGE PRESENCE IN CASTELLANA PORTFOLIO
BRICOR 1 (29%) 10,937 m2
LEROY MERLIN 37%
CURRENTLY IN NEGOTIATIONS TO TRANSFORM
BRICOMART 1 (19%) 7,051 m2 ALL AKI UNITS INTO LEROY MERLIN ACROSS THE
BRICOMART 6%
PORTFOLIO
CADENA 88 1 (0.4%) 161 m2
AKI 5% THE FIRST POP-UP IKEA STORE IN SPAIN HAS
IKEA 1 (0.2%) 68 m2
OPENED IN HABANERAS – IKEA TRADING WELL
BRICODEPOT 4% SO HAS EXTENDED THEIR LEASE AND LOOKING TO
ROLL OUT IN MORE LOCATIONS
Lettable Area m2 (% for this category) Units
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018RETAIL MARKET OVERVIEW JANUARY 2019 14
FOOD & BEVERAGE
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
Spaniards expend the highest MC DONALD’S 18% BURGER KING 9 (26%) 5,616 m2
portion of their budget on eating BURGER KING 11% FOSTER HOLLYWOOD 6 (9%) 2,038 m2
out in Europe.
FOSTER’S HOLLYWOOD 6% MUERDE LA PASTA 2 (7%) 1,507 m2
Spanish culture, tourism, LA TAGLIATELLA 6% CITY WOK 1 (5%) 1057 m2
favourable weather contributes to
VIPS 4% LA TAGLIATELLA 2 (4%) 969 m2
strong performance of F&B
TELEPIZZA 3% 100 MONTADITOS 7 (4%) 871 m2
High consumer demand has
DOMINO’S PIZZA 3% POMODORO 2 (4%) 855 m2
resulted in attractive rental levels
GINOS 2% EL FOGON DE MARIANA 3 (3%) 622 m2
Fast - casual restaurant concepts
KFC 2% GINOS 2 (3%) 618 m2
have seen the most number of
openings in Spain in 2017 IKEA RESTAURANT 1% TACO BELL 2 (3%) 613 m2
Lettable Area m2 (% for this category) Units
F&B HAS BECOME ARE LARGE FOCUS AREA FOR THE AM TEAM
F&B OFFERING WILL BE EXPANDED AND IMPROVED IN LOS ARCOS,
EL FARO, VALLSUR AND BAHIA SUR
F&B OFFERINGS HAVE INCREASED DWELL TIME FOOTFALL AND
CROSS-SELLING SYNERGIES ACROSS THE CASTELLANA PORTFOLIO
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018RETAIL MARKET OVERVIEW JANUARY 2019 15
ELECTRONICS CATEGORY
AM TEAM HAS SUCCESSFULLY RESIZED
Top electronics retailers highly focused on omnichannel strategies (online & physical stores) ELECTRONICS STORES AND RE-LET TO
Physical premises act as a point of sale, showroom and click and collect ADDITIONAL RETAILERS TO IMPROVE TENANT
MIX AND INCREASE RENTALS
Retailers are reducing GLA per store by 30% on average
Electrodepot looking to increase their store network in Spain STRONG RELATIONSHIPS HAVE RESULTED IN
PORTFOLIO EXPOSURE TO BEST-OF-BREED IN
SECTOR WITH FAVOURABLE LEASE TERMS
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
MEDIAMARKT 60% MEDIAMARKT 4 (65%) 17,743 m2
FNAC 13%
WORTEN 4 (23%) 6,290 m2
WORTEN 8%
ELECTROCASH 3 (10%) 2,582 m2
SATURN 4%
ELECTROFACTORY 1 (2%) 478 m2
MILAR 2%
Lettable Area m2 (% for this category) Units
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018RETAIL MARKET OVERVIEW JANUARY 2019 16
SPORTING GOODS CATEGORY
Sportswear trend is gaining strength driven by trends towards healthy living and less formal attire.
Sports goods grew by 5% in 2018, up to 5.1 billion
Sector has benefitted from changing fashion trends towards more comfortable and casual attire and a
desire for a more healthier lifestyle
*MARKET SHARE IN SPAIN **TOP RETAILERS BY GLA FOR CPS
SPRINTER 7 (43%) 11,814 m2
DECATHLON 49%
DECATHLON 1 (26%) 7,046 m2
RETAILERS ARE REQUESTING
SPRINTER 4% FORUM SPORT 2 (11%) 2,990 m2
INCREASED GLA TO SECURE THEIR
INTERSPORT 2 (6%) 1,622m2 MARKET SHARE BECAUSE OF HIGH
NIKE 4% COMPETITION IN THE SECTOR
STOCKER 1 (4%) 1,150 m2
ADIDAS 3%
DECIMAS 4 (3%) 891 m2
SPORTING GOODS OFFERING WILL BE
JD SPORTS 2 (2%) 600m2 EXPANDED IN BAHIA SUR, LOS ARCOS
DECIMAS 3% AND VALLSUR
OTEROS 3 (2%) 564 m2
Lettable Area m2 (% for this category) Units
* Source: GFK Consumer Wallet from Jan – Dec 2018 (sample of 70,000 buyers. Purchases done by credit card in the stores)
** Source: Castellana Property Portfolio Sept’2018RETAIL MARKET OVERVIEW JANUARY 2019 17
KEY STRATEGIC OBJECTIVES OF REPOSITIONING PROJECTS AND ASSET MANAGEMENT INITIATIVES
CREATE ONE-STOP QUALITY VALUE-ADD ACCRETIVE
EXPERIENCES SHOPPING NODE ENHANCEMENT PROJECTS ACQUISITIONS
Improvement of leisure offering Creation of single shopping Each capex project will Asset management team are Investment team are
at Granaita Leisure centre node in Granaita through improve quality of external constantly analysing the portfolio constantly analysing new
integration of three adjacent and internal finishes for opportunities to improve the opportunities to:
Enhancing leisure and F&B retail centres (Retail park, tenant mix and create additional
offering on top floor of shopping centre and leisure Projects will improve natural income and value though • Increase exposure to key
Habaneras centre) to offer our customers light and overall look and feel tenants to improve
unparalleled choice to for the customer • Splitting low rent boxes to re-tenant relationships and
Improving F&B and leisure increase dwell time and at higher rentals performance of portfolio
activities in Bahia Sur, Los enhance cross selling Should lead to increased
• Introduction of new and better • Secure high quality assets to
Arcos and El Faro by synergies rentals and higher valuations
retailers into the centres enhance income and
introducing more fast and high- improve portfolio quality
end dining experiences
• Lease up of vacant units
• Find opportunities where
Castellana asset
management can add
additional value and income
• Organic growth through
increasing ownership of
existing high performance
assetswww.castellanasocimi.es
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