Retail sales and rents in designer outlet centres are continuing to grow and are actually benefitting from the economic downturn, according to the CEO of McArthurGlen European Development, Gary Bond.
McArthurGlen has a portfolio of 17 designer outlet centres totalling 400,000 sq m (4 305 564 sq foot) and is opening a further five centres, totalling 126,000 sq m (1 356 252 sq ft) , in Venice, Berlin, Naples, Salzburg and Athens by the end of 2010.
Speaking to Property Week at MAPIC, Bond said its designer outlet centres were thriving in the current economic downturn:
‘Sales in designer outlets centres continue to grow while sales on the high street fall – it’s counter-cyclical. It was the same pattern that was seen in the US during the last economic downturn. When money gets tight people look to designer outlet centres for discounted branded goods.’
Bond said rents in its outlet centres were ‘very stable’ and in many cases growing as its rents are linked to store turnover combined with a base rent that also has fixed uplifts.
Bond said that McArthurGlen would seek to open two new outlet centres a year on top of the five that are currently under development.
‘They have to be in locations that have a high brand awwreness, high brand presence on the high street, good spending power and a large catchment - ideally three million people within a 60 minute journey time.’
He added that he was particularly keen to open new designer outlet centres in the south of France, Germany and Spain, while also exploring the potential in Moscow and Turkey.