MAPIC: Europe could house 300 new designer outlets centres

There are currently estimated to be 145 outlet centres across Europe, but GVA Grimley Outlet Services claims there is potential to develop a further 150 within the European Union and another further 150 across the rest of Europe.

Speaking at MAPIC, Brendon O’Reilly, director of GVA Grimley Outlet Services, said that consumer and retailer demand outweighed the supply of outlet centres across Europe.

This demand, he explained, came from mature tenants seeking new markets; new entrants seeking an outlet strategy to get them into the marketplace; consumers looking for value at a good price; and investors and developers creating strong outlet offers.

O’Reilly said that the UK is reaching saturation point but that southern European countries still had room for growth.

He added that emerging countries in eastern Europe, such as Russia and Ukraine, offered ‘huge growth potential’.

O’Reilly added that central and eastern European also provided potentially attractive prime yields ranging from 7.5% in Poland to 12% in Ukraine and 15% in Russia - compared to just under 6% in the UK.

According to GVA Grimley Outlet Services, prime rents for new units in markets like Russia and the Ukraine were €9.5 (£8) - €10.8 9 (£9.10) sq m compared to just under €9 (£7.60) sq m in the UK.

O’Reilly added: ‘The designer outlet sector is booming across Europe with good returns for investors, an increasing demand from retailers for more outlets and a growing consumer market as those that strive for quality are looking for it at an affordable price. It has a rosy long-term outlook which is impressive when most other areas of retail are feeling the pinch.’