Outlet retailing in emerging markets - Value Retail News

Outlet retailing 

in emerging 

markets 

Plus: 

32 European FOCs planned 

Berlin doubles its GLA 

Sales, footfall still hot 

Nile Stock Red Tags 

Asia’s immense outlet power 

Simon starts in Malaysia 

And much, much more… 

BErLin 

Expansion

ALBERTA FERRETTI 

ARMANI 

BALLANTYNE 

BLUMARINE 

BOTTEGA VENETA 

BRIONI 

BROOKS BROTHERS 

BULGARI 

BURBERRY 

COSTUME NATIONAL 

DAMIANI 

DOLCE & GABBANA 

ERMENEGILDO 

ZEGNA 

ESCADA 

ETRO 

FENDI 

GUCCI 

HUGO BOSS 

JIL SANDER 

JOHN RICHMOND 

KENZO 

LA PERLA 

MARNI 

MISSONI 

MONCLER 

MULBERRY 

PAUL SMITH 

POLO RALPH LAUREN 

PRADA 

ROBERTO CAVALLI 

SERGIO ROSSI 

TAG HEUER 

TRUSSARDI 

VALENTINO 

VERSACE 

joy 

comes from improving 

your cashflow 

Our 19 designer outlet villages across Europe offer the world’s 

leading brands to over 75 million customers a year, representing 

the most profitable way to sell excess stock in a stylish environment. 

And our programme of expansion means we have room for more. 

To find out how we can help your business improve cashflow, 

contact Victor Busser on +44 (0)20 7535 2300 or 

v.busser@mcarthurglen com www.mcarthurglengroup.com 

Please visit us at MAPIC, 

November 17-19th 2010 

in Cannes, France.

PAGE 4 PAGE 14 

PAGE 18 

STAFF 

PETEr ShArPE 

ICSC ChaIrman 

International Outlet Journal is a publication for the 

non-U.S. factory outlet industry. Copyright © 2010 

In s I d e 

4 Nine FOCs open in Europe this year 

8 32 FOCs on the drawing boards 

10 Expansions: Berlin, Prague 

12 Performance: FOCs still robust 

14 ICSC Research: Poland’s strength 

18 ICSC Research: China’s FOCs 

22 Simon breaks ground in Malaysia 

23 Japan: expansions, acquisitions 

24 Nilestock: Egypt’s new entry 

26 Summer’s music magic 

28 MCG and RCA form partnership 

30 Leasing updates, staff news 

32 Industry trade group columns 

CONTENTS 

Vol. 6 no. 4 FALL 2010 

MArCuS WiLd 

ICSC ChaIrman, EUrOPEan 

advISOry bOard 

MiChAEL P. KErChEVAL 

ICSC PrESIdEnt and CEO 

rudOLPh E. MiLiAn, SCSM, SCMd 

ICSC SEnIOr vP 

iCSC EurOPE 

London, +44 20 7976 3100 

icsc.europe@icsc.org 

iCSC/iOJ 

2519 n. mcmullen booth rd. 

Suite 510-356 

Clearwater, FL 33761 

+1 727 781 7557 

LindA huMPhErS 

Editor in Chief ext. 3 

lhumphers@icsc.org 

rAndy GdOVin 

art director ext. 4 

rgdovin@icsc.org 

KArEn KnOBELOCh 

advertising Prod. mgr. ext. 2 

kknobeloch@icsc.org 

SALLy STEPhEnSOn 

Senior advertising Executive 

+1 847 835 1617 

Fax: +1 847 835 5196 

sstephenson@icsc.org 

Advertiser index 

Fashion house ..................................... bC 

Globe Outlets ........................................ 15 

Gva Outlets ............................................. 5 

henderson Global Investors ............... IbC 

mcarthurGlen ......................................IFC 

neinver ................................................. 11 

nilestock .............................................. 17 

value retail ............................................ 7 

vrn directories .................................... 25 

vrn/IOJ ................................................ 27 

FALL 2010 INTeRNaTIoNal ouTleT JouRNal 3

CENTER OPENINGS 

Nine european FoCs 

opened in 2009-2010 

McArthurGlen’s newest european outlet center, La Reggia Designer Outlet, opened 

in the Naples market in February. 

riverside Place in Kendal, England, is a total reconstruction of a former outlet center 

that first opened in 1995. 

4 INTeRNaTIoNal ouTleT JouRNal FALL 2010 

5 phase 1 projects 

totaling 1.1 million sf 

opened in ’09; 4 in 

‘10 totaled 650,000 sf. 

By LindA huMPhErS 

Editor in Chief 

imagine this: Of the nine phase 

1 outlet centers that opened in the 

last two years in Europe, two are 

sparkling new concepts built on the precise 

sites of failed centers that opened 

before their time. 

In June 2009, Henderson Global 

Investors and McArthurGlen opened 

Designer Outlet Berlin, an architecturally 

delightful retail village. It was built on 

the precise site of the former B5 Designer 

Outlet, which Hammerson developed 

in 2000 as a gloomy two-level mall that 

never achieved a tenancy that shoppers 

thought was worth the drive. 

Henderson and McArthurGlen 

refused to refer to their new Berlin 

project as a re-opening for the simple 

reason that it wasn’t. Only the site 

remained the same, and this year the 

project more than doubled with the 

opening of its second phase (see page 

10 for the full story). 

In 1995 Guinea Group opened a 

tiny, 25,000-sf outlet center in the 

beautiful and mountainous lakes region 

of Cumbria, England, and named 

their project K Village in honor of the 

nearby town of Kendal. Although 

the center had no problems with retail 

sensitivity, it also didn’t have enough 

retail density to be successful. In 2007 

K Village was demolished. 

In July, the new center, now 118,000 

sf and part of a residential, leisure, 

office and retail complex, opened 

as Kendal Riverside. More than 80 

(Continued on page 6)

expertise 

Nobody knows Outlets better 

Current projects in: 

• Bulgaria • Czech Republic • Denmark • Germany 

• Hungary • Italy • Poland • Romania • Russia • Serbia 

• Slovenia • Spain • Switzerland • Ukraine 

For more information please contact: 

Brendon O’Reilly, 

Director, GVA Grimley Ltd. 

+44 (0)7831 381 405 

brendon.o’reilly@gvagrimley.co.uk 

www.gvagrimley.co.uk/outlets

CENTER OPENINGS 

(Continued from page 4) 

percent leased at opening, tenants include 

Clarks, Alexon, Double Two, Klass, 

Lakeland Leather, ProCook, Whittards 

of Chelsea, Pavers, Staccatos, All Wellan 

Good, The Works, Mountain Warehouse, 

Bedeck, Cotton Traders, Domo, Denby, 

Julian Graves and Cadbury. 

Guinea Group is still part of the 

development team, though without its 

long-time champion John Drummond, 

who died in July 2009. CUSP, Kendal 

Riverside and Junction One are the 

other JV partners who spent six years 

completing the project. 

One other phase 1 project – Designer 

Outlet Salzburg – was a conversion of an 

existing full-price center that’s 20 minutes 

from the Salzburg city center and one kilometer 

from the airport. McArthurGlen 

did the reconstruction of the mall – the 

only project in the phase 1 bunch that 

wasn’t new construction – for the mall’s 

owner, Vienna Insurance Group. 

McArthurGlen’s La Reggia Designer 

Outlet in Naples, which opened in February, 

and Norwegian Outlet’s eponymous 

center near Oslo, which opened 

in June, are the only two phase 1 centers 

that weren’t developed as joint ventures. 

While outlet centers are rarely developed 

as enclosed malls in the U.S., one-third of 

the new projects that opened in Europe 

in the last two years are enclosed: Sofia 

Outlet Center in Bulgaria, Kendal Riverside 

and Designer Outlet Salzburg. Gloucester 

Quays Outlet Centre in England is a combination 

of a mall and a village. c 

European Phase 1 Outlet Center Openings for 2009-2010 

Name CITy CouNTRy opeNINg gla DevelopeRS leaSINg CompaNy 

designer Outlet Salzburg Salzburg austria Sept., 2009 301,000 mcarthurGlen, mcarthurGlen 

vienna Insurance Group 

Gloucester Quays Outlet Centre Gloucester England may, 2009 220,000 Gloucester Quays, Elysian Property 

Peel holdings and british Waterways Consultancy 

designer Outlet Berlin berlin Germany June, 2009 104,000 henderson Global Investors, mcarthurGlen 

mcarthurGlen 

Citta Sant’Angelo Village Pescara Italy Sept., 2009 236,500 Promos Srl, Promos Srl 

Citta Sant’angelo village S.p.a. 

Alpenrhein Outlet Village Landquart Switzerland nov., 2009 228,399 InG real Estate, Gva Outlets InG real Estate 

Sofia Outlet Center Sofia bulgaria march, 2010 177,077 Gva Outlets, Gva Outlets 

K & K Engineering 

riverside Place Kendal England July, 2010 75,000 Kendal riverside Ltd/Junction One, rohleder Lumby 

retail Cusp & Guinea Group 

La reggia designer Outlet naples Italy Feb., 2010 279,760 mcarthurGlen mcarthurGlen 

norwegian Outlet vestby norway June, 2010 118,400 norwegian Outlet norwegian Outlet 

9 CEnTErS 7 COunTriES 1,740,136 


Gloucester Quays, which includes 220,000 sf of outlet tenancy, has been celebrated as 

one of the premier reconstruction projects in England. 

inG real Estate’s Alpenrhein Outlet Village opened in late 2009 in one of Switzerland’s 

most beautiful resort areas. 

Source: Value Retail News

© Value Retail PLC 2010 

THE 

Chic Outlet Shopping® 

VILLAGES 

Discover Europe’s leading luxury outlet shopping experience, 

created and operated by Value Retail www.ChicOutletShopping.com 

Bicester Village, London • La Vallée Village, Paris • Fidenza Village, Milan 

Las Rozas Village, Madrid • La Roca Village, Barcelona • Ingolstadt Village, Munich 

Maasmechelen Village, Brussels / Düsseldorf • Wertheim Village, Frankfurt • Kildare Village, Dublin 

Alexander McQueen, Anya Hindmarch, Armani, Bally, Burberry, Calvin Klein, 

Carolina Herrera, Celine, DKNY, Diane von Furstenberg, Diesel, Dior, Dolce & Gabbana, Dunhill, 

Ermenegildo Zegna, Façonnable, Givenchy, Gucci, Hugo Boss, Jimmy Choo, La Perla, Loewe, Loro Piana, 

Marni, Matthew Williamson, Max Mara, Mulberry, Paul Smith, Polo Ralph Lauren, Salvatore Ferragamo, 

Smythson, TAG Heuer, Tod’s, Valentino, Versace and many more 

RUN BY RETAILERS AND SERVING RETAILERS 

19 BERKELEY STREET, LONDON W1J 8ED, ENGLAND +44 (0)1869 323 757 WWW.VALUERETAIL.COM

NEW OWNERSHIP 

Developers plan to open 

32 FOCs in near future 

Neinver’s Factory la Coruna, Spain 

promos’ Timisoara outlet village, Romania 


Statistics indicate 

new phase 1 centers 

are getting bigger. 



Ten European developers are 

planning to open 23 new phase 1 

outlet projects between 2011 and 

2013. In the unlikely event they all open 

on time, or that they all actually open, 

the new projects will add about 5.45 

million sf of outlet GLA to the European 

total, now 28.8 million sf. Another 

nine planned outlet projects that haven’t 

nailed down their opening dates would 

add an additional 1.9 million sf to the 

European total. 

By year, 14 centers totaling 3.4 million 

are scheduled to open in 2011; eight 

totaling 1.8 million in 2012 and one 

totaling 215,278 sf in 2013. 

The average size of the 23 planned 

projects with opening dates is 236,932 

sf, compared to 207,908 sf, the average 

size of Europe’s existing 131 outlet 

centers. 

All the planned phase 1 centers are to 

be new construction rather than reconstructions. 

c 

Planned Phase 1 Outlet Centers Without specified opening dates 

CEnTEr CiTy COunTry GLA dEVELOPEr 

Factory Outlet Centre Soltau (FOC Soltau) Soltau Germany 107,600 GVA Outlets, Mutschler Developments 

roncade Outlet Gallery Venice (Treviso) Italy 269,100 Lefim S.p.A. 

FAShiOn hOuSE Outlet Centre Chelyabinsk Chelyabinsk Russia 215,000 GVA Outlets, Fashion House Development 

FAShiOn hOuSE Outlet Centre Kazan Kazan Russia 215,000 GVA Outlets, Fashion House Development 

FAShiOn hOuSE Outlet Centre nizhniy novgorod Nizhniy Novgorod Russia 215,000 GVA Outlets, Fashion House Development 

FAShiOn hOuSE Outlet Centre novosibirsk Novosibirsk Russia 215,000 GVA Outlets, Fashion House Development 

FAShiOn hOuSE Outlet Centre Omsk Omsk Russia 215,000 GVA Outlets, Fashion House Development 

FAShiOn hOuSE Outlet Centre Perm Perm Russia 215,000 GVA Outlets, Fashion House Development 

Andalucia Village Outlet Centre Andalucia Spain 259,200 GVA Outlets, Kennedy Group Properties 

Total planned GLA 1,925,900 sf 

Source: Value Retail News

Sanoux’ Nailloux Fashion village, France 

23 Planned Phase 1 Outlet Centers 

Opening between 2011 and 2013 

CEnTEr CiTy COunTry OPEninG GLA dEVELOPEr 

Freeport Outlet Village, Le Cannet Nice (Le Cannet des Marures) France 2011 269,100 Freeport 

roppenheim The Style Outlets Strasburg (Roppenheim) France 2011 292,800 MAB Development 

nailloux Fashion Village Toulouse (Nailloux) France 2011 333,100 Sanoux SCI 

Gronau Fashion Outlet Gronau Germany 2011 140,000 Stable International 

Development BV 

Wiedemar Fashion Outlet Leipzig (Wiedemar) Germany 2011 167,800 Stable International 

Development BV 

Athens designer Outlet Athens (Yalou) Greece 2011 227,000 McArthurGlen, 

Bluehouse 

Development SA 

Cilento Outlet Village Eboli Italy 2011 252,700 Promos Srl 

Pisa Outlet Village Pisa Italy 2011 193,500 Promos Srl, 

Crespina 

Investimenti, SRL 

FACTOry Krakow Krakow Poland 2011 236,800 Neinver S.A. 

FACTOry Warsaw Annopol Warsaw Poland 2011 150,700 Neinver S.A. 

FAShiOn hOuSE Outlet Centre Moscow Moscow Russia 2011 419,800 GVA Outlets, Fashion 

House Developments 

Belgrade Outlet Centre Belgrade Serbia 2011 324,000 GVA Outlets, HVAC 

Design 

Ljubljana Outlet Village Ljubljana Slovenia 2011 300,000 GVA Outlets, RED 

Real Estate Dev 

FACTOry La Coruna Culleredo (La Coruna) Spain 2011 135,600 Neinver S.A. 

honfleur The Style Outlets Honfleur France 2012 193,800 MAB Development 

Montabaur Fashion Outlet Frankfurt (Montabaur) Germany 2012 135,000 Stable International 

Development BV, 

Ralph Dommermuth 

Immobilien GmbH 

designer Outlet neumunster Hamburg (Neumunster) Germany 2012 215,000 McArthurGlen 

Algarve The Style Outlets Faro Portugal 2012 247,600 Neinver S.A. 

FAShiOn hOuSE Outlet Centre Bucharest East Bucharest East Romania 2012 253,000 GVA Outlets, Fashion 


Timisoara Outlet Village Timisoara Romania 2012 268,800 Promos Srl 

FAShiOn hOuSE Outlet Centre St. Petersburg St. Petersburg Russia 2012 389300 GVA Outlets, Fashion 


d1 Fashion Outlet Bratislava Slovakia 2012 88,776 IPEC Group 

Le Village des Alpes Geneva France 2013 215,278 Bergerac Estates 

Limited, Rioja 

Developments Ltd/ 

RJ McKinney Ltd. 

Total planned GLA 5,449,454 sf 

If we’ve missed your planned center, please send details to LHumphers@icsc.org Source: Value Retail News 


EXPANSION UPdATES 

Berlin expansion doubles the value 

international fund 

manager Henderson 

Global Investors and 

McArthurGlen, owner and 

manager of designer outlets, 

opened the second phase of 

Designer Outlet Berlin in 

September. 

The 8,500-m 2 expansion 

more than doubles the size 

of the €122 million project, 

bringing it to 16,500 m 2 . 

Like all other McArthur- 

Glen schemes, Designer 

Outlet Berlin is set within a 

village atmosphere, reflecting 

the architecture of the 

local Berlin/Brandenburg 

area and offering its visitors 

a unique shopping and 

leisure experience. 

The new brands are expected to 

complement the existing brands in phase 

1, which include such top brand names 

as Adidas, Calvin Klein, Daniel Hechter, 

Marc O’Polo, Nike, Replay, St. Emile, 

Strenesse and Tommy Hilfiger, all of 

which operate their own units. 

The 8,000-m 2 first phase of Designer 

Outlet Berlin opened in June 2009. 

Since then, more than a million customers 

have visited the center, underscoring 

the importance of Germany to the 

outlet sector. 

David Williams, fund manager of the 

European Outlet Mall Fund at Hender- 


son Global Investors, says, “The German 

outlet market has a lot of potential 

and is key for our investment strategy.” 

Gary Bond, McArthurGlen’s CEO for 

European Development, says: “Germany 

is a key market for McArthurGlen; it is 

Europe’s biggest country in terms of 

population and economic wealth, as 

well as having a strong brand culture 

and a well-developed fashion industry. 

Designer Outlet Berlin may be our first 

Designer Outlet in Germany, with our 

second opening in Neumünster near 

Hamburg in 2012, but the German consumer 

is one that we know well from our 

Designer Outlets Roermond 

and Salzburg, both situated 

on the German border.” 

The two phases of 

Designer Outlet Berlin are 

linked by an elliptical open 

space, a feature in its own 

right with seating, restaurants 

and landscaping, that is an 

ideal venue for open-air 

events. Other features include 

the Panda Kids Club as well 

as 2,300 parking spaces. 

Designer Outlet Berlin is 

located at the intersection 

of the B5 motorway with 

the A10, the Berlin ring 

road, at Wustermark, north 

of Potsdam, the capital of 

Brandenburg, and less than a 

30-minute drive from Berlin 

city center. In April, a new public bus 

service was launched enabling customers 

to travel from the center of the German 

capital to Designer Outlet Berlin in less 

than 30 minutes. 

Nearly 6 million residents live within 

a 90-minute drive of the outlet village. 

In addition, Berlin is Germany’s No. 1 

tourist destination, attracting more than 

7.5 million visitors a year. 

Germany currently has the lowest rate 

of designer outlet space in Western Europe, 

with 0.9 m 2 of outlet space per 

1,000 inhabitants compared with 10 m 2 

in the UK and 8.3 m 2 in Italy. c 

Czech center’s expansion is on schedule 

The 7,000-m 2 second phase of 

Fashion Arena, an outlet center 

that opened in Prague, Czech 

Republic in 2007, will open on Oct. 14. 

Officials say that construction, which 

started in March, is ahead of schedule 

due to cooperative weather this summer. 

“The walls and roof are up and the 

shop fronts are being installed,” says 

Graham Coxhead, whose C-REAM 

Consulting company is advising the 

project’s developers, TK Development 

and LMS Outlets, along with general 

contractor, GEMO Olomouc. 

As the €6.3 million expansion nears 

Since opening in June 2009, Henderson Global Investors’ 

Designer Outlet Berlin has had more than a million visitors, 

underscoring Germany’s pent-up demand for outlet shopping. 

completion, GVA Outlets leasing team is 

rapidly filling the new GLA. Originally 26 

shops were planned for the expansion, but 

demand has pushed the number to 37. 

“Both phases are attracting interest,” 

says GVA’s head of leasing David 

Carver, “as the outlet sector as a whole 

continues to be a very buoyant leasing 

marketplace. This is continued proof 

that during the difficult recession hitting 

Europe the outlet sector is still healthy 

and a very important and profitable 

route to market for brands.” 

Among the 65 tenants in the 18,000-m 2 

phase 1 are Nike, Adidas, Mango, Levis, 

Puma, Lee/Wrangler, Pepe Jeans, Gardeur, 

Pietro Filipi, Samsonite, Reebok, Mariella 

Burani Factory Store, Marc Picard, Gas, 

Jet Set, Salamander, Park Avenue, Umbro, 

Home & Cook, Retro Jeans, Converse, 

Dyrberg/Kern, Ecco, Mexx, and Tchibo. 

Another 25 tenants will join phase 2, 

thus completing the center. 

Fashion Arena Outlet Center is 

adjacent to the Prumyslovà and the 

Sterboholskà Radiàla speedway, only 25 

minutes from the Prague city center. It 

has a catchment of 3.8 million within a 

two-hour drive and is easily accessible by 

road or metro. c

OUTLET PERFORmANCE 

Chic Outlet Villages 

continue sales boom 

FOr ThE SECOnd quarter 2010, gross 

sales at Value Retail’s nine outlet villages 

increased by 20 percent year-to-date for 

the portfolio. Footfall has increased by 12 

percent and comp-store sales growth by 

13 percent (an increase on Q1 results by 2 

percent). And spend per visitor strengthened 

by 8 percent during the second quarter, 

according to Frank Blanchette, retail 

and marketing director for the developer. 

Sales were driven, Blanchette says, 

“largely by an increase in the number of 

international customers visiting the villages 

and by favorable EU exchange rates. 

In the first six months of the year, total 

tax-refunded sales for the nine villages 

grew by 60 percent against 2009 results.” 

The percentage of turnover from taxrefunded 

sales at the villages continues 

to grow at just under 10 percent annually, 

he says, adding that portfolio-wide, sales 

from the Chinese market are growing by 


76 percent year-to-date and from the 

Russian market by 98 percent. 

“Shoppers from both Southeast Asia 

and the Middle East also contributed 

significantly to this increase in spend per 

visitor and our overall business,” he says. 

new tenants helping to drive positive sales at Junction One Outlet Shopping Centre in 

Antrim, N. Ireland, include Alexon, Holland & Barrett, Kitchen & Gift Outlet and Quiz. 

Junction One celebrates 

6th year of opening 

ThE 250,000-SF Junction One outlet 

center celebrated its birthday this summer 

with a number of new tenants, signaling 

the center’s strong performance 

in a difficult retail trading climate. 

Center manager Leona Barr said, 

“Junction One continues to perform 

robustly and I’m delighted that at the 

end of our 6th year of trading, sales 

The biggest spenders at Value Retail’s centers – including Las Rozas Village near 

Madrid – are from the U.S., who make purchases that total an average of €322 per visit. 

were up on previous years and undoubtedly 

recent new signings will help us to 

maintain this strong level of trading.” 

Junction One, located in Northern 

Ireland just 20 minutes from Belfast, 

has attracted more than 17 million visitors 

since its 2004 opening. The center 

is owned by CUSP, the Kennedy Group 

and Dunalastair (Ireland) Ltd. c 

“Each village achieved individual growth 

of over 20 percent in tax-refunded sales. 

Collectively, the average transaction for 

tax-refunded sales was €293.” 

The biggest spenders at Value Retail’s 

centers are from the U.S., he says, with 

an average spend of €322 per visit, an increase 

of 6 percent compared to Q4 2009. 

Blanchette cites Value Retail’s ability 

to keep its eye on the prize as the reason 

for the villages continuing strength. 

“We focus on the fundamentals of our 

business and every aspect of our operating 

model,” he says. “Our primary goal is to 

drive the performance, productivity and 

positioning of our nine existing villages.” 

Blanchette says the Value Retail team 

actively remerchandises its centers and 

continually enhances marketing and 

communications through social media, 

tourism initiatives, travel trade partnerships 

and media partnerships. 

He adds, “We have taken significant 

steps to improve the quality of our 

shopping experience, the hospitality we 

extend to our customers and the quality 

and sophistication of the services we 

provide, including valet parking, shopping 

bag porter services, GiftCards and 

concierge services.” 

In addition, Value Retail has launched 

a luxury coach service to and from its 

nine Chic Outlet Villages. The coaches 

will pick up and deliver shoppers to the 

city centers nearest each outlet village. 

The shuttles will operate in partnership 

with excursion/coach operators, including 

Cityrama (Paris), Madrid Shopping 

Tour (Madrid), and JJ Kavanagh (Dub-

lin). Tickets can be booked online. The 

online booking platform is available in 

11 languages (English, French, Spanish, 

Catalan, Italian, Flemish, German, 

Japanese, Russian, Arabic and Simplified 

Chinese), and bookings can be made up 

to 48 hours prior to departure. 

Galleria sees 

Bank holiday 

Sales boost 

LAnd SECuriTiES’ Galleria in Hatfield, 

near London, posted impressive 

sales during the August Bank Holiday 

weekend. The 320,000-sf enclosed Galleria 

saw a 6 percent increase in retail spend 

compared with the August Bank Holiday 

weekend 2009, with many retailers reporting 

record sales. The leisure offering at 

the center, which includes an Odeon 

Cinema, saw an 18.7 percent increase on 

last year’s figures, resulting in a 10 percent 

overall increase in sales at the center. 

Footfall also rose during The August 

Bank Holiday weekend with a 7 percent 

increase compared to last year. The rise in 

footfall was the result of a successful roller-skating 

rink that was open to the public 

throughout the entire weekend break. 

Deepan Khiroya, Retail Portfolio 

Director for Land Securities, comments: 

‘It’s clear that there remains a strong demand 

for the discounted high-end goods 

the outlet sector provides…I think this 

is a reflection of the entertainment and 

leisure offering that complements the 

customer shopping experience.’ 

3 Fd centers 

show growth; 

4th set to open 

FAShiOn diSTriCT, which operates 

three outlet centers in Italy, reports substantial 

increases in both sales and footfall 

for the first half of 2010 compared 

to the same period in 2009: 

l Mantova Outlet has recorded an 11 

percent increase in footfall and a 13 percent 

increase in comparable store sales 

l Valmontone Outlet had a 3 percent 

increase in footfall and a 5 percent increase 

in comparable store sales 

l Molfetta Outlet recorded a 5 percent 

increase in footfall and a 10 percent 

increase in comparable store sales 

Because of increased marketing efforts, 

the number of international shoppers 

also greatly increased at the Fashion 

District centers: 

4 +207 percent at Mantova, mostly 

Germany tourists 

4 +81 percent at Valmontone, 

driven by Russian visitors 

4 +195 percent at Molfetta, mostly 

Turks from cruise ships that stop at Bari 

Robust sales indicate 

Park Ave.’s stability 

PArK AVEnuE in Bilbao, Spain, also 

has a new set of tenants, once again 

underscoring the marketing and 

retailing success of the 200,000-sf 

center. 

Like-for-like sales for June at the 

center increased by 31 percent at the 

three-year-old scheme developed by 

Resolution Property and managed by 

Jones Lang LaSalle. 

“We started the year on a high as we 

announced increased sales and footfall 

figures for the second consecutive year 

and we’re delighted that Park Avenue 

continues to grow from strength to 

strength,” says Michel Nangia, senior 

Helping Fashion District centers 

attract shoppers are such amenities as 

Rainbow MagicLand, set to open at Valmontone 

in spring 2011. At Molfetta, 

visitors are drawn to the cinema, a Giant 

Earth park and to the nearby Go Parc, 

which is one of the largest indoor gocart 

tracks in Europe. 

Fashion District will open it’s newest 

center, Fashion District Melilli Outlet 

on Nov. 11. The scheme, which is the 

first outlet center in Sicily, is a 30-minute 

drive from Catania. c 

resolution Property says its proactive, hands-on management style is one reason its 

200,000-sf Park Avenue in Spain has posted a 31 percent increase in like-for-like sales. 

manager at Resolution Property. 

“Lettings on this scale indicate that a 

degree of stability is returning to the 

retail market. 

“Whilst the Spanish market and 

in particular, the Basque Country, 

remains a challenging environment, 

we believe that our proactive, handson 

asset management approach has 

established Park Avenue as a sought 

after location where leading operators 

want to trade,” he says. “We 

remain committed to working proactively 

with our retailers to ensure we 

offer our customers the best possible 

shopping experience.” c 


ICSC RESEARCH 

Excerpted from iCSC’s 2010 retail Property insights, Vol. 17, no. 1. 

poland keeps growing 

as economy improves 

Poland isn’t immune 

to the economy but 

has weathered the 

storms quite well. 

By MAŁGOrZATA GAJuK 

Poland, the sixth-largest country 

in the European Union (EU) and 

the largest country in Central and 

Eastern Europe (CEE), has prospered 

beginning with the fall of communism 

in 1989 and further since joining the EU 

in 2004. Its economic growth rate, as 

well as the limited stock of modern retail 

space, provided fertile ground for the 

development of shopping centers. 

Although unemployment has risen overall, 

it has remained relatively low in major 

cities, and retail sales have not fallen dramatically. 

As a result, shopping center development 

has slowed but has not ceased. As 

the Polish economy improves, the industry 

should rebound and further new developments 

are likely to be rolled out. 

poland’s vital Statistics 

Poland is a sizable consumer market 

with 38.1 million inhabitants, but it is not 

heavily urbanized, and Warsaw, its capital, 

is the only city with over a million inhabitants. 

Officially, Warsaw has 1.7 million 

residents in the city itself, with 2.5 million 

living in the greater Warsaw area. However, 

not all residents register with the authorities, 

and it is estimated that a further 

500,000 to 700,000 people live in the city. 

After Warsaw, city populations tail 

off significantly. The next-largest cities 

are Krakow (754,000 residents), Lodz 

(744,000), Wroclaw (632,000), Poznan 

(556,000), Gdansk (456,000) and Szczecin 

(406,000). The majority of the Polish 

population resides in much smaller cities, 

towns and villages, with nearly 40 percent 

of the population still living in rural areas. 

Remarkably, in 2008 and 2009, Poland 

dodged the recessionary bullet, reflecting 


The five-year-old Factory Wroclaw, 145,300 sf, was the second of Neinver’s three 

outlet projects in Poland. 

its relatively limited dependence on international 

trade, low levels of private sector 

debt, strong domestic consumption and 

monetary and fiscal actions that cushioned 

the impact of the global financial crisis. 

Despite strong economic growth, 

inflation has remained moderate, having 

peaked at 4 percent in April 2009 

and down to 3.5 percent at the end of 

2009. Inflation is expected to fall to 2.5 

percent by the end of 2010. 

In the years after the fall of communism, 

Poland, like other countries in 

CEE, suffered high unemployment, 

peaking at 20 percent in 1993. Although 

the economic downturn has caused 

unemployment to hit 11.9 percent at 

the end of 2009, the smaller towns and 

rural areas suffer the most. The unemployment 

rate for the largest cities has 

remained at a very low level; for example, 

it stands at 2.7 percent in Warsaw, 

2.9 percent in Poznan, 4.7 percent in 

Wroclaw and 3.9 percent in Krakow. 

Underscoring its resilience during the 

global downturn, year-on-year retail 

sales growth in Poland remained the 

strongest within the EU in 2009, at 5.7 

percent in July, 5.2 percent in August, 

2.4 percent in September, 2.1 percent in 

October and 7.2 percent in December. 

Retail development in poland 

The construction of hypermarkets 

and contiguous small shopping centers 

by the large international hypermarket 

chains remained the main driver of retail 

development during the rest of the 1990s. 

International hypermarket chains opening 

stores in Poland included Tesco, Auchan, 

Carrefour, Real, Geant/Casino and Ahold. 

The majority of these schemes were 

simple single-story developments incorporating 

a hypermarket with a sales 

area of 8,000 to 17,000 sq m and a small 

gallery of inline stores, frequently singleline 

or double-line opposite the center’s 

hypermarket. 

The next stage of retail evolution involved 

the construction of larger shopping 

centers by such developers as Plaza, Echo 

Investment (a Polish company), Simon 

Ivanhoe, TriGranit, TK Development, 

Polimeni, Apsys, GTC and Mayland Real 

Estate. The second generation of shopping 

centers comprised two to three levels 

and frequently 100 to 200 units, including a 

hypermarket or a supermarket. 

More recently developers such as ING 

Real Estate Development, ECE and 

Parkridge have developed city-center 

shopping centers without hypermarket 

(Continued on page 16)

FPO

ICSC RESEARCH 

Tenants at Fashion House Outlet Centre Warsaw, which opened in 2005, include Levi’s, Mango, Nike, Puma, Reebok and Tommy Hilfiger. 


anchors and with a higher provision 

of high quality fashion and luxury 

stores, as well as leisure facilities. Many 

outdated first- or second-generation 

shopping centers have been or soon will 

be expanded and refurbished. 

Other centers are rejuvenating themselves 

by replacing local tenants with 

well-known international brands. Significant 

shopping-center development 

occurred across Poland from 2005 to 

2008, and with it came a strong inflow 

of international retailers, particularly 

fashion retailers from Western Europe. 

Development of new downtown 

shopping centers introduced brands 

such as Aldo, Body Shop, Claire’s, Ecco 

Kids, Fabrikant, Guess and Hard Rock 

Café. Redevelopment of traditional high 

streets brought luxury brands like Burberry, 

Escada, Ermenegildo Zegna, Hugo 

Boss, Emporio, Armani and Max & 

Co. Other international retailers include 

Marks & Spencer, Zara/Inditex Group, 

H&M, Sephora, Esprit, Benetton, Mexx 

and Mango. 

However, the current market downturn 

has resulted in some notable 

bankruptcies among Polish retailers, 

including Monnari, Pabia, Molton, Roy, 

Galeria Centrum, Deep, Hot Oil, Vabbi 

and Reporter. Some of these concepts 

did not work and some just could not 

generate sufficient sales and earnings in 

a weak economy. Others faced problems 

securing the bank financing they needed. 

But even during this difficult period 

there were new entrants to the market 

such as Zara Home, TJ Maxx, S. Oliver, 

Gerry Weber, Pandora, Carpisa, New 

Look, Ann Christine, Avanti, Tezenis, 

Coyoco, Charles & Keith, Starbucks 

Coffee and Peacock. 


modern retail space 

At the end of the second quarter 

2009, modern retail space – defined as 

traditional shopping centers, retail parks 

and factory outlet centers – totaled 6.35 

million sf of GLA in cities of more 

than 100,000 residents. 

Over 71 percent of the space is in 

the eight major metro areas comprising 

Warsaw, Krakow, Lodz, Poznan, Wroclaw, 

Tri-city, Katowice and Szczecin. The remaining 

29 percent of modern retail space 

has been developed in medium-sized cities 

of 100,000 to 400,000 inhabitants. 

The global financial crisis has caused a 

slowdown in the pace of retail real-estate 

development in Poland, but Jones Lang 

LaSalle estimates that the entire Polish retail 

market (including towns with less than 

100,000 inhabitants) will still grow by some 

further 24 million sf of GLA by the end of 

2011. This new space includes 19 million 

sf for traditional shopping centers, about 3 

million sf for retail parks and the remaining 

500,000 sf for outlet centers. 

The most promising markets for 

future retail developments are Warsaw, 

Tri-City and Katowice Conurbation. 

Among the smaller towns Lublin, Torun, 

Elblag, Radom, Kielce, Kalisz, Olsztyn 

and Szczecin are still underserved in 

terms of modern retail formats and may 

absorb new concepts. 

The majority of modern retail stock 

in cities with over 100,000 inhabitants 

consists of traditional shopping centers. 

Altogether there are 225 traditional 

shopping centers occupying over 5.78 

million sq m of GLA. Retail parks account 

for only 8 percent of Poland’s 

total modern retail supply and account 

for some 5 million sf of GLA. 

Inter Ikea introduced the retail park to 

Poland as it developed its stores in major 

metro areas. Recently other developers 

such as Helical, Ires and TK Development 

developed smaller retail parks adjacent to 

already established shopping centers. 

In terms of outlet centers, only 

six schemes have opened so far, 

occupying almost 90,000 sq m of 

GLA. Two developers, Neinver and 

Fashion House Development, are 

active in this segment. 

Some 69 percent of traditional shopping 

centers are located in the eight major 

metro areas of Warsaw, Krakow, Wroclaw, 

Poznan, Lodz, Tri-City, Katowice Conurbation 

and Szczecin. Smaller cities with 

populations between 100,000 and 200,000 

inhabitants boast a higher share of the 

shopping center market than larger cities of 

between 200,000 and 400,000 inhabitants. 

New shopping centers have continued 

to open during the economic downturn. 

In 2009, 12 schemes opened fully leased, 

reflecting the resilience of the Polish economy 

and the absence of market saturation. 

International retailers and domestic 

retail chains continue to look for further 

expansion opportunities in Poland given 

that many of its markets are not yet 

saturated. This bodes well for the development 

of further shopping centers as 

the economic recovery takes hold and as 

credit becomes more plentiful. 

Given that Poland’s recession was milder 

and shorter than those in many other 

markets, these opportunities may manifest 

themselves sooner rather than later. c 

Małgorzata Gajuk is Research & 

Concept Manager for ING Real Estate 

Development. She is also the Research 

Specialist for the Polish Council of 

Shopping Centers and is a member of 

ICSC’s European Research Group. She 

can be reached at malgorzata.gajuk@ 

ingrealestate.com or +48 22 222 44 34.

ASIA 

The rise of FoCs 

in mainland China 

Brand recognition and 

quality standards have 

changed dramatically in 

China since 1949. 

By XinGO JiAnG and 

yiQun WAnG 

The opening of the Chinese retail 

industry in the 1990s attracted 

a limited number of world-class 

brands from developed nations. Since 

then, foreign brands have gained a 

reputation for fashion and high quality. 

Chinese private manufacturing companies 

have taken notice and started to 

imitate these foreign brands. 

China’s middle class came into existence 

around the year 2000. Not satisfied with 

domestic clones, it started to purchase 

foreign-branded products – a preference 

undoubtedly furthered by middle-class 


shoppers who wore these brands in many 

business situations. As a result, international 

uni-brand stores expanded rapidly 

all over China. Examples include Mango, 

which currently has 68 stores and Nike, 

which had 3,179 as of June 2010. 

The first factory outlet center in China, 

Beijing Yansha Outlets, opened in 2002. 

The term “outlets,” borrowed from English, 

translates phonetically as ào-tè-lài-sī. 

These outlet centers are usually located in 

rural or occasionally in tourist locations. 

Value Retail News, a publication of 

ICSC, defines an outlet center as “one 

with at least 50 percent outlet tenancy.” 

Few Chinese outlet centers meet this 

standard. Instead of being operated by 

manufacturers, most factory outlet centers 

in China are run by different levels 

of distributors, licensees and franchisees 

with one thing in common: they 

all offer deep discounts not present in 

traditional retail centers. 

In other words, they are likely to be 

The 1.5 million-sf Beijing Scitech Premium Outlet Mall, which opened in 2009, is already 

ranked high with shoppers. 

more value-oriented than strictly outletoriented. 

From the Chinese consumer’s perspective, 

a typical factory outlet center should 

sell high-end discounted foreign-branded 

apparel and accessories. For domesticbranded 

apparel, furniture, electronics 

and other specialty items, most consumers 

tend to go to a traditional department 

store or a wholesale market, where they 

can find more discounts and greater possibilities 

for negotiating prices. 

However, not all outlet centers in China 

meet the expectations of middle-class 

consumers. Distressed shopping center 

owners, desperate to lease their vacant 

spaces and attract shoppers, have stretched 

the term and thus lowered the image of 

the factory outlet industry in China. In 

brief, because of different definitions and 

concepts of factory outlet centers in mainland 

China, the demand and supply for this 

relatively new center type are unique to the 

country. Potential developers, retailers and 

investors should be fully aware of these 

special challenges and opportunities. 

Demand-side factors 

Demographics: How widespread is 

China’s middle class? The average of 

most estimates would place it around 15 

percent. Every 1 percent increase in this 

income group, which equals 14 million 

people, is equivalent to a midsized nation. 

International retailers who understand 

this rising economic power have made 

China a major part of their international 

expansion. Examples include KFC, whose 

2,100 restaurants in 450 cities make China 

the firm’s second-largest market after the 

United States, and the French Carrefour, 

whose 157 centers in 46 cities have 

transformed China into its fourth-largest 

market of the French-based retailer. 

Purchasing power: Chinese middleclass 

customers have a strong desire 

for heavily discounted foreign branded 

products, even when prices are relatively

Shanghai Quingpu Outlets, 1.2 million sf, was opened in 2006 by semi-state-owned Bailian Group. 

expensive. For customers in major urban 

areas, outlet centers fit their income and 

spending levels. A typical city in the wealthy 

eastern part of China has an average annual 

disposable income (ADI) per capita of between 

€800 to €3,100 with about 5 percent 

to 10 percent spent on apparel, according 

to the National Bureau of Statistics. 

Supply-side factors 

Facts and numbers: There are at 

least 28 existing outlet centers and 18 

planned projects in China today. Onethird 

of these are village-style, while 

the others are big boxes, enclosed malls 

or part of larger mixed-use projects. 

Most range in size from 161,000 sf to 

1.3 million sf of gross space. In terms 

of location, 80.9 percent directly serve 

megacities (up to 4 million people) while 

7.1 percent serve big cities (up to 1 million 

people). In addition, 40.4 percent of 

the documented are in urban areas, while 

the others are in suburbs. 

Developers: Developers’ backgrounds 

vary significantly, with 54.8 percent 

of the centers built by international 

investors or joint-ventures such as Horizon 

Group Properties from the U.S., 

Foxtown from Switzerland, Kosmall 

from South Korea, Richly Field from 

Hong Kong, and Taiwan Pacific Group; 

16.7 percent by semi-state-owned 

companies such as Beijing Youyi Group, 

Bailian Group, and Eurasia Group; and 

16.7 percent by traditionally-residential 

developers. Other developers include 

local manufacturing companies. 

urban versus rural settings 

Considering that many Chinese middleclass 

customers do not own cars, factory 

outlets tend to be located closer to urban 

centers with access to public transportation. 

Most Chinese FOCs stay away from 

business centers to avoid competition 

with traditional retailers. For example, 

Meilanhu Outlets is located in the northern 

suburb of Shanghai, which is the last 

stop of Subway Line 7; Beijing Yansha 

Outlets is located on a ring road, in a 

convenient but not fashionable shopping 

area; and Hangzhou EX Outlets occupies 

a multi-level building left over from an 

urban exposition event. 

geographic distribution 

New factory outlet centers are growing 

rapidly in northern, eastern and central 

western China but not in the wealthiest 

southern part, Guangdong province. 

Cities such as Guangzhou and Shenzhen 

have few outlet centers open or in the 

pipeline. One reason is that the southern 

part of China itself has been a world-famous 

apparel wholesale center for a long 

time. Another reason is that high-end 

customers can easily access Hong Kong 

for more fashionable goods, better shopping 

environments and a more favorable 

consumption tax as well as tariff. 

Foreign participation 

Foreign participation is also high, with 

54.8 percent of developers having international 

backgrounds. Consumer expectations 

of foreign-branded products 

require developers to have international 

experience, especially in leasing and 

management. Domestic outlet developers 

often actively approach foreign 

investors and professional agencies to 

form joint ventures. 

Developer watch list 

At least six developers own or plan to 

build two or more outlet centers. Bailian 

Groups, which already owns Shanghai 

Qingpu Outlets, plans to build another in 

the Yangtze Delta area (most likely Haining) 

in 2011. Beijing Youyi owns Yansha 

Outlets in Beijing and one in Harbin, in 

(Continued on page 20) 


ASIA 


northeastern China. Taiwan Pacific Group 

owns the West Outlets in Chongqing and 

two in the southern cities of Wuhan and 

Xiamen. Richly Field and Outlets China 

Ltd. are aggressively acquiring land for 

expansion. Their first centers may open as 

early as the fourth quarter of 2010. 

Horizon Group Properties recently 

formed a joint venture in China. Three 

pieces of land are under their control 

and five additional tracts are under consideration 

for outlet development. 

riChLy FiELd ChinA says its 

Changsha Globe Outlets is well on 

its way to opening in March 2011 and 

that negotiations with a wide range of 

prospective tenants are under way. 

Richly Field China has formed a 

partnership with U.S. outlet developer 

Horizon Group Properties to ensure 

that more than 80 percent of the tenants 

will be international brands. With 

Horizon Group, Richly Field plans to 

aggressively expand its retail facilities 

all over rapidly-growing China. Three 

unnamed sites are under control and 

more additional sites are under study. 

Construction of the project began in 

March this year, with the first phase 

of 75,000 m2 and 250 shops scheduled 

for completion next spring. 

Located in Changsha, the capital 

city of Hunan Province in Central 

China, the outlet center is only 30 


Development and operations 

Land acquisition: Mainland China 

nationalized all urban land in 1949. Until 

now, most large-scale development projects 

required the developer to acquire 

land directly from the government. All 

land acquisitions are basically land leases, 

with those for retail development typically 

running for 40 years. 

There are two main ways to acquire 

land in China: public land bidding or 

public bidding with special requirements. 

Most outlet developers can acquire lands 

Construction of Changsha Globe Outlets began in March, with the 800,000-sf first 

phase set to open in spring 2011. 

Richly Field moving fast to open outlets 

minutes from downtown and 40 minutes 

from the airport. The site is 

accessible from more than three 

regional highways and adjacent to 

the largest concentration of high-end 

villa communities in Hunan Province. 

It will draw from the 16 million residents 

living within a one-hour drive. 

Aiming to be the biggest outlet center 

in Central China, Globe Outlets 

could become a new landmark of 

Changsha city, which is already 

booming with construction projects 

and tourism. 

Globe Outlets is counting on 

Changsha’s brand-conscious residents-known 

to be fascinated with 

popular culture and fashion, particularly 

luxury and designer goods – to 

shop at the outlet project. More than 

80 percent of the brands at Globe 

Outlets will be international c 

through a competitive price, because local 

prefecture or county-level governments 

favor the potential consumption taxes 

generated by retail developments. 

Leasing and operations: Most factory 

outlet centers have combined net 

leases and percentage leases. For example, 

Shanghai Quingpu Outlets signed a limited 

number of net leases in the early stage 

of its development. All newer contracts 

feature percentage leases. A typical cost of 

a net lease of an outlet center in coastal 

China (Beijing, Shanghai, Hangzhou and 

Suzhou) ranges from €7.80 to €17.50 per 

square foot. A typical percentage lease of 

a factory outlet center in the same region 

ranges from 8 percent to 16 percent. A 

few developers also sell the outlet properties 

to investors or for owner occupancy, 

such as Changshu Outlets, Jiangsu Wanhe 

Outlets and Tongxiang Outlets. 

Initially, almost all factory outlet center 

developers in China established their 

own subsidiary management companies 

instead of hiring professional companies. 

However, since most centers have 

had problems leasing all their space, 

developers have increasingly turned to 

professional leasing agencies. 

Current situation: Although operational 

data as vacancy rates and 

customer satisfaction figures are not 

yet available for Chinese outlet centers, 

online resources such as the popular 

shopping review website dianping.com, enable 

comparisons. Customers have created 

hundreds of thousands of ratings, 

reviews, and photos for most centers. 

This ranking matches feedback from 

several industry experts the authors 

interviewed. The top five outlet centers in 

China today are Shanghai Quingpu Outlets 

(89 points), Beijing SciTech Outlets 

(85 points), Beijing Yansha Outlets (82 

points), Hangzhou EX Outlets (66 points) 

and Chongqing West Outlets (64 points). 

Chengdu MGS Outlets wasn’t rated due to 

the lack of reviewers on dianping.com. 

Not surprisingly, four of the top five 

outlet centers have been built by companies 

with a strong retail development 

background. Qingpu Outlets developer 

Bailian Group owns 15 departmentstores, 

six shopping centers, 2,000 supermarkets 

and 1,200 convenience stores. 

SciTech Outlets developer PCD Stores 

owns 15 luxury department stores across 

China. Yansha Outlets developer Youyi 

Group is the first state-owned department

store owner to be converted into a Sinoforeign 

joint venture. West Outlets developer 

Taiwan Pacific Group has more than 

20 department stores throughout mainland 

China and Taiwan. The only outlet center 

to have a developer without an extensive 

background in retail is Hangzhou EX 

Outlets, which hired numerous local and 

national retail experts to keep the project 

moving forward. 

Challenges 

Supply channels and sourcing: The 

Chinese outlet industry has not yet developed 

an efficient supply chain. Thus, this 

multi-layer of distributors, licensees and 

franchisees is preventing the deep discounts 

so common in the American and European 

factory-outlet industry. Another result that 

puzzles consumers: two stores opening with 

the same brands in one outlet center. 

Aspects of design: Lack of experience 

has resulted in design mistakes for 

some factory outlet centers. To achieve 

a high floor-area ratio, some developers 

designed village-style centers with 

multiple stories. Unfortunately, neither 

tenants nor customers were willing to go 

upstairs. Some developers ignored the 

frequently extreme weather conditions 

in certain northern areas and adopted 

outdoor village-style outlet centers, which 

made it difficult to attract consumers 

during harsh winters and sandstorms. 

Also, parking spaces are often underestimated. 

Shanghai Qingpu Outlets proposed 

only 1,000 parking spots in phase 

1, which turned out to be inadequate 

for the demand. Now, it has opened all 

possible corridors and internal spaces for 

consumers to park cars, especially on the 

weekends. 

Poorly conceived projects: Some 

Chinese factory outlet centers today are 

the result of economically unsound development 

in the commercial real-estate 

sector in the last 10 years. Some suburban, 

rural-retail and mixed-use projects – 

unable to attract enough tenants to open 

– borrowed the hot concept of outlets 

to facilitate leasing and draw shoppers. 

Such projects are usually not located near 

highway exits. 

Built for flipping: Realizing the popularity 

of factory outlet centers throughout 

China, some residential developers 

and private equity firms began building 

outlet centers for short-term sales. This 

common practice typically begins with a 

One of China’s coastal properties, the 530,000-sf Suzhou CS Heshun Outlets was 

opened in 2007 by CSLand. 

huge marketing campaign for a grand 

opening, followed by contracting with 

small investors who are convinced of 

high returns. The reality, however, is 

that such projects were usually poorly 

designed and later became empty 

spaces. This phenomenon has negatively 

affected the reputation of the factory 

outlet industry in China. 

Bait and switch: As mentioned previously, 

outlet developers often acquire 

land at a favorable price through public 

bidding with specific requirements. Some 

developers hold the land vacant for 

several years and flip it to others at the 

market rate. Similarly, some developers 

have tried to acquire a large piece of land 

with a promise to build an upscale outlet 

center, but the real plan is to convert the 

majority of the area into residential and 

office development for a quick sale. 

Windows of opportunity 

Despite all the challenges faced by the 

Chinese factory outlet industry, many 

reputable retail developers are continuing 

to expand. There are two main driving 

forces: the market and governmental 

support. The expectation for continued 

growth in consumer spending, stronger 

demand for high quality and fashionable 

goods, the increasing number of car 

owners, and the fast-growing transportation 

infrastructure are all positive signals 

for new factory outlet developments. 

In addition, governmental land regulations 

are maturing and becoming more 

transparent, which will address many of 

the above-mentioned issues. Securing 

governmental support is vital to real-estate 

development in China. A real factory 

outlet developer deserves such support, 

especially since the central government 

has been trying to stimulate domestic 

spending for several years. 

These factors offer the factory outlet 

center industry in China a window of 

opportunity, not only for developers, 

but also for retailers, investors and 

other service agencies. c 

Xingu Jiang is a founding member 

of Pahang Real Estate Consulting, 

adjunct professor of commercial real 

estate at Tsinghai University School of 

Continuing Education, and the author 

of three books about retail real estate. 

He is the chief planner on some 80 

projects, including such outlet projects 

as Shanghai Qingpu Outlets, 

Hangzhou EX Outlets, Suzhou Outlets, 

and on planned projects in Beijing, 

Ningbo and Changsha. 

yaqui Wang is a graduate student 

at New York University’s Scheck 

Institute of Real Estate and formerly 

a research intern at the International 

Council of Shopping Centers. During 

his years in China, he was involved 

in every Chinese factory outlet project 

served by Pahang Real Estate 

Consulting, with a focus on feasibility 

studies and leasing. 


mALAYSIA 

Planned outlet grabs 

Malaysians’ attention 

Local media fancies 

the first outlet project 

in Malaysia, which is 

just one hour from 

Singapore’s city center. 

The groundbreaking ceremony 

for the first outlet center in Malaysia 

– Johor Premium Outlets -- 

was about as big a deal as anyone could 

imagine. Press coverage was extensive, 

both in print and on television, assuring 

that the center’s progress and opening 

will be closely watched. 

The project is a joint venture between 

the Genting Group and Simon Property 

Group, the largest publicly held real 

estate company in the U.S. Simon is also 

the parent of Premium Outlets, which 

operates 60 upscale outlet centers in the 

U.S., Japan, Korea and Mexico, totaling 

more than 20 million sf. 

The 175,000-sf phase 1 of the upscale 

outlet is set to open in the second 

half of 2011. 

The center’s 44-acre site is at the intersection 

of the North-South Expressway 

and the Second Link Expressway. With the 

Bandar Indahpura, Kulai-Second Link Expressway 

Interchange scheduled to open in 

October next year, Johor Premium Outlets 

will be easily accessible to all traffic going 

to and from Johor and Singapore. The site, 

about an hour’s drive from the city center 

of Singapore, is a short drive from Senai 

International Airport and about three 

hours from Kuala Lumpur. 

The €37 million project will have 80 

to 90 tenants, 3,000 parking spaces and 

30 tour bus bays. The center is conveniently 

located between Resorts World 

Genting to the north and Resorts World 

Sentosa to the south, enabling Johor 

Premium Outlets to attract shoppers 

from Genting’s leisure and hospitality 

properties in this region. 

Genting Berhad, its subsidiaries and 


The groundbreaking in 

August for Johor Premium 

Outlets has caught the 

Malaysian press’ attention 

in a big way. 

affiliates operating under 

the Genting name, is 

recognized as one of Asia’s 

leading and best managed 

multinational companies. 

Five public companies 

operate under the 

Genting name: Genting 

Berhad, its subsidiaries 

Genting Malaysia Berhad, 

Genting Plantations 

Berhad and Genting 

Singapore, as well as its 

affiliate, Genting Hong 

Kong, with a combined 

market capitalization of 

about €24 billion. 

These public companies and their 

subsidiaries and affiliates are involved in 

various businesses, including leisure and 

hospitality, power generation, oil palm 

plantation, property development, biotechnology, 

and oil and gas. Collectively, 

they have more than 58,000 employees, 

4,500 hectares of prime resort land and 

about 133,000 hectares of plantation land. 

The leisure and hospitality business 

operates under various banners, includ- 

ing Resorts World, Maxims, Crockfords, 

Awana, Star Cruises and Norwegian 

Cruise Line. In addition to its joint venture 

with Premium Outlets, Genting also has 

JVs with Universal Studios, Hard Rock 

Hotel and other international brands. 

Simon Property Group owns or has 

an interest in 373 retail properties comprising 

256 million sf in North America, 

Europe and Asia. SPG is publicly traded 

and employs more than 5,000 people 

worldwide. c

toki expansion opens 100% full 

ThE 62,000-SF Third phase of Toki 

Premium Outlets opened 100-percent 

leased with 37 tenants on July 14. The 

center, which now totals 293,000 sf, is 

one of eight outlet projects developed 

by Chelsea Japan. Simon Property 

Group’s Premium Outlets division owns 

40 percent of the joint venture, with 

Mitsubishi Estate and Sojitz Corp. owning 

the other 60 percent. 

Toki, which opened in 2005, is 45 kilometers 

northeast of downtown Nagoya 

City, within the Toki Plasma Research 

Park. Chelsea Japan’s other Premium Outlet 

centers are in Gotemba, Ibaraki, Kobe- 

Osaba, Rinku, Sano, Sendai and Tosu. 

The tenant line-up for Toki phase 3 

includes three eateries plus a few relocations 

from phases 1 and 2. c 

Toki phase 3 tenants include: Free’s Shop Last Call 

31 Sons De Mode * 

Adidas Sport Style * 

BCBG Max Azria 

Billabong 

Birkenstock 

Bloom 

Ciaopanic 

Dou Dou 

Fossil 

Journal Standard 

Laundry 

Lowrys Farm 

Madras 

Moussy 

New Balance 

Paul Smith Underwear * 

LaSalle buys 2nd Japanese FOC 

Gap and Samsonite are among the tenants at Nasu Garden Outlet, which was recently 

acquired by LaSalle Investment Management. 

Toki Premium Outlets has drawn crowds of shoppers since its opening day five years 

ago, one reason the newest expansion opened 100 percent leased. 

Pearly Gates Last Call 

Rienda 

Rodeo Crowns 

Sealy Bed * 

Sly 

Spick and Span 

Sylvanian Families 

T-Fal 

* First outlet store in Japan 

LASALLE inVESTMEnT Management 

acquired its second Japanese outlet 

project, Nasu Garden Outlet in the 

Tochigi Prefecture in August. The 

111-tenant center is on the northern 

perimeter of Greater Tokyo. LaSalle 

Asian Opportunity Fund III purchased 

the center from Daiwa Land Group for 

an unspecified sum. 

LaSalle has said it believes that 

Japanese real estate is undervalued 

and has been acquiring Tokyo-area 

office buildings, condominiums, warehouses 

and retail centers. The fund 

reportedly plans to increase revenue in 

the two-year-old Nasu Garden Outlet 

by expanding the center and adding 

amenities. Nasu is one of Japan’s 

famous summer resorts. 

The LaSalle fund also owns the 

Chitose Outlet Mall in Hokkaido. c 


NILESTOCk 

Nile Stock, Red Tags 

set the pace in egypt 

The need to liquidate 

excess product is a 

familiar story among 

outlet retailers. 



Almost every outlet chain 

has sprung to life because of 

its company’s overstocks, and 

Cairo-based Red Tags is no exception. 

And like most new outlet chains, Red 

Tags’ journey into the sector started 

long before its first store ever opened. 

The 25-year-old Nile Tricot, a wellknown 

Egyptian textile maker and producer 

of some of the finest, softest pullovers 

in the world, restructured around 

10 years ago. That’s when the new CEO, 

Mahmoud Kamal, discovered warehouses 

loaded with years of unsold stock. 

Like apparel manufacturers throughout 

the world, Nile Tricot was better at 

creating a quality garment than marketing, 

producing or selling it. Eventually 

the company, faced with the need to 

rent even more warehouse space, began 

slashing prices to liquidate the mountains 

of excess inventory. 

Warehouse liquidations led to the 

opening of the first Nile Stock store in 

the Mohandeseen region of Cairo in 

1999. Today there are five Nile Stock 

stores ranging from 240 m 2 to 520 

m 2 throughout the 1,100-year-old city. 

Each carries branded overstocks for 

the mass-market shopper, with goods 

displayed by style rather than by brand. 

The average price point in Nile Stock 

is €5, and the minimum markdown is 

40 percent. 

About 70 percent of Nile Stock’s 

goods are sourced from factories, including 

Nile Stock’s parent company, and the 

remainder come from local distributors 


nilestock, a five-unit outlet chain in Egypt, grew from the need to liquidate excess 

goods produced by the Kamal family’s Nile Tricot textile company. 

and franchisees. Brands include Adidas, 

Banana Republic, Carter’s Childrenswear, 

Levi’s, Puma and Timberland. 

Nile Stock’s owner and operations 

manager Ibrahim Kamal, Mahmoud 

Kamal’s son, explains, “We’re both a 

manufacturer and a retailer. We work 

with various factories to produce the 

merchandise necessary to complete each 

season’s collection, and we produce 

our own goods, too. For instance, we 

produce our own pullover collection at 

Nile Tricot, which is the biggest pullover 

factory in Egypt.” 

In November 2009, after operating 

Nile Stock for 10 years and seeing more 

than 1 million pieces of apparel sold 

each year, Kamal launched the upscale 

Red Tags, a four-level, 2,000-m 2 department 

store filled with premium international 

brands in contemporary styles. 

The first of its kind in Egypt, Red Tags 

is strategically located in the 5th Settlement 

of Cairo, between Cairo Festival 

City and the AUC New Cairo campus, 

which is far enough from the city center, 

Kamal says, “to avoid cannibalization 

with wholesale accounts, but close 

enough to bring in big city shoppers.” 

The average price point in Red Tags 

is €20, and each brand is displayed in its 

own boutique setting. Red Tags’ inventory 

is mainly sourced directly from brands’ 

official distributers and franchisees, not 

from their factories. Among the brands 

found in Red Tags are Abercrombie 

& Fitch, CK, Guess, Lacoste, Morgan 

and Tommy Hilfiger. Kamal either buys 

the goods outright or places goods in 

the store on a consignment or revenuesharing 

basis. The company doesn’t lease 

space to brands inside Red Tags. 

The emphasis is on customer service, 

inviting visual merchandising, a familyfriendly 

atmosphere that includes a 

cafeteria, a mini amusement park for 

children, and plenty of free parking. 

“Red Tags is more of a luxury shopping 

experience that caters to a different market 

than Nile Stock,” Kamal says. “Red Tags

is for fashion-conscious Egyptian shoppers 

who appreciate a good bargain.” 

Despite its off-price underpinnings, 

Red Tags proves that Egypt is ready for 

upscale designer outlets, Kamal says, 

noting that the country has the largest 

population in the Arab world and 

the fourth-largest economy after Saudi 

Arabia, the UAE and Algeria. Economic 

growth is forecast to average 6.2 

percent through 2012 and employment 

rates are expected to continue to rise. 

There are currently no outlet centers 

in Egypt. Although Cairo was first 

exposed to the shopping mall concept 

as far back as 1989, growth of this particular 

retail segment has been cumbersome 

and cautious, Kamal says, due to 

historically slow economic growth and 

high tariffs on imported goods. 

In 2005, though, a huge reduction in 

import duties marked a major turning 

point for retailers and landlords. 

“Today the shopping mall concept 

has established a firm grip on Egypt’s 

shoppers,” Kamal says. 

With financial backing from Beltone Fi- 

red Tags, the upscale sibling of Nilestock, targets fashion-conscious shoppers looking 

for brands that include CK, Guess, Lacoste and Tommy Hilfiger. 

nancial, one of the fastest-growing investment 

banks in the Middle East and North 

Africa, Kamal is considering a couple of 

new avenues, including creating a chain of 

SEARCHING FOR 

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Both Directories are 

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Red Tags with a smaller footprint. 

“We are also going to build an outlet 

center in Cairo,” Kamal says. 

Clearly, the journey continues. c 

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mARkETING ANd EVENTS 

Outlet centers beat the heat 

with summer music festivals 

Legendary u.S. singer 

Dionne Warwick was the 

star performer during McArthurGlen’s 

6th “Summer Nights 

Festival,” thrilling an enthusiastic 

audience during her performance on 

August 7 at McArthurGlen’s Serravalle 

Designer Outlet near Milan. 

This year was the first time McArthurGlen 

held the music festival at 

all five of its designer outlet villages 

in Italy. An established event on Europe’s 

jazz circuit, the 2010 Festival 

featured 27 artists who performed 

between July 30 and August 15 at 

Serravalle, as well as at La Reggia 

Designer Outlet near Naples, 

Barberino Designer Outlet near 

Florence, Castel Romano Designer 

Outlet near Rome and Veneto Designer 

Outlet near Venice. 

McArthurGlen Group’s outlet portfolio 

includes 19 designer outlet villages 

totaling 5.4 million sf, of which the five 

Italian centers comprise 1.3 million sf. 

Since mid-2009, McArthurGlen has 

opened new designer outlets in Berlin, 

Salzburg and Naples with additional 

new projects under development in 

Athens and Hamburg. 

n n n 

Beginning June 17, Palmanova Outlet 

Village, located on the border between 

Italy, Austria, Slovenia and Croatia, 

stayed open until 11 p.m. throughout 


u.S. singer dionne Warwick was one of 27 

performers for McArthurGlen’s summer music 

festival held in its outlet villages in Italy. 

the summer to offer an array of events 

and performances. 

Highlights included a June 24 performance 

of Funk Off, the “first funky 

Italian marching band,” which also performed 

at the famous Blue Note in Milan. 

July featured the Bahia Brasil Show, 

Raimondo Todaro, who was the winner 

of Italy’s Dancing with Stars TV show, and 

Dangerous Games, a finalist in Italy’s 

Got Talent TV show. August events and 

Serravalle designer Outlets makes good use of its piazza each summer with top-flight jazz concerts. 

entertainment included the awarding 

of the Miss Italy title, the Colorado 

Café Brazil Samba Show and a performance 

by Paolo Casiraghi. 

The festival was sponsored by the 

Society Promos, chaired by Charles 

Maffioli. Since opening in May 2008, 

the 258,300-sf outlet village has drawn 

6 million visitors. 

n n n 

Alpenrhein Outlet Village, Landquart, 

Switzerland, hosted a series of 

concerts June 26-27, with a lineup 

that included Grisons rock band May 

Day, and Just Takes Two with George 

Kouvatis and Gerlinde Ninaus. The 

event included a fashion show with 

nearly 100 models and employees on 

the one kilometer catwalk to show 

off a wide range of Alpenrhein Village’s 

latest fashions. 

Just to keep the party atmosphere 

going, Alpenrhein Village organized a 

skating day in conjunction with outlet 

chains Maya Maya and Rollerblade on 

July 3. The center’s South Park Square 

was given over to rollerbladers, plus Martin 

Hänggi, a multiple champion in Swiss 

inline skating and speed skating, who was 

on hand with tips and advice. Free rollerblades 

were available for the event, and 

Maya Maya offered a 10-franc certificate 

toward the purchase of a UV-shirt with 

a sun protection factor 30 +, just in time 

for the summer heat wave. c

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mARkETING ANd EVENTS 

RCA and MCG form 

fashion partnership 

The royal College of Art (RCA) 

has formed a partnership with 

McArthurGlen to launch the 

McArthurGlen Spirit of Fashion Awards. 

The Awards are open to alumni of 

the RCA, which has fostered such 

world-renowned luminaries as Christopher 

Bailey of Burberry, Erdem Moralioglu 

and milliner Philip Treacy. McArthurGlen 

and the RCA conceived the 

Awards to help further the careers of 

young designers and to shape the future 

of fashion. 

“With fashion being such a competitive 

arena, so much extraordinary talent goes 

unrecognized,” said Julia Calabrese, CEO 

of McArthurGlen. “The RCA does a 

fantastic job in challenging young designers 

to realize their potential and we very 

much look forward to working closely 

with them to help the recipients of the 

McArthurGlen Spirit of Fashion Awards 

further establish their own brands and 

move their businesses forward.” 

Professor Wendy Dagworthy, head of 

the School of Fashion and Textiles at the 

RCA, comments: “This is a very exciting 

opportunity for RCA fashion alumni to 

The model’s hat is by Philip Treacy, a 

graduate of the Royal College of Art. 


access highly experienced professionals 

to help them grow their businesses. We 

are delighted to be in a position to help 

our graduates and are greatly appreciative 

of the support of McArthurGlen, 

especially in terms of their expertise and 

experience in fashion retailing.” 

The McArthurGlen Spirit of Fashion 

Awards demonstrates McArthurGlen’s 

desire to nurture emerging fashion talent. 

From a shortlist of designers who 

have been asked to focus on reinventing 

a classic, McArthurGlen and the 

RCA, together with figureheads from 

the world of fashion, will select three 

award recipients, to be announced in 

autumn 2010. 

The recipients will then embark on a 

year-long partnership with McArthurGlen, 

during which time they will receive full 

marketing and public relations support, 

an invaluable resource for any emerging 

designer. The collaboration will incorporate 

a creative brief whereby the designers 

will potentially see one of their creations 

put into production, generating for them a 

percentage of the profits from sales. 

McArthurGlen has seven designer outlet 

centers across the UK and a further 12 

in Continental Europe, working alongside 

some 750 international fashion brands. 

Three rCA students will be chosen for 

a McArthurGlen partnership that could 

lead to production of their creations. 

The Royal College of Art, founded in 

1837, is the world’s only wholly postgraduate 

university of art and design. 

Located in South Kensington and Battersea 

in London, RCA’s departments 

include animation, architecture, ceramics 

& glass, critical studies, curating, 

goldsmithing, silversmithing, painting, 

photography, printmaking, sculpture, 

and vehicle design, as well as textiles, 

menswear and womenswear. c

Shoppers respond to dubai Outlet’s half Price mondays 

WiTh ThE AuGuST launch of “Half 

Price Mondays,” Dubai Outlet Mall 

introduced a brand new shopping 

concept to Dubai. All merchandise 

discounted 50 percent or more 

is displayed outside participating 

stores, creating a mega bargainmarket 

ambience in the mall. 

Participating retailers include 

Adidas, Aldo, Bauhaus, Converse, 

Levi’s, Mango, Liali Jewellery, Nike, 

Pierre Cardin, Puma, Rivoli, Salam, 

Samsonite, Studio R, Priceless, 

Allied Factory Outlet, Timberland, 

Tommy Hilfiger and Kraze. 

BriEFLy nOTEd… 

n Shoppers at Bridgend 

Designer Outlet, in Bridgend, 

Wales, won’t be waiting long for 

on-site customer service thanks 

to Segway vehicles now in use 

at the center. The eco-friendly 

vehicle, which runs on electric 

power, will allow staff to be more 

available to shoppers. Bridgend 

Designer Outlet has become the 

first shopping center in Wales to 

introduce a Segway to help meet 

customers’ needs. 

“The Segway is a great addition 

to our range of customer 

service measures and, as the 

ultimate in green transportation, 

it’s kind to the environment 

too,” David Norris, center 

manager at Bridgend Designer Outlet, 

said. “The management team here like 

to maintain a unique approach to running 

the outlet, and the introduction 

of the Segway is a reflection of our 

commitment to exploring new ways to 

provide the best possible service to our 

shoppers.” 

The 241,000-sf gla Bridgend Designer 

Outlet is owned by Henderson 

Global Investors and operated by 

McArthurGlen. 

n Bicester Village got a thumbs up 

from China recently, and the carrier of 

the message was none other than UK 

Prime Minister David Cameron. At least 

that’s the word from Frank Blanchette, 

“Dubai Outlet Mall is committed 

to offering appealing and innovative 

ways to ensure that customers get 

maximum value out of every Dirham 

they spend,” Vishal Mahajan, director 

of Dubai Outlet Mall said, adding 

“Half Price Mondays fits perfectly with 

our strategy to meet our customers’ 

expectations as the ultimate value 

shopping destination in the region.” 

Dubai Outlet Mall offers more than 

800 international and regional brands 

for fashion, accessories, shoes, jewelry, 

electronics, homewares, furniture 

and much more. c 

Bridgend designer Outlet is the latest MCG village in 

the UK to have Segway-assisted customer service. 

director of marketing for Value Retail, 

who tells IOJ that during a recent speech 

by the UK Prime Minister to the tourism 

industry leaders, the PM ad libbed two 

words: “I was recently at a dinner with 

the Chinese Ambassador who commented 

that shopping was the No. 1 attraction 

for Chinese visitors. He added that 

we (China) need more Bicester Villages!” 

Bicester Village, located in Bicester, 

Oxon, England, is a 236,800 sf gla and 

was developed byValue Retail. 

n Let your browser do the walking 

as you tour Batavia Stad Outlet 

Shopping in Lelystad, Flevoland, 

Netherlands. The outlet center now 

has a 360-degree online tour that gives 

dubai Outlet Mall has become known 

for promotions that drive sales. 

visitors to the web site www.bataviastad.nl 

the feeling of actually 

being in the mall. Virtual visitors 

can view Batavia Stad from any 

angle and make full use of the 

web site’s interactive elements 

and video content, including 

video reports of Batavia Stad’s 

Fashion & Styling Weekends with 

celebrity stylists. The virtual experience 

also enables users to be 

accompanied by three interactive 

shopping friends and a personal 

styling consultant who provide 

you with tips, tricks and advice. 

Stable International’s Batavia 

Stad Outlet Shopping opened July 

2001 with 220,680 sf and added a 

53,820-sf phase 2 in 2008. 

In other news, Stable International 

Development BV has won the prestigious 

Ed Luna Award in recognition for 

the way in which Stable International 

has made Batavia Stad Outlet Shopping 

accessible for people with physical 

limitations. Working closely with 

Lelystad Institution for Handicapped, 

Batavia Stad developers adapted elements 

of the outlet’s design to enable 

those who are physically less able to 

shop with ease in the fashion outlet. 

Stable’s ongoing commitment to accessibility 

(phases 2 and 3) and future commitment 

in phase 4 (due to open 2011) 

were the key factors for the winning the 

award. c 


GLObAL OUTLTET NEWS 

Luxury brands 

join Veneto 

designer Outlet 

MCArThurGLEn’S Veneto Designer 

Outlet welcomed several new luxury 

brands this summer when Bottega 

Veneta, La Perla, and Versace opened 

stores. The Bottega Veneta outlet store 

at Veneto is the first outside the Gucci 

Group, of which Bottega Veneta is a 

part. The two other brands both operate 

at other centers within McArthurGlen’s 

portfolio of 19 designer outlet villages; 

La Perla is also at Serravalle (Milan), 

Castel Romano (Rome) and Salzburg, 

and Versace is also at Serravalle. 

Earlier this year Prada opened in 

Veneto’s second largest unit – the largest 

of the four Prada stores at McArthur- 

Glen Designer Outlets. Other brands in 

the luxury piazza include Armani, Ballantyne, 

Brioni, Burberry, Escada, Fendi, 

Fratelli Rossetti, I Pinco Pallino, Marni, 

Salvatore Ferragamo, Sergio Rossi and 

Valentino. 

Veneto Designer Outlet at Noventa di 

Piave opened in September 2008. The 

center is off the Venice-Trieste motorway 

and close to the Venetian Riviera 

and the popular seaside resort of Jesolo. 

The Veneto region has one of the highest 

levels of consumer expenditure in 

Italy and accounts for approximately 20 

percent of tourist spending in Italy. 

With the opening of an 18,500-sf 

phase 2 in September, Veneto Designer 

Outlet will reach 203,000 sf. An 8,100sf 

phase 3 is also planned. c 

refurbishment 

paying off at 

Clacton center 

The FIRST phaSe of a €3.8 million refurbishment 

of Clacton Factory Outlet has 

renewed retail and shopper interest in the 

center – Marks & Spencer Outlet will open 

a 10,000-sf store there in November. 

London-based investment company 

Rom Capital, which specializes in reviving 

neglected shopping centers, bought the 

117,615-sf property in 2009 and imme- 


Two luxury retailers, Bottega Veneta and La Perla, joined MCG’s Veneto Designer 

Outlet this summer. 

Summer openings at mcarthurglen outlet villages 

BrAnd CEnTrE CiTy 

Lacoste bridgend Cardiff 

Livingston Edinburgh 

O’neill bridgend Cardiff 

L’Occitane Cheshire Oaks Chester 

maje roubaix Lille 

aquascutum ashford London 

East midlands nottingham 

Kathy van Zeeland ashford London 

LK bennett ashford London 

LK bennett Cheshire Oaks Chester 

adidas La reggia naples 

reebok La reggia naples 

Phase Eight East midlands nottingham 

Ed hardy Salzburg Salzburg 

K.I.d.S. Salzburg Salzburg 

Skechers Salzburg Salzburg 

bottega veneta veneto venice 

La Perla veneto venice 

diately launched a €4.6 million refurbishment. 

The makeover includes eco-friendly 

cedar cladding and aluminum windows 

fitted to all its stores. The second phase 

of the refurbishment will begin in the 

autumn and will include canopies over the 

main malls and new street furniture. 

“It’s fantastic to see the renewed 

interest in the center from new and 

existing retailers, and the positive 

feedback from customers and tenants 

has been amazing,” said Allan Hassell, 

the center’s manager. “As a result of 

the works being completed, the center 

is now attracting a lot of interest from 

new retailers,” added Mr. Hassell. 

Carnaby Street-based Merc London 

opened its first factory outlet store at 

the spruced up center, which is located 

just on Stephenson Road West, just 40 

minutes from London via the M25, 

followed shortly by Glitter Princess and 

Yeomans Outdoor Leisure. 

Rom Capital has also been granted 

outline planning permission for the 

outlet’s car park, which includes plans 

for a garden center, car showroom and 

fast food drive-through, or a new pub 

restaurant and light industrial units. The 

center is now more than 70 percent 

leased, up from 51percent when Rom 

acquired it in January 2008. c

News Notes 

n Australia’s Lend Lease Corp. entered 

the outlet sector on May 31 with the 

purchase of three outlet centers in New 

Zealand. The company paid $185 million 

for the Dress Smart outlet malls in 

Auckland, Christchurch and Wellington. 

The deal also includes the traditional-format 

Meridian Mall in Dunedin, NZ. 

The first Dress Smart outlet mall opened 

in 1995 in Onehunga, Auckland. The 

developer, Prime Retail (no affiliation 

with the U.S. based outlet developer of 

the same name), sold the three centers in 

2003 to ING Retail for $63.4 million but 

continued to manage the properties and 

develop one more, in Hamilton. Lend 

Lease, the largest developer in Australia, 

acquired the three outlet malls from the 

ING Retail Property Fund Australia, and 

intends to acquire the rest of the portfolio, 

which includes 10 more retail projects 

in Australia. 

n General Shopping Brasil, a publicly 

held company headquartered in Sao 

Paulo, Brazil, recently acquired a 20 

percent interest in Outlet Premium 

Sao Paulo for €12 million. The 

191,332-sf center was developed and is 

managed by General Shopping Brasil. 

It is on Rodovia dos Bandeirantes, km 

72, in the State of Sao Paulo c 

NEWSmAkERS 

neinver names 

Sommer to post 

in Germany 

SEBASTiAn SOMMEr has been 

appointed country manager for 

Germany by the Neinver Group. In 

his new position, Sommer will be 

responsible for development and 

expansion in the German market. 

Prior to joining Neinver, Sommer 

developed his professional skills 

at Warnaco Europe Calvin Klein 

Underwear & Jeans, where he was 

franchise and retail expansion manager 

for Europe. He has also worked 

for companies such as Hugo Boss 

and Nike Deutschland GmbH where 

he occupied different posts. c 

LEASinG nOTES 

n The 250,000-sf Junction 

One Outlet Shopping Centre 

celebrated its 6th birthday this 

summer with openings by classic 

UK women’s fashion group 

Alexon, leading health foods 

and supplements store Holland 

& Barrett, and homewares 

store Kitchen & Gift Outlet. 

Quiz, a popular young female 

fashion brand, came on board at 

the end of July. Also due to open 

its first locally based outlet store 

during the next few months is 

iconic Swedish menswear brand 

Melka. Junction One, located in 

Northern Ireland just 20 minutes 

from Belfast, is owned by 

CUSP, the Kennedy Group 

and Dunalastair Estates. 

n Radley, recognized for 

distinctive hand-crafted accessories 

and handbags, recently 

opened a 1,300-sf concept store 

at ING Real Estate’s Dalton 

Park in Murton, England. 

Also opening in the 160,000sf 

center is Tranquillity, the 

new beauty and tanning salon 

being operated by East 

Durham College. The salon is 

opposite Starbucks and offers 

a range of beauty treatments 

including facials, waxing, body 

treatments, lash and brow 

treatments, manicures and pedicures. 

It will remain open until 

the end of the academic year. 

n Clarks Village in Somerset, 

England, became fully leased 

this summer with five new tenants: 

Osprey London (1,005 

sf), Fiorelli (721 sf), Yumi (923 

sf), Aquascutum (1,556 sf) 

and Home Curtains and Bedding. 

The Yumi unit, a favorite 

amongst celebrities including Lily 

Allen, Fearne Cotton and Alesha 

Dixon, is the chain’s second store 

at Realm’s 185,000-sf center. 

n Stable International recently 

announced that Desigual has 

opened its first outlet for the 

Netherlands in Batavia Stad 

Fashion Outlet in Lelystad. 

The 277,446-sf center opened in 

2001. 

New tenants joining Value 

Retail’s nine outlet shopping villages 

this summer include Anya 

Hindmarch, Armani, Bulgari, 

Diane von Furstenburg, Dolce 

& Gabbana, Fendi, G-Star, 

Gucci, Hackett, Hugo Boss, 

Juicy Couture, La Perla, Marni, 

Matt Williamson, Michael 

Kors, Moncler, Superdry, 

Theory, Tod’s, UGG Australia, 

Valentino and YSL. 

n Women’s fashion brand Yumi 

has opened its first two UK 

outlet stores with Land Securities. 

Yumi opened an 1,801-sf 

unit at The Galleria in Hatfield, 

England at the end of 

May, and a 1,765-sf unit in August 

2010 at Gunwharf Quays 

in Portsmouth. Both stores 

are on five-year leases. Looking 

forward at Gunwharf Quays, 

Lacoste Outlet will open a 

1,687-sf in September and 

Cath Kidston, a vintage fabric 

specialist, has signed a 10-year 

lease on a 2,097-sf unit, scheduled 

to open January 2011. 

n GVA Grimley Outlet Services 

recently added five new 

tenants to the line-up at Alpenrhein 

Outlet Village in Landquart, 

Switzerland: Diesel, 

Billa Bong-Vans-Fox, Cashmere 

World, Nicci and Ripcurl. 

ING Real Estate’s 228,399-sf 

center opened in late 2009 at 

the foot of the Swiss Alps, near 

famous ski resorts St. Moritz, 

Klosters, Arosa and Davos. 

n Four tenants recently opened 

at Hornsea Outlet Shopping 

Village: Putting on the Glitz, 

Lilly’s Gift Box, Cargo, and I 

C Man & Co. The 110,000-sf 

center, which opened in 1989, 

is in Yorkshire, England. 

n Lowry Outlet Mall in Salford 

Quays near Manchester, 

England has a new tenant: 

Holland & Barrett, trading under 

the name of H&B Outlet, 

will take a 1,196-sf unit on the 

mall’s ground floor. Orbit Development’s 

205,867-sf center 

opened in 2001. c 


TRAdE COLUmNS 

Italian FOC sector 

turns 10 years old 

By Felippo Maffioli 

The essential starting 

point in organizing the activities 

of an Observatory, 

such as the one conceived by the 

Italian ACFOC, is an awareness 

of the current structure of the 

national market, with its history, 

its peculiarities and the critical 

success factors that have influenced 

its development. 

Ten years after the opening of 

the first FOC in Italy, our country 

is already in 2nd place in Europe 

for business devoted to this specific 

distribution channel, with 20 

large centers in operation (with 

unit GLA > 10,000 m 2 ), about 

2,220 stores and 522,000 total m 2 

of GLA. 

In particular, after the first 

opening in 2000 of the McArthurGlen 

Serravalle Designer Outlet, the national 

FOC market has grown by an average 

of two new centers every year, with a 

first important peak of development in 

2003, when as many as five centers were 

launched, and a second peak in 2008, 

with four more outlet villages opened. 

There were many critical success factors 

involved in such intensive development, 

ranging from the business opportunities 

for real estate operators and 

investment funds interested in diversifying 

their portfolios, to the architectural 


When Value retail’s Fidenza Village opened in the 

Milan market in 2003, it was one of only seven outlet 

centers in Italy; now there are 20. 

village-style features of the centers, 

which appealed to the Italian concept 

of shopping in the city center. 

The end clients of Italian FOC also 

appreciate the type of offer of value for 

money (quality – brand – price), and the 

aspect of leisure, often emphasized by 

operators of organized tourism, with 

whom center management are more frequently 

forming strategic partnerships. 

Media coverage also brings an increasingly 

strong and significant contribution 

to the sector, especially considering the 

highly positive performance declared by 

the operators in 2009. The total 

estimate is just under 50 million 

visitors to Italian outlet centers, 

10 percent footfall increase and a 

10 percent to 15 percent turnover 

increase. The numbers are holding 

up well in 2010, too. 

For all of these reasons, the Italian 

sector now includes a number of 

large domestic outlet developers as 

well as the main international operators. 

While 50 percent of Italy’s outlet 

centers are in the northern region 

and 30 percent are in the central 

region, the concentration is shifting 

toward the southern regions and 

islands. Of the seven new projects 

already presented to the market and 

expected to open in the next three 

years, as many as four are located 

between Campania and Sicily. 

This said, how much room can 

there still be in Italy, after these latest 

openings, for the development of the 

outlet format as we now know it? What 

type of development can we expect in 

the near future? 

We are certain that the activity of the 

ACFOC will help us to interpret, together 

and promptly, the trends and changes on 

the way, but it will also be essential to maintain 

constant comparison with international 

experiences, starting from the European 

Outlet Conference that will be held in 

Milan on Oct. 12-14, with a study tour to 

Serravalle and Vicolungo on Oct. 12. c

here’s why brands 

really love outlets 

By Brendon O’reilly 

ORdA 

Over the last six months I have spoken with many prospective 

tenants in such far-flung locations as Singapore and 

Moscow. Their questions are often wide and varied because 

to them this channel is new and an unknown. But the one question 

they all ask is also the main theme of this year’s ICSC European 

Outlet Conference in Milan: “Why do brands love outlets?” 

The answer to that question is the same as when I came into 

this industry in 1992, a time when the UK was the new hot 

market for outlets: Because everyone wins! 

What does that mean? 

If you are a consumer and can wait to purchase products just 

a few months after their launch date because you get them for 

half price, it means you win! 

If you are a brand and you have developers that understand your inventory and 

your brand sensitivities and can offer flexible lease terms that are agreeable to 

your board of directors, it means you win, too! 

Brands win even more if they can use their old high street fixtures and refurbish 

their in-line stores. 

But the list runs much farther than the obvious surplus inventory story. 

Planning departments love outlets because the channel gives them a safety net 

if all goes wrong. 

The wholesale buyers love outlets because the channel lets them buy more 

product at a lower price, and they have the assurance of knowing they can still 

dispose of any excess through the outlet channel. 

The accountants love the cash generation, the profit, and also the markdowns. 

Budget suddenly is not so much of a focus. Many CFOs will talk about the ability 

to argue with auditors on cost basis of goods still selling though outlet stores, 

above cost value two years after they would normally have been written off. 

The main reason brands love outlets, however is often overlooked. The outlet 

channel allows them to give the consumer the perfect experience with: 

Right product 

Right price 

Right place 

Right time 

Flexibility is generally what new entrants crave. The outlet 

channel gives that to them, enabling them to cleanse the high 

street and maximize the opportunity of newness and higher price 

points in their main business, which is in-line retail. 

The outlet strategy, if properly understood and given the appropriate 

operational resources, can provide a brand with an almost 

limitless number of commercial and brand advantages. 

Lately I hear from colleagues that our London city boys love outlets, 

too. It turns out that when some of the big brands approached 

the city for funding during tough times, they were rejected for not 

fully adopting an outlet strategy. It seems the cash margin and 

safety net that the outlet sector provides is truly now being understood 

at institutional levels. What’s not to love? 

See you all in Milan to discuss this subject and many more on 

the outlet sector. c 

Ted Baker outlet 

osprey outlet 

mango outlet 


UPCOmING EVENTS 

Global events spotlight 

Factory outlet retailing 

On a global level outlet retailing 

is stepping out of the 

shadows this autumn with 

two ICSC conferences – the vRN 

Fall outlet leasing and marketing 

Convention in the U.S., and the 

european outlet Conference in 

Italy. Furthermore, two other global 

conferences, Mapic in France, and 

RECon Asia in Beijing, will feature 

outlet retailing sessions. 

The two-day VRN convention with 

exhibits is scheduled for Sept. 27-28 

in Secaucus, N.J., the location most 

favored by U.S. outlet retailers as their 

corporate offices are in that town or 

nearby. The conference is in its 27 th 

year, balanced each spring by an outlet-exclusive 

deal-making event held 

in Orlando. Outlet retailers also favor 

Orlando since most operate stores in 

Orlando’s massive outlet market of 

four centers totaling 1.8 million sf. 

in EurOPE, ThE two-day 2010 

European Outlet Conference, which 

last year drew the highest attendance 

figures of any outlet conference in the 

world, is now in its fifth year. It will 

be held 12-14 October at the Meliá 

Milano Hotel, Milan. 

New research on top-performing 

outlet centers across Europe is an 

audience favorite each year, as are 

presentations from the top executives 

of leading international brands, 

which will highlight the conference’s 

theme, “Why Brands Love Outlets.” 

Established international brands, 

including La Perla and one of Europe’s 

newest and coolest fashion brands, 

Desigual, will speak at the conference, 

which is hosted by IOJ and its 

parent publication Value Retail News. 

Franchisees representing Tommy 

Hilfiger,Timberland,BananaRepublic, 


Outlet executives from around the globe are finding more venues for sharing ideas 

and learning about new projects and retailers. 

Puma, Calvin Klein and other brands 

will also make presentations. 

Sessions on outlet-center marketing 

and new development, with spotlights 

on the emerging markets of 

China, Russia and Egypt, information-gathering 

through new technology, 

outlet-center investment strategies 

and an outlet-center tour are all 

on this year’s conference schedule. 

Delegates will also hear from eBay 

executive Nicholas Illidge on how this 

online distribution channel can work 

in conjunction with bricks-and-mortar 

stores. 

“Like traditional shopping centers, 

outlet centers continue to evolve,” 

says Neil Thompson, managing 

director of Fashion House and chair 

of the EOC program committee. 

“Therefore, it’s essential that the 

industry is well-informed to keep 

their outlet centers relevant and 

exciting. This year we have a fantastic 

line-up of brands and industry 

speakers, and with eBay coming 

forward to present their plans, this 

is going to be the most fascinating 

outlet conference yet. With more 

retailers expressing their intention 

to attend, there will be more leasing 

business done this year, too.” 

As the global trade association of 

the shopping-center industry, with 

more than 60,000 members, ICSC 

supports members in their own 

countries, across Europe and globally, 

providing connections and business 

opportunities as well as unique 

access to retailers and research. 

iCSC’S rECOn ASiA will be held 7-9 

NovemberattheBeijingInternational 

Hotel and Convention Center. The 

session, “Outlets – Where is the 

industry going in Asia?” – grew from 

the intense interest in outlet retailing. 

There are at least 28 existing 

outlet centers in China and more 

than 12 outlet centers in Japan and 

Korea, plus many planned throughout 

Asia. The discussion topics will 

range from finding the right locations 

to keeping shelves stocked. 

MAPiC coming up 17-19 November 

at the Palais des Festivals in Cannes, 

could see an outlet session. Brendon 

O’Reilly, president of the industry trade 

group Outlet Retailers and Developers 

Association, is spearheading the effort 

to put the session on the agenda. c

European Outlet Mall Fund 

Henderson’s European Outlet Mall Fund is a sector-specialist fund with an excellent performance 

record investing in prime designer outlet assets in core European markets. 

The Fund’s €1.4 bn* portfolio comprises 11 pan-European designer outlet centres in Italy, Germany, 

France, Austria, the Netherlands, Belgium and the UK. - Some of the most successful designer outlet 

centres in Europe. 

Henderson is a leading fund manager in retail property with assets under management of 

€12.9bn* worldwide. 

Henderson’s partnership with developer and property manager McArthurGlen brings added 

strength, enabling the Fund to benefit fully from collaborative expertise, and secure a vast 

number of leading global designer and luxury brands. 

*as at June 2010 

David Williams 

Fund Manager 


Tel: +44 20 7818 6423 

david.williams@henderson.com 

Jayson Egan 

Head of Asset Management 


Tel: +44 20 7818 5052 

jayson.egan@henderson.com 

Issued and approved by Henderson Global Investors and is solely for the use of professionals, defined as Eligible Counterparties or Professionals as per the Guidance for Authorised Firms made under the Financial Services and Markets Act 2000, and is not for general public distribution. Any 

other persons who receive this document should not rely on or act upon its contents. 

Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Tax assumptions may change if 

the law changes and the value of tax relief will depend upon individual circumstances. 

Due to the specialist nature of property investment, in certain circumstances there may be constraints on the redemption or switching of units/shares in the fund(s). The funds invest in a specialist sector that may be less liquid and produce more volatile performance than an investment in 

other investment sectors. The value of capital and income will fluctuate as property values and rental income rise and fall. The valuation of property is generally a matter of valuer’s opinion rather than fact. The amount raised when a property is sold may be less than the valuation. 

Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management plc (reg. no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited (reg. no. 1795354), 

Henderson Alternative Investment Advisor Limited (reg. no. 962757) and Henderson Equity Partners Limited (reg. no.2606646) (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE and authorised and regulated by the 

Financial Services Authority) provide investment products and services. Telephone calls may be recorded and monitored.

FASHION HOUSE 

Outlet Centre Moscow 

The Best Outlet Centre Opportunity in Moscow 

“We have the perfect location for an Outlet Centre in one of the most populated catchments on the European 

continent, with 13.4 million brand-conscious consumers with high disposable income within 90 minutes 

drive. The new FASHION HOUSE Outlet Centre Moscow site is located exactly the right distance from the 

standard retail destinations and has easy access. Outlet Centres is a niche sector, totally unlike an ordinary 

shopping centre in design, marketing and especially in operational management, delivering a unique 

consumer experience. To succeed, you really have to have confidence in the capability of the owners and 

Operators. Which is why the FASHION HOUSE Development business has become the leading Outlet Centre 

brand in CEE, with Outlet Centres recognised by Tenants as amongst the top-performing in Europe. 

The opening up of the Russian market to the international Outlet occupiers is probably the biggest dynamic in 

the Outlet sector for 15 years. And to have the ‘tried & tested’ FASHION HOUSE brand in Moscow provides the 

biggest opportunity in Russia right upfront. It’s an easily accessible package, delivered to the normal Western 

standards, such that its market potential simply cannot be ignored. The scale of the consumer market is 

enormous and the FASHION HOUSE Development team and Leasing Agents are ready now to show how best 

to become involved. No-one else could make it so achievable.” 

Neil Thompson, Chief Commercial Officer, 

FASHION HOUSE Development BV 

www.fashionhouse.com/future-projects 

International enquiries: 

David Carver 

GVA Outlets 

10 Stratton Street, London 

W1J 8JR UK 

Tel.:+44 8449 02 03 04 

david.carver@gvagrimley.co.uk 

Russian enquiries: 

Narmina Gorina 

Magazin Magazinov (CBRE Group) 

40/2 Prechistenka, Moscow 

119034 Russia 

Tel.:+7 495 725 26 56 

gorina@magazinmagazinov.ru 

M10 

Krasnogorsk 

M1 

Sheremetyevo 

Khimki 

A104 

MOSCOW 

M8 

Schelkovo 

A103

Outlet retailing in emerging markets - Value Retail News

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