Planning approvals remain factory outlets - Value Retail News

EuropEan FoC ChallEngEs & strEngths 

Planning approvals remain 

factory outlets’ top challenge 

By Linda Humphers, Editor in Chief 

Obtaining planning approvals, generating 

footfall, and keeping up with consumers’ 

whims are the top three challenges to 

the factory outlet industry’s ongoing success for 

the coming year, say European executives on the 

landlord side of the business (see chart on page 8). 

Among the other challenges cited by landlords 

in varying degrees of intensity are: meeting tenant 

leasing needs, government restrictions on 

trading hours and petrol prices. But it’s those 

pesky planning approvals that remain a thorn 

in the side of FOC landlords and developers. 

“Getting approval is impossible,” says J.W. 

Kaempfer, chairman of London-based McArthurGlen 

Designer Outlets, operator of 16 

outlet centres in the UK and Europe. “In Italy 

you can get the underlying basic consent in 

nine to 18 months but it always takes two years 

and then it’s still open to challenge. You just 

have to either be ahead of the game or fold. 

We’ve walked away from 25 or 30 sites over the years, and 

many times it was because of the approvals process.” 

McArthurGlen has just announced a site in Greece, 

which he hopes will be less daunting than usual. “It’s a 

magnificent site that was brought to me by one of my urban 

design students at harvard University. We’re hoping 

it goes forward smoothly.” 

Echoing Kaempfer is hans Dobke, president of London-based 

Outlet Centres International, developer of 

Designer Outlets Zweibrücken and the planned Designer 

Outlets Wolfsburg, both in Germany, known for its ferocious 

approvals procedures. 

“The development and management of outlet centres in Germany 

is extremely challenging,” Dobke says, “particularly regarding 

obtaining building consent. We’ve had to work extra hard to prove 

our reliability and profitability, not only to our tenants and our investors, 

but also to the cities and communities in which we develop.” 

One positive about developing FOCs in Germany, he says, is 

that “in comparison to most other European countries, Germany 

is still undersupplied with authentic outlet centres.” 

“Planning approvals are horrendous and getting worse,” says 

John Drummond, managing director of Edinburgh-based Guinea 

Group, operator of K Village in Kendal, England and Junction 

One in Antrim, N. Ireland. But having opened two centres, 

Drummond’s now mainly concerned with other challenges, 

such as keeping up with consumer preferences and the fact 

that manufacturing efficiency means fewer distressed goods are 

showing up in outlets. “Very little is produced for the outlets, so 

there is a problem with having enough stock,” he says. 

Also on Drummond’s headaches list: Few chains want to operate 

more than a handful of stores; generating footfall is an ongoing 

challenge, and the cost of petrol can be discouraging to the casual 

shopper. On the plus side, Drummond says, Junction One has a 

huge discount petrol station and a big, free car park. 

As managing director of London-based Value Retail, operator 

of nine outlet centres in the UK and Europe, Scott Malkin has 

seen his share of planning approval nightmares, but he shies 

InternatIonal outlet Journal u Fall 2006 

Planning approvals can cause costly delays, as Guinea Group discovered during 

the seven-year permission process on Junction One (above) in N. Ireland; 

McArthurGlen, which operates the Designer Outlets in Parndorf, Austria (below), 

sometimes walks away from schemes rather than wait for approvals. 

away from commenting on them. he focuses instead on what 

he considers his company’s biggest challenge: further upgrading 

his upscale centres, perfecting the outlet experience. 

“We want our brands and our customers to encounter something 

wholly satisfying and consistent with a fantastic urban setting, one 

of the great shopping venues of the world,” he says. “Our venues 

are young and have potential, but right now we’re building Ferraris 

while we’re still learning how to drive them. The raw material is 

there. Everytime I go to one of Bicester [Value Retail’s most successful 

scheme], I think of 35 things to improve. The whole company 

thinks this way. We’re all always trying to do things better.” 

Malkin is proud of his team at Value Retail and considers them 

essential to the company’s success. “Obviously every business 

has turnover,” he says, “but our team has grown together. We’re 

a multicultural company, a melting-pot culture. We’re not an 

English company doing outlets. As we expand country by country, 

we grow country by country. We feel totally European with 

strong local cultures. We’re decentralized with no dominant 

national culture, thus there’s no inclination to blame others. 

“And 90 percent of our senior team comes out of retail. We 

understand and serve our brands. We don’t dominate them.” 

So the list of challenges goes on and on, but one common theme 

among landlords is that they genuinely enjoy what they do and who 

they work with. As Kaempfer put it, “I’m having fun. I have a great 

crew. They’re all smart, hard-working and a lot of fun.”


What are they doing right? 

Outlet landlords talk 

about their strengths 

IOJ asked European factory-outlet executives what factors would be most important 

in their companies’ ongoing success in the coming year. 

Of more than 40 replies to this open-ended question, a wide variety of industry 

strengths jumped out, with most of the executives saying they rely on the high quality 

of their schemes and their portfolios to reach and exceed their goals. Portfolio 

branding and the ability to spread planning and operations across 

a group of FOCs is high on the list for the owners of multiple 

properties, and they and other FOC developers say their standing 

is enhanced by their good reputations for delivering on promises, 

particularly regarding growth and performance. 

Other positive factors include the ability to choose and obtain 

good sites. The clear positioning of each scheme, attractive centre 

designs, and adapting each centre to its customers and market were 

also seen as playing an important role in a well-run company. 

Mentioned almost as often as the quality of their schemes was 

the overall excellence of their staffs. Executives described their 

colleagues as “experienced,” “close-knit,” “efficient,” and “highly 

professional,” and as key players in their company’s decision- 

making process. 

A few praised their small staffs for their company’s ability to 

be nimble and make timely decisions or to react quickly to ten- 

ant needs. Others lauded their 

team’s understanding of the 

outlet industry, and others emphasized 

that having depth and 

quality at the senior management 

level is what leads to fruitfully 

defining and implementing their 

company’s strategies and objectives. 

Funding is fundamental to 

success, the respondents noted, 

citing strong financial backers 

and good JV partners (particularly 

in new countries) as one of 

the engines driving their business. 

Another positive force is 

centre marketing. Several 

respondents felt their company’s 

innovative marketing 

and understanding of 

the catchment make the 

difference between a centre 

that’s just doing okay 

and one that’s gloriously 

pumping money. 

Of course everyone real- 

Good site selection and a reputation for 

delivering on promises of growth and 

performance are seen as outlet-industry 

strengths; top photo, Value Retail’s Ingolstadt 

Village; above, aerial view of Outlet 

Centres International’s Designer Outlets 

Zweibrücken. 

izes that the FOC industry is retailer-driven, and much homage 

was paid by respondents to tenants and to the relationships 

that help centres flourish. Improving the tenant mix, bringing 

intelligence to brands’ concerns, and making sure that leasing 

teams and tenants are on excellent terms was cited often and 

embodied in this comment: “Our good communication among 

our network of investors, operators, tenants and consumers” is 

key to achieving success. 

Respondents are happy to see new tenants, hypermarkets, 


discount petrol stations, and the growth surrounding 

centres because all of those create 

footfall. 

Finally, a number of respondents mentioned the obvious, 

that industry growth is a sure sign of success. Development 

of new centres and opening new phases is undeniably the 

hallmark of arrival in the world of FOCs – and the growing 

demand by retailers for outlet units in new markets is the 

industry standard for excitement. 

But all of those will happen only if that one, often-locked 

door has been successfully pried open – obtaining planning 

consents. Now that’s success.


Tenant challenges often come 

from within, affect landlords 

The challenges that landlords and factory-outlet chains 

say they face are often miles apart, with few overlapping 

concerns, according to IOJ’s anecdotal survey of retailer 

issues. But there are a few issues that landlords and tenants 

say they share, such as educating the consumer on 

factory-outlet brands and keeping up with ever-changing 

consumer trends. And, there are a few retailer-related issues 

that pose a challenge for landlords, such as poorly managed 

stores (due to tenants’ tough time finding qualified staff) 

plus competition from discounters and high street. 

When Brendon O’Reilly, partner of GVA Grimley 

Outlet Services, puts on his operator’s hat, he speaks to 

the kinds of tenant issues that faze landlords. 

“Currently the biggest challenge in Poland, the Czech 

Republic, hungary and the Ukraine is the varying representation 

in company stores,” he says, explaining that 

within the same country one brand will have both licensees 

and the corporate offices operating stores. “It shows up a mile 

in the consumer’s reaction. For instance, Nike Company Stores 

have much better selection and are much more organized than 

Nike distributors’ stores. The Company Stores’ inventory comes 

from everywhere, but the distributor gets inventory only from 

where he distributes, so those discounts aren’t as heavy. Almost 

every brand has two sets of distributors in every country, all 

trading under the same name. We’re convincing more to do 

Educating the consumer about FOCs is another challenge 

shared by tenants and landlords; above, Morley Fund/ 

Aviva’s Premier Outlets Center in Budapest, Hungary. 

2006 European Factory Outlet Challenges Survey – Landlords 

Percentage of replies* Challenges to your company’s ongoing success in 2006 

19 percent Variations in planning/obtaining approvals in each country 

15 percent Generating footfall at outlet centers 

15 percent Keeping up with consumers’ preferences for brands and centre amenities 

10 percent Acquiring sites that meet tenants’ sensitivity requirements 

8 percent Creating efficiencies when operating centres in more than one country 

8 percent Government restrictions on trading (pricing and operating hours) 

8 percent Meeting tenants’ many leasing needs 

6 percent Educating consumers about branded tenants; consumer perception of outlet goods 

6 percent Retailers’ diminishing need for space (unless capital premiums are paid) 

2 percent Funding my schemes 

2 percent Petrol prices 

* 48 replies received; survey conducted in August 2006 

Source: Value Retail News/International Outlet Journal 


Keeping up with consumers’ changing preferences is a 

challenge shared by tenants and landlords; above, the 

Outlet Company’s Fashion House Sosnowiec in Poland. 

just company stores in the outlets.” 

Largely speaking, though, tenants and landlords often operate 

in parallel universes. here are a dozen challenges, in no particular 

order, that European outlet chains say are among their 

most critical: 

1. Availability of stock and the logistics of getting inventory into 

each store 

2. Sensitivity with wholesale accounts 

3. Cannibalization of my brand 

4. Company restrictions on participating in centre 

marketing 

5. Paperwork and hassle of local taxation and VAT 

6. Developer not keeping the tenant mix fresh 

7. Developer not creating tenant neighborhoods 

8. Footfall at centres 

9. Center operating hours 

10. Appropriate common area maintenance charges 

11. Lack of feedback on perfomance of existing centers and 

the potential of planned centers 

12. Center marketing strategies

Value Retail stays in character 

with opening of Kildare Village 



K ildare 

Village, Value 

Retail’s ninth up- 

scale outlet shop- 

ping centre, quietly 

opened its doors in 

early July in the heart of County 

Kildare, near Dublin, Ireland. 

Despite the no-frills opening 

– the grand opening won’t be 

until May 2007 – shoppers in the 

market were primed, and trading 

was two to three times higher 

than expected, exceeding opening-day 

sales of every other Value 

Retail project in Europe. 

Furthermore, Kildare Village is 

currently trading third in terms 

of sales psm in the developer’s 

portfolio, behind only Bicester 

Village in England and La Vallee 

Village near Paris. 

Whether that’s a tribute to 

the affluent catchment in the 

Dublin market or to Value Retail’s 

particular expertise in siting and 

promotion doesn’t really matter. 

The fact is, Kildare Village has 

opened in one of the most interesting 

markets in the country 

with the fastest growing economy 

in Europe. 

The centre is 60 minutes southwest 

of central Dublin – 30 

minutes if the traffic’s light. It is 

adjacent to Junction 13 of the M7 

Motorway, which carries over 9.4 million cars and coaches past 

the Village each year and is the principal tourist route linking 

Dublin to the south, southwest and west. 

Kildare Village’s catchment draws from the 2.5 million people 

who live within a two-hour drive, the 3.6 million international 

tourists who visit Dublin annually and the 6.8 million international 

tourists who visit the Republic of Ireland each year. 

Kildare Village is a few minutes from the town of Kildare, 

one of Ireland’s wealthiest regions. Once the village is in full 

swing, it’s expected to attract 1.5 million shoppers in its first 

year, with possibly up to 400,000 of those customers traveling 

on the 35-minute direct rail service from Dublin. 

Music in their method 

Additionally, the site fits into Value Retail’s modus operandi: 

a visible location in a major, international city that shoppers 

are known to enjoy. Then add two portions of Value Retail’s 

formula: its collection of upmarket tenants and its ability to 

differentiate its centres from the rest of the pack. 

Scott Malkin, chairman of Value Retail, told IOJ that his 

company doesn’t pursue consumer advertising to get its mes- 

10 InternatIonal outlet Journal u Fall 2006 

Kildare Village was poised to bask in the glow of the Ryder Cup’s 225,000 spectators 

and 60 million TV viewers for the three-day golf event held in late September. 

sage across. “We market to the travel trade, to luxury hotel 

groups, credit card companies, fashion magazines,” he says. 

“We don’t do signs on buses. That’s not our focus. That is not 

what we are about.” 

What Value Retail is about, Malkin says, simply cannot be 

copied by other developers. 

“There are other outlet centres across Europe, but not in 

the primary cities. Our villages are like a luxury hotel brand 

that attracts a certain shopper, a higher-end customer looking 

for an experience. We offer her a global, upscale shopping 

experience.” 

Not that Value Retail rushes into providing tenants for that 

global, upscale shopping experience. 

The 11,000-m² phase 1 of Kildare Village opened with 17 

of its planned 58 tenants. While a 30-percent occupancy rate 

might keep other developers from opening at all, Value Retail 

is an old hand at this strategy, preferring to hold out space until 

the perfect tenant match for the centre comes along. 

“The opening was completely our style,” Malkin says casually. 

“We’ll have 45 stores open by the grand opening” in May. 

Also, Value Retail wanted Kildare Village open in time for

the prestigious world golf tournament, the 2006 Ryder Cup, 

which was played in late September at the nearby K Club. The 

event was expected to attract more than 225,000 well-heeled 

international spectators – many of whom live to shop – to 

County Kildare. 

Strategically secure 

Secure that his strategy is paying off, Malkin says sales at all 

nine Value Retail outlet villages are going well. “Touch wood, 

we’re having a very good year, with trading up 10 to 12 percent 

and the biggest gains in London and Paris. They’re each trading 

up in double digits – 15 percent at Bicester and 20 percent 

in Paris.” 

Malkin says that to some extent the increase in sales at La 

Vallee is due to the return of the tourist to France, but also, the 

centre has begun hitting its stride as a tourism destination. 

“It takes years to do that,” he says, adding that he hasn’t been 

especially troubled by the recent issues at international airports. 

“Recent events are more about introducing additional layers 

to prevent a calamity,” he says. “The world tends to adjust. 

Generally, people make their travel plans six to 18 months in 

advance, so when there’s a disruption, the shock factor is what 

throws people off. It’s more of an inconvenience.” 

The upticks in sales at Bicester and Paris nicely coincide with 

having received planning permission to expand both centres in 

2008. Twenty-five units will be added to Bicester and 16 to La 

Vallee. Expansions are also scheduled to open in 2007 in Value 

Retail’s centres in Fidenza, Italy, which will add 15 units, and 

in Wertheim, Germany, which will add 16 units. 

Kildare Village is already benefiting from Value Retail’s 

editorial coverage in the travel and leisure media, including 

Condé Nast Traveller magazine and in-flight magazines of British 

Airways, Aer Lingus, BMI, Scandinavian Airlines, Delta, Lufthansa, 

and Ryan Air, as well as through established promotional 

partnerships with travel operators. 

In the Dublin market, Kildare Village has established crossmarketing 

partnerships with local attractions including The 

Curragh, the Irish National Stud, the Japanese Garden, Punch- 

Kildare Village 

tenants include: 

Möve 

Café Coton 

Calvin Klein Jeans 

Calvin Klein Underwear 

Clarks 

Coast 

Designers Guild* 

Karen Millen 

Kenneth Turner 

Le Creuset 

Levi’s 

L’Officina Dunne & Crescenzi 

Molton Brown 

Monsoon* 

Ireland’s economic miracle explored 

In an article entitled “The Risk Pool,” which ran in The 

New Yorker magazine on 28 August, 2006, journalist Malcom 

Gladwell is writing about the demise of pension funds in the 

U.S., but he incisively presents an analysis of Ireland’s economy 

as the best way to explain the issue. 

Here is what he said about Ireland: 

The key to understanding the pension business is something called 

the “dependency ratio,” and dependency ratios are best understood 

in the context of countries. 

In the past two decades, for instance, Ireland has gone from being 

one of the most economically backward countries in Western 

Europe to being one of the strongest: Its growth rate has been 

roughly double that of the rest of Europe. There is no shortage of 

conventional explanations. Ireland joined the European Union. It 

opened up its markets. It invested well in education and economic 

infrastructure. It’s a politically stable country with a sophisticated, 

mobile workforce. 

But, as the Harvard economists David Bloom and David Canning 

suggest in their study of the “Celtic Tiger,” of greater importance may 

have been a singular demographic fact. In 1979, restrictions on con- 

Myla 

Nike 

Petit Bateau 

Quiksilver 

Radley 

Reebok 

Starbucks Coffee 

Sunglass Time 

Tog 24 

TSE Cashmere* 

Villeroy & Boch* 

*Opening soon 

estown, Saint Fiachra’s Garden and Saint Brigid’s Cathedral, as 

well as with Irish Rail to promote “a great day out” in County 

Kildare. These attractions draw more than 335,000 international 

and domestic visitors annually. 

Architecturally Kildare Village is inspired by the region’s stud 

farms and world-renowned thoroughbred horse-breeding industry. 

Equestrian facades, varied roofscapes and rich landscaping 

complete the village feel. 

Tenants are required to discount prices for out-of-season or 

end-of-line merchandise by at least 33 percent. Value Retail’s 

Frank Blanchette told the Irish Times that goods generally will 

be available at discounts of around 50 per cent. 

“Our experience is that people shop in our Villages because 

of the good products, good pricing and a good experience,” he 

said. “Customers don’t come to us to save money, they come to 

spend twice as much.” 

Malkin says Value Retail is constantly looking for new sites 

that fit the company’s model, and lately he’s been looking 

beyond Europe. “We’ve been studying Moscow and Dubai,” 

he says, but not Asia, where Chelsea Property Group, a Value 

Retail investor, has pioneered the FOC concept. “We defer to 

Chelsea in the Asian markets.” n 

traception that had been in place since Ireland’s founding were lifted, 

and the birth rate began to fall. In 1970, the average Irishwoman had 

3.9 children. By the mid-nineteen-nineties, that number was less than 

two. As a result, when the Irish children born in the nineteen-sixties 

hit the workforce, there weren’t a lot of children in the generation 

just behind them. Ireland was suddenly free of the enormous social 

cost of supporting and educating and caring for a large dependent 

population. It was like a family of four in which, all of a sudden, 

the elder child is old enough to take care of her little brother and the 

mother can rejoin the workforce. Overnight, that family doubles its 

number of breadwinners and becomes much better off. 

This relation between the number of people who aren’t of working 

age and the number of people who are is captured in the dependency 

ratio. In Ireland during the sixties, when contraception was illegal, 

there were ten people who were too old or too young to work for every 

fourteen people in a position to earn a paycheck. That meant that the 

country was spending a large percentage of its resources on caring 

for the young and the old. Last year, Ireland’s dependency ratio hit 

an all-time low: For every ten dependents, it had twenty-two people 

of working age. That change coincides precisely with the country’s 

extraordinary economic surge. 

Fall 2006 u InternatIonal outlet Journal 11

Dundalk, Banbridge wage a market skirmish 

In the shopping-center business, good economic times 

are often heralded by hard-fought battles to be the 

first to open in a market. The two planned centres 

for Ireland – GML Estate’s The Outlet at Bridgewater 

Park in Banbridge, Northern Ireland and ING’s Ballymac 

Shopping Outlet in Dundalk, Ireland – have been slugging 

it out for the last couple of years. 

The Outlet@ Bridgewater Park 

The OUTLET is the first phase of Bridgewater Park, a 

mixed-use retail, leisure and business park on 100 acres 

with a 400-metre frontage to the A1. The FOC will provide 

19,220 m² of GLA, including 80 shops, several cafes, coffee 

shops and restaurants, and a satellite tourist-information 

bureau. It will be built in a contemporary style, laid out 

as a single curved pedestrian street with all shops facing 

inward; 1,500 parking spaces will be provided within the 

semi-circular design. 

According to Phil Cottingham, portfolio director of Land 

Securities, which is also involved in Gunwharf Quays, The 

Galleria at hatfield and Livingston Factory Outlet, more 

than 50 percent of the property has been either leased or 

reserved and the scheme is well on target for completion in 

Easter 2007. he adds that 70 percent of the space will be 

under signed leases by Christmas and 90 percent of the units 

will be occupied at the opening next year. 

Also, construction is running about four weeks ahead of 

schedule, as the steelwork has been completed and storefronts 

are taking shape. 

Signed Tenants at The Outlet include 

Armani 

Claire’s Accessories 

Clockwork Orange 

Designer Studio 

ex- Z 

Ghost 

Joseph 

Marks and Spencer 

Mexx 

Mountain Warehouse 

Nitya 

Oasis 

Olsen 

Pilot 

Ravel 

Regatta 

Tog 24 


Ballymac Shopping Outlet 

Ballymac Shopping Outlet in Dundalk arrived on the 

scene with the backing of investment powerhouse ING 

and a site ready to encompass 1.75 million people within 60 

minutes, rising to 2.9 million within 90 minutes. 

Then construction on the planned 15,479-m² scheme 

slammed into slow gear when an early summer judicial review 

halted construction until 1 September. According to 

a story in August in The Argus newspaper, this ruling gave 

The Outlet a head-start. 

Billy McKinney, managing director of RJ McKinney 

Ltd, acting for Coverfield Developments and ING, told 

The Argus, “At the moment I am still confident that it will 

go ahead…September 1st was the earliest date we could 

move on site, otherwise we would have been in contempt 

of court.” 

he also told The Argus that although the two projects 

are in competition for the same tenants, “ING have already 

invested e16 million to e19 million in the project, and it if 

was a boxing match, there would be no contest.” 

Ballymac’s Web site says construction on the e60 million 

scheme is scheduled to start any time from now. Some 

40 percent of the space has been let and negotiations with 

retailers continue. 

Factory Outlet Centres in Ireland 

TRADING 

Center Location Developer GLA sm GLA sf Opening date 

Killarney Outlet Centre Killarney, Ireland Green Property plc 8,357 90,000 July 1999 

Linen Green Moygashel, N. Ireland 

Moygashel Community 

Dev. Assoc. 

Both are on the new A1 Euroroute, with GML’s 

scheme 26 miles south of Belfast and ING’s scheme 22 

miles further south, 48 miles equidistant from Belfast 

and Dublin. Both have impressive catchments and 

both have been successful in their preleasing efforts, 

although they want the same tenants. An update on 

each follows. 

Signed tenants at Ballymac include: 

Antler 

Basile 

Book Depot 

Mandarian Duck 

Next 

Papermill 

4,643 50,000 November 1999 

Rathdowney Designer Outlet Rathdowney, Ireland AWG Outlets 9,285 100,000 2001 

Junction 1 Antrim, N.Ireland Junction One Ltd 28,346 305,000 2004 

Kildare Village Kildare, Ireland Value Retail Plc 9,285 100,000 Summer 2006 

Total GLA of open FOCs 

PLANNED 

59,916 m² 645,000 sf 

The Outlet, Bridgewater Park Banbridge, N.Ireland GML Estates Ltd/Land Sec 19,220 207,000 Easter 2007 

Ballymac Shopping Outlet Dundalk, Ireland ING/ Orana/ Land Securities 15,479 166,705 2008 

Total GLA of planned FOCs 34,699 m² 373,705 sf 

Source: VRN/IOJ

Junction One thrives as Ireland booms 


It seems as though Junction One, the outlet centre in Antrim, 

Northern Ireland, has been around for nearly a decade, and 

in a way it has: seven years getting approvals and close to 

three years actually open and operating. 

“Approvals take a very long time in Europe,” says John 

Drummond, managing director of The Guinea Group, which is 

partners on Junction One (as well as K Village outlets in Kendal) 

with CUSP, The Kennedy Group and Dunalastair Estates. 

“It took a long time to get people used to the idea of an outlet 

centre in Northern Ireland, and then it took a fair bit of time 

to get the retailers interested because most didn’t have many 

– or any – retail units of any kind.” 

When the centre opened fully leased in May 2004, he says, 

many of the 55 tenants were there by virtue of opening their 

first retail units. 

Booming beginnings 

While Junction One wasn’t the first to open in Ireland (see chart 

page 12), the centre has made a mark since opening when shoppers 

desperate for branded bargains created 10-mile traffic jams. 

Since then, more than 7 million people have visited the 

23,000-m² centre that will soon expand to more than 28,000 

m², with 90 to 100 stores. When that 5,600-m² expansion opens 

in October, Junction One will be the second-largest factory 

outlet centre in the UK, behind McArthurGlen’s 35,000-m² 

Cheshire Oaks and more than 50 percent larger than either of 

the planned Irish outlet centres at Banbridge, County Down 

and at Ballymac near Dundalk in the Republic of Ireland. 

Work has already started on yet another Junction One expansion, 

comprising 3,000 m² and 30 units that will open in 2007. 

REALM, Rohleder Lumby and OKT are assisting the Guinea 

Group with leasing. Drummond says that 80 percent of Junction 

One’s tenants are company owned, but only a relatively small 

number are domestic. “Ireland hasn’t produced a huge retail 

portfolio,” he says. “Less than 10 percent are Irish and most of 

those are textiles. Most of our fashion tenants are UK or universal 

brands,” such as the 836-m² Nike that opened a year ago. 

In addition to the factory outlet offer, a retail and leisure park is 

being developed on the site with restaurants, hotel, multiplex cinema 

and a range of supermarkets. Already operating are discount 

supermarket Lidl, Burger 

King, a petrol station with 

a Costercutter retail store, 

plus a 3,500-m² homebase 

with garden centre 

store, a state-of-the-art 

car wash and a Red Panda 

restaurant. UK restaurant 

chain Brewer’s Fayre and 

British grocery chain Asda 

have signed leases, and 

construction has begun on 

the 90-room holiday Inn 

Express hotel, which will 

open by summer 2007. 

Thanks to the strong 

economy and a population 

that, although 

comparatively small, 

loves shopping, sales at 

Junction One are look- 

ing rosy. 

“We’re in our third year of trading and we’re doing very well,” 

Drummond says. “Our comps have increased over 20 percent 

every year.” 

Drummond acknowledges that marketing is a big job, particularly 

with today’s public having such a keen understanding 

of the value equation. 

Equal opportunity marketing 

So to attract shoppers, Junction One markets to everyone. 

“There are only so many people in our market,” Drummond says, 

noting that the centre is off the M2 Motorway 20 minutes west of 

Belfast city centre. “Northern Ireland has just 2 million people, but 

compare that population for a whole country to Cheshire Oaks, 

which has a catchment of 6 million within a 20-minute drive. 

“Because of our limited population, we go for everybody except 

the most hard-pressed,” he says. “Over 40 percent of our shoppers 

are wealthy achievers with household incomes of e120,000 and up. 

Over 60 percent are a combination of wealthy achiever, comfortably 

off and flourishing families – those are the middle management and 

above people, who have kids in private schools and the wife doesn’t 

work; she goes shopping and to the gym. The remainder are the 

secure families and the struggling guys. We don’t have a lot of yuppies. 

The predominate age level of our shopper is 35 to 44 years old, 

and they’re willing to spend 20 percent or more of their income on 

fashion and footwear. They’re pretty brand conscious.” 

Drummond heartily believes in customer research, having 

conducted five exit surveys and three focus groups that have 

told him all sorts of things about his shoppers, from their average 

stay (84 minutes) to their postal codes, and which stores they 

shop in and where they spend their money. And he’s pleased 

that 80 percent of Junction One shoppers are repeat customers, 

which shows high customer satisfaction. 

“We do get shoppers from southern Ireland and overseas, as 

well,” he says, “as we’re on the route for The Giants Causeway, 

Bushmills Distillery and the North West Coast – 20 percent of 

our customers are new, and that’s healthy.” 

What works well in the search for new customers for Junction 

One, he says, is TV advertising. “Ulster TV covers all of Northern 

Ireland and great chunks of the South, so there’s no waste,” 

he says. “A heavy campaign week on Ulster TV is e30,000 

– that would buy half a 

day in London and most 

of it would be wasted. On 

Ulster TV, we can afford to 

communicate often.” 

Print advertising includes 

Chinese publications, 

mainly to target the charter 

coaches filled with tourists 

who love to see outlet stores 

stocked with footwear and 

apparel made in China. For 

instance, Drummond says, 

“At Kendal we get coaches 

full of Chinese people shopping 

at the Clarks shoe 

store. The shoes are made 

in China and these visitors 

Because many brands had no retail offering in Ireland, Junction 

One incubated new outlet chains by helping their companies open 

their first stores. 

bring in outlines of their 

friends’ feet. They can 

empty a store.” n 


McArthurGlen heads to Greece 

Shopping and innovative ideas in high demand in Attike 


Having made its mark with 16 outlet 

centres across Europe, including 

seven in the UK, two in France, 

three in Italy, two in Austria, two in Germany, 

along with projects planned in Austria, 

Germany and Italy, McArthurGlen has come 

up with a real surprise for its next serving: a 

future project on a fast track in Greece. 

This summer, McArthurGlen signed an 

e80 million development deal to open 

its 17th location at Yalou, 25 km east of 

central Athens. The centre is scheduled 

to open in autumn 2008, covering 25,000 

m² and accommodating approximately 125 

stores. The Yalou outlet centre is part of a 

23-hectare site that includes big box retail 

and a hypermarket anchor. 

Yalou has a catchment of 4.5 million 

people within a 60-minute drive. That was 

the crux of the reason to look to Greece 

for FOC expansion. 

Outlet retailers have long wanted to 

tap into the cosmopolitan Athens market, 

and the city’s performance during the recent 

Olympic Games proved its value as 

an international-brands market. A new 

ring road around Athens and a massive 

transportation infrastructure were built 

for the games, opening up accessible land 

for development. 

Prior to the vastly improved transportation 

system, Athens was considered to be a 

fully built-out city. Now, new projects are 

popping up everywhere – and even last year 

Greece had the lowest shopping center provision 

per capita in the European Union. 

Store brand interest 

“Yalou represents an excellent opportunity 

to establish a solid platform in Greece 

that will add value to the brands we bring 

into the project,” J.W. Kaempfer, chairman, 

McArthurGlen, said in a press release. 

“There has already been significant interest 

from some of the more illustrious names in 

our portfolio and I am confident that with 

the location and proximity of Yalou to Athens, 

this project will fill the needs of even 

more brands that have long championed 

the economic growth and readiness of the 

Greek market. We intend to bring the 

same awarding-winning presentation and 

performance that constitutes our success 

throughout Europe.” 

McArthurGlen, which has noted that 

it has no shortage of investors interested 

in the Yalou scheme, has joined forces 

with Bluehouse Development as its joint- 


venture partner. Yannis Delikanakis, 

chairman, said, “We intended to do this 

deal with a world-class partner with a 

proven management team. This deal 

not only fulfills that aim, it also delivers 

considerable economic benefits to the 

community. New jobs and revenues will 

be generated in the community as a result 

of this experience. We are especially 

pleased to be able to introduce this project 

to the Greek market under the aegis of a 

partner as performance-oriented and quality-driven 

as McArthurGlen, who has a 

track record for making such contributions 

to the communities they enter.” 

Elmec Sport’s concept 

While McArthurGlen’s project will be 

the first purpose-built outlet centre in 

Greece, the concept has had something of 

a forerunner since 1999 when Elmec Sport 

S.A., the exclusive distributor of Nike apparel 

and shoes in Greece, Cyprus, Bulgaria 

and Romania (and a seasoned apparel retailer), 

opened a discount department store 

in Athens. Factory Outlet S.A. operates in 

a 13,000-m² building on Pireos street, Neo 

Faliro, clearing out-of-season goods. 

In September 2004 Elmec formed Athens 

International Airport SA to develop 

a new-construction, 13,000-m² discount 

department store in the Commercial Park 

of Eleftherios Venizelos Airport. Its opera- 

McArthurGlen’s only competition 

thus far in the Athens 

market are Elmec Sport’s concepts, 

which are positioned as 

discount department stores 

selling out-of-season goods. 

tions will mirror Factory Outlet on Pireos 

street, offering a variety of branded apparel 

and footwear products at prices at least 30 

percent lower than the original. 

Elmec Sport also represents the legendary 

American motorcycle company harley- 

Davidson and Italian fitness-equipment 

manufacturer Technogym. 

With new ideas sprouting everywhere and 

the demand for retail so high there, McArthurGlen 

sees Greece as a logical market 

for its aggressive and continued expansion 

plans. This year, the company has opened 

Barberino Designer Outlet near Florence, 

Italy, and has taken over management of 

the B5 outlet centre, Berlin, Germany and 

BIGG outlet, in Parndorf, Austria (see page 

20 for related story). Furthermore, the London-based 

developer will open a centre in 

Salzburg, Austria, and one in Naples, Italy, 

within the next 18 months. McArthurGlen 

is also evaluating other possible third party 

management and leasing opportunities. 

Bluehouse Development, McArthur- 

Glen’s partner in Greece, was established in 

2005 and is a real estate investment advisory 

firm based in Athens. It is an advisor to 

Bluehouse Capital Partners I, a property 

fund launched in 2005 targeting investments 

in Southeast European property 

markets. The fund has invested in 16 assets 

in Romania, Bulgaria and Greece covering 

the office, residential and retail sectors.

ING plans Melbourne outlet scheme 

Around the world neglected docklands are turning into lively 

districts offering a mix of commercial and public facilities. 

By TOM KIRWAN, Senior Editor 

ING Real Estate Development is aiming 

to make an outlet centre the retail 

star of its AUD $1.3-billion (e780 

million) waterfront development – Waterfront 

City – that is currently under 

construction in Melbourne, Australia. 

A harbour Town Brand Direct Outlet 

centre will be a big part of Waterfront 

City, a massive redevelopment that one 

ING exec told a local paper is “all about 

intimacy, community and atmosphere, not 

oversized apartments and office towers.” 

The site is the Melbourne Docklands, 

where an urban redevelopment is under 

way that covers more than 19 hectares 

(47 acres) and offers 7 km (23,000 feet) 

of waterfront. 

The Waterfront City project will nearly 

double the size of the city’s central business 

district. Upon completion, about 20,000 

people will live there, and 25,000 people 

will be employed in the Docklands. 

ING and Queensland retail and 

residential developer Lewis Land are old 

hands at outlet-centre development in 

Australia, having together developed 

three outlet projects there since 1999. 

Now they are hoping to capture the 

Melbourne market with their harbour 

Town outlet-centre formula. 

“harbour Town is currently under 

construction, with completion due prior 

to the end of 2008,” says Barry Stockton, 

leasing director for ING Real Estate Development 

Australia. 

The outlet centre will have plenty of visitors 

to draw from: Waterfront City, when 

completed, is anticipated to draw up to 12 


million visitors per year, ING officials say. 

That’s because there will be so much to 

do there: Waterfront City will be home to 

200 stores, 18 restaurants, 500 homes and 

some commercial office space, plus other 

venues, including a wide variety of bars and 

nightspots. ING is promoting much of the 

area as Melbourne’s new waterfront playground, 

a destination replete with a public 

piazza, the outlet centre, many restaurants 

and a 120-metre (402-foot) ferris wheel. 

85 tenants expected 

ING expects to have about 85 stores 

in the outlet centre, which will be about 

19,251 m2 (207,200 sf). Each store will be 

about 226 m2 (2,400 sf). While the developers 

aren’t releasing tenant names, they 

say they expect mostly domestic brands, 

plus a healthy dose of international tenants. 

Several brands that are well-known 

in the U.S. outlet business that have entered 

one or more of the ING/ Lewis Land 

outlet properties in Australia include Nike, 

Polo Ralph Lauren, Fila, Esprit, Mikasa 

and Levi. 

“The anticipated number of international 

retailers is 27, and 46 will be Australian 

retailers,” says ING’s Stockton, 

adding that the balance will be made 

up of local businesses and fast-food restaurants. 

Tenants are being recruited from 

among the 400 stores that lease space in 

the three Australian outlet centres ING 

co-owns with Lewis Land. “ING Real 

Estate is also a global property group 

that owns and manages a number of 

outlet centres in Europe and the United 

Harbour Town Brand Direct Outlet centre will be a big part of the 19-hectare, 

massive redevelopment project, which features 7 kilometres of waterfront. 

A 120-metre-tall Southern Star Observation 

Wheel will be a chief attraction. 

Kingdom,” according to Stockton. “The 

organization will be working closely with 

its international network to entice new 

outlet operators to Australia. There will 

be no anchor tenants as such: Brand 

Direct is the anchor in and of itself.” 

The design for the retail portion of 

the Waterfront City project is based on 

the simple concept of two streets linking 

festival retail on the waterfront to an entertainment 

area deep inside the site. 

“Australian outlet centres are generally 

not as up-market as the European model,” 

Stockton says, “as they are more leisureoriented 

and apart from the men’s and 

women’s fashion, tend to feature a large 

component of housewares.” 

In some ways, the centre is taking 

its cues from the three-year-old Perth 

harbour Town outlet centre that attracts 

about 1 million visitors a month. That 

centre, says Stockton, “is also a two-level, 

outdoor centre that comprises 110 shops 

and is located on the fringe of the central 

business district. The centre is performing 

particularly strong, with traffic flow 

and turnover up 20 percent this current 

year, reflecting the attractiveness of this 

style of retailing within a new market. 

We see Waterfront City mirroring this 

success formula.” 

There are two other Brand Direct outlet 

centres, in Adelaide and Gold Coast (in 

Biggera Waters, 15 minutes north of Surfers 

Paradise), both open since 1999. n

Outlet retailing comes to Africa 

By MARY JO MELONE, Contributing Writer 

R 

ock bands. Clowns. Fire eaters. 

Live radio broadcasts. Throw 

in personal shoppers who gave 

makeovers to some lucky customers, and 

you’ll get a feel for the hoopla associated 

with the opening of Africa’s first outlet centre. 

Sable Square – Outlet Shopping Village 

was to open in a suburb of Cape Town, 

South Africa, at the end of September. 

Sable Square is not just the first outlet 

centre in South Africa, but the first on 

the continent of Africa. 

“There’s nothing like it,” says Caroline 

Coates, assistant marketing manager for 

Spearhead Property Group, which is the 

developer. “We’ll be the first one.” 

The e30 million centre, which will eventually 

total 22,000 m², is a 15- minute drive 

from Cape Town’s city centre and is sited 

in one of the area’s hottest neighborhoods, 

Century City, which includes a full-price 

retail project, Canal Walk. An estimated 

40,000 cars pass by the location daily. 

Being first in the outlet business in Africa 

has put Sable Square in the peculiar 

marketing situation of both promoting 

itself as well as educating the public on 

what an outlet centre is and is not. Now, 

Coates says, the centre is in a “heavy, 

heavy communications phase. People 

don’t automatically know what a retail 

outlet village is.” 

Consumers have to learn the difference 

between outlet stores and factory stores, 

which are commonplace in South Africa. 

Clothing manufacturers sell seconds in 

factory stores, chiefly in a development 

called Access Park, also in Cape Town. 

“Access Park caters to the lower end of 

the market,” Coates says. By comparison, 

Sable Square’s stores will sell first-quality 

fashions, from previous seasons, at a 30 

to 50 percent discount. 

The outlet centre has noticeably upset 

South Africa’s full-price retailers, Coates 

says. “They’ve been making a fuss,” she 

says. “I think they’re concerned that 

people will suddenly stop coming to 

Canal Walk.” 

But she argues that Sable Square will 

complement Canal Walk. A consumer 

can shop the latter if she’s searching for 

this year’s fashions, while Sable Square 

will carry stock from previous seasons for 

those who are not so cutting-edge. 

The 12,000-m² first phase of the centre 

was fully leased at opening. Tenants 

include well-known brands made by 

South African licensees, such as Adidas, 

Levi (the South African licensee of Levi 

Strauss), Reebok and Skechers. Spearhead 

predicts that as many as 50 stores 

will tenant Sable Square’s 10,000-m² 

phase 2, set to open in 2007. 

But even then, South African retailers 

will have to be taught about the advantages 

of outlets. “Retailers in South 

Africa still have to be educated about the 

concept,” says Alf hartzenberg, a major 

retailer. “Our group relies heavily on outlet 

retail to maintain a balance between 

new and excess stock sales.” 

All Sable Square tenants have to agree 

not to sell knock-offs. According to Mike 

Flax, CEO of Spearhead, Sable Square 

leases will have a zero-tolerance clause 

and centre management will immediately 

dispose of fakes from stores. If counterfeiting 

persists, the stores will be evicted. 

The source of the concern, Caroline 

Coates says, is that so many Nigerians sell 

counterfeit designer goods and might view 

Sable Square as another venue to sell their 

knock-offs. “The point must be, loud and 

clear, that Sable Square is offering ‘high 

quality, protected brands,’” Coates says. 

All Sable 

Square 

tenants 

must sign 

a “ No 

Counterfeit 

Goods ” 

agreement. 

Even during construction – the above photo was taken in March – Sable Square 

was preparing consumers for the first outlet centre on the African continent 

with a sign that reads, “Where great value is always in fashion.” 

The first phase of Sable Square will not 

include any of the high-end brands such 

as Gucci, Versace and Louis Vuitton as 

those are found only in the South African 

capital of Johannesburg. Once Sable 

Square has established a track record of 

solid performance, Coates says Spearhead 

will approach them. “I think that in our 

second phase, we will be able to approach 

those guys with confidence.” 

The centre was designed by retail 

expert Bentel Associates International 

with an ultramodern look surrounding a 

main square. Small cafes complement the 

shops. The centre will have 1,095 parking 

spaces on two levels, and the centre’s 

second story will house an international 

hotel school and room for 30 hospitality 

industry students to live there. n 

For more information contact Anthony 

Wolpert, Development Manager, 

Spearhead Group, 42 Hans Strijdom 

Avenue, Foreshore, Cape Town, South Africa 

8001; +99 27 21 – 425 1000; email 

awolpert@spearheadprop.com. 


Leoville Premium Outlet keeps a low profile 

By Stephanie Kramer, Berlin Correspondent 

In May 2005 Leoville Premium Outlet 

opened its doors to shoppers just 

outside Vienna, arriving on the outlet 

scene as “the first and only premium outlet 

centre in Austria.” 

Developed and run by European Outlets 

(EO), the scheme seems to be following 

the low-profile lead of London-based 

outlet-centre developer Value Retail, 

which has become renowned for quietly 

opening a centre that’s only partially 

leased in order to save room for the most 

cautious, yet desirable, tenants. 

Indeed, Michael herscovici, formerly 

of Value Retail and now one of EO’s two 

managing directors (the other is Michael 

Griesmayr), explained to the local Badener 

Zeitung newspaper that the nature of premium 

outlet centres is that one has to be 

selective when choosing tenants. 

And so it goes that in May 2005, the centre 

held a soft opening of 16 of its planned 

60 stores. By October 2005 an estimated 

400,000 shoppers had already visited the 

centre, and by the end of this summer, 32 

tenants were up and running, just slightly 

over half of the centre’s occupancy. 

Soft openings are generally held to give 

stores time to get their retail acts together, 

to hone selling and merchandising skills, 

and to gauge inventory levels. All of 

those things are better done with practice, 

and smooth operations are the aim of a 

premium outlet centre. 

According to Bettina Schuckert of 

European Outlets, a premium outlet is 

defined by premium location, premium 

architecture and premium brands. Only 

if these three criteria are met, she says, 

can brand names be discounted without 

risking their image. Equally as important 

is ensuring that “brand-aware bargainhunters 

[can] hunt for bargains without 

losing their image...without a rummage 

sale atmosphere.” 

This is achieved by promising both shoppers 

and tenants something to which only a 

select elite have access: Leoville describes 

itself as offering “exclusive stores” in an 

“exclusive atmosphere” with “exclusive 

walkways” and even “exclusive food.” 

Right down to having an “exclusive fountain,” 

Leoville promises a unique shopping 

experience. There is also a “Leo-VIP Club” 

with a bi-weekly newsletter for members 

announcing special offers, invitations to 

special events and other goodies. 

Shoppers will find clothes and other 

items at discounted 30 percent to 70 

percent off the retail price, though the 

price structuring at Leoville varies slightly 


Leoville Premium Outlet is less than 30 minutes from central Vienna in Leobersdorf, 

one of the wealthiest areas in the region; 5.6 million live within a three-hour 

drive of the centre. 

from that of a traditional FOC. Not all 

items are discounted up front, but may be 

offered for example, as “10 percent off any 

two shirts not already discounted.” 

Leoville’s target shopper is a high- 

income woman over 25, with or without 

children, who visits the centre by car, 

perhaps with friends or family. 

Located on a major highway, the A2, 

which runs through Austria to Italy 

to the south, Leoville is accessible to 

shoppers from the region (Vienna is a 

mere 30 minutes away) and tourists 

alike. Situated in Leobersdorf, Leoville 

is within a three-hour drive of hungary, 

the Czech Republic, or Slovakia. 

A total of 5.6 million people live 

within the catchment area. There is 

shuttle service from Vienna, but most 

shoppers are expected to arrive by car, 

and there are 880 parking spaces to 

accommodate them. 

Leoville is currently 11,000 m² but 

there are plans to expand to 19,000 m². 

As elsewhere in Europe, initial resistance 

on the part of local retail was tough and 

herscovici spent seven years trying to 

convince local communities of the benefits 

of the centre. 

European Outlets plans to forge ahead 

with another two or three more centres 

over the next five to seven years in neighboring 

countries. n 

Leoville tenants include: 

Airfield 

Alizé 

MaxCompany 

Baldinini 

Eno Town 

L’Occitane 

Heindl 

EX10 

Frottana 

Goldix 

G.G.SUN (Sonnenbrillen) 

G.K.Mayer Shoes 

Linea A 

HumanicOutlet 

Interspiel 

Käthe Kruse 

La Rossi Gold (Uhren) 

Marc Picard (Taschen) 

Mila Schön 

Milano Italy 

Morawa Preis-Bestseller 

Salamander 

Salewa 

Shirt House 

S-Line 

Triumph 

Palmers 

Walk Safari 

Wesley 

Wexmann London 

European Outlets is taking the slow-and-steady approach to leasing at its Austrian 

centre, intending to hold out for the most upscale brands.

Parndorf a Bigg deal 

McArthurGlen said in July that it has 

taken over management and leasing 

of its next-door neighbor in Parndorf, 

Austria, the BIGG Outlet Centre. The 

move is McArthurGlen’s second foray 

into third-party management, its first 

at the B5 outlet centre at Brandenburg 

near Berlin, Germany, that was announced 

in June. 

McArthurGlen CEO Julia Calabrese 

said, “Our success in managing the 

outlets we developed, as well as positive 

feedback from our brand partners, led 

us to look at third party management 

as an obvious and immediate expansion 

for our brands. We have an existing 

centre at Parndorf, McArthurGlen 

Designer Outlet Parndorf, and the offer 

at BIGG Outlet Centre is complementary 

to that. With the two outlets combined, 

we have created the biggest outlet 

A little more than two years ago the 

Miller Group was presented with the idea 

of partnering on an FOC in hungary. By 

all accounts, the developer spent a quick 

few weeks thinking it over and then 

plunged in full force, convinced that the 

strategy would pay off. Chief executive 

Phil Miller noted at the time that he 

especially enjoyed the entrepreneurial 

aspect of his family-owned company. 

And in early September, the two-yearold 

Premier Outlets Centre in Budapest 

sold for e70 million – a 6 percent initial 

yield – to Morley Fund Management, 

which acquired the centre on behalf of 

its Aviva Central European Property 

Fund (ACEPF). GVA Grimley Outlet 

Services will continue managing and 

leasing the 18,000-m² centre. 

The centre, which was a joint venture 

with Raiffeissen Ingatlan, was the first 

FOC to open in hungary, and its 82 

tenants include Calvin Klein, Columbia, 

Ecco Shoes, Fila, Levis/Dockers, Mango, 

Mexx, Nike, Pepe Jeans, Quiksilver, 

Roland/Tommy hilfiger, Russell Athletic, 

Sarar, Vans and Wilson/Mission. 

Julian Taylor, a fund manager at 

Morley, said “This is the first retail asset 

Morley has acquired for ACEPF and 

we are pleased to have acquired such a 

high quality property, particularly after 

the marketing attracted a significant 

number of interested parties. We believe 

it will deliver a good return for our 

investors over the long term.” 


retailing space in Northern Europe.” 

Together, the two outlet centres total 

37,242 m² of GLA. The 11,760-m² BIGG 

Outlet Centre opened in 2005 and is fully 

leased with 29 tenants, including Gerry 

Weber, S’Oliver, Pierre Cardin/Otto Kern 

and Rosner. It was acquired in July for 

e30 million from Austrian developer 

Rene Benko by Warburg-henderson KAG 

Funds, a JV of Warburg and henderson 

Global Investors. The net yield was just 

under 7 percent. 

henderson operates the European 

Outlet Mall Fund, which owns seven 

assets: the B5 in Berlin, as well as 

projects developed by McArthurGlen 

in Troyes and Roubaix, France; Roermond, 

The Netherlands; Castel Romano 

and Serravalle in Italy, as well as 

the 25,482 m² centre in Parndorf. Despite 

its ownership of McArthurGlen’s 

Parndorf centre, the outlet fund passed 

on BIGG as it didn’t fit certain size and 

revenue criteria. 

In addition to the two centres in Parndorf, 

there is also the Leoville Outlet 

Mall, which opened in Leobersdorf in 

2005 (see page 18 for related story). Also, 

New owner for Premier Outlets Center in Budapest 

Miller Group opened Hungary’s only 

outlet centre just two years ago. 

Miller Developments has a second 

Premier Outlet Centre planned in Ringsted, 

Denmark, in joint venture with 

local partner TK Development. The 

Danish centre will be built on a 7 hectare 

site, close to Copenhagen, and will 

provide 12,000 m² of GLA. 

GVA Grimley partner Brendon O’Reilly 

said he thought the sale of the property to 

Morley Fund would open up the FOC acquisitions 

market. “I think we’ll now start 

seeing institutional investors looking at the 

Central European outlet market,” he said. 

Established more than 30 years ago, 

Miller Developments, a division of Miller 

Group, is one of the UK’s leading commercial 

property development companies. 

Through its national and European offices, 

Miller Developments manages large 

McArthurGlen is developing the e90 

million Salzburg Designer Outlet on the 

site of the Airport Centre, which had to 

be torn down to make room. 

Hermes sells Royal Quays 

hermes/REALM Ltd. said in early 

September that Royal Quays in Newcastle 

Upon Tyne, England, had sold to 

North Shields Investment Properties 

for e42 million, about e2.5 million 

less than hermes was hoping to attract. 

The selling price represents a yield of 

more than 6 percent. hermes put Royal 

Quays up for sale through London 

agent Cushman & Wakefield after a 

review of its portfolio found it was too 

heavily weighted towards retail properties 

after a surge in values. 

The property received 10 offers after 

it was put on the selling block in May. 

Peter Everest, managing director of 

WD Ltd., which will manage the property 

on behalf of the new owners, plans 

to spice up the tenancy of the 13,000m² 

centre by bringing in more fashionoriented 

retailers and by increasing its 

marketing. 

scale property development programmes 

throughout the UK and in Europe. 

UK-based Morley Fund Management 

is an independent asset management 

business of Aviva plc, which is one of 

the world’s largest financial services 

groups with over e432 billion of assets 

managed worldwide.

Leasing 

l Ghost, Ravel and Amanda Wakeley are the 

latest signings to Galleria Outlet Centre, the 29,729 

m² scheme in Hatfield, England. Galleria’s 90-store 

offer includes a number of top-name retailers including 

Marks & Spencer Outlet, Pringle, Oakley and 

Liz Claiborne. Purchased by Land Securities in late 

2005, it is the closest outlet centre to London with 

a catchment of nearly 7.3 million shoppers within a 

60-minute drive. All the leases run from one to five 

years, with rents at the higher of a minimum e45 psf 

or turnover basis. 

l Adidas has opened at the Ardennes Outlet Centre in Verviers, 

Belgium. The 11,000-m² centre, which lies equidistant between Brussels 

and Cologne, will 

soon be joined by Carven 

Menswear and by 

Italian coffee operator 

Illy. The centre’s tenant 

line-up includes Nike, 

Puma, Gerry Webber 

and Trespass. It is 

owned by the Comer 

Group and run by UK- 

Adidas joins other Ardennes Outlet Centre 

footwear retailers Nike and Puma. 

Marketing 

based strategic commercial 

development 

advisers BSB. 

l Dubai Outlet Mall 

will be the host venue for 

the Dubai Balloon Festival 

(DBF), scheduled to be a 

main attraction during the 

annual Dubai Shopping 

Festival in December. Mohamed 

Khammas, CEO 

of Dubai Outlet Mall, is 

also CEO of the Balloon 

Festival, which will mark 

the start of the Emirate’s 

annual shopping extravaganza. The balloon festival will feature events for the 

public on the two weekends between 21 and 30 December at Dubai Outlet City 

in Dubailand over two weekends. The 375,000-m² outlet mall is scheduled to 

open this autumn. Slated to become an annual event for the next 10 years, the 

DBF will include the participation of over 100 balloons from across the world, plus 

family entertainment, contests, events for the public, photo contests, music, food 

and other events. Organising the event will be a team of U.S. professionals from 

the Albuquerque International Balloon Fiesta Inc. Companies worldwide are 

sponsoring the event to gain balloon branding. 

l The farmer’s market held every Sunday at McArthurGlen Designer 

Outlet Centre in Swindon, England, has been nominated as one of Britain’s 

favourites. Country Life magazine and property specialists Strutt and Parker 

have launched a campaign to find the nation’s best farmer’s market, and the 

Swindon affair is one of three shortlisted in the Southwest. Michelin-starred 

chef John Burton Race said, “Swindon’s farmers’ market is a venue for local 

specialities, seasonal delights, and the best in local crafts. Produce includes 

traditionally reared meat and poultry, grass-fed lamb, free range eggs, olive and 

Mediterranean salads, farmhouse cheeses, pies and puddings, award-winning 

bread and cakes, Gloucester Old Spot sausages and homemade fudge.” Swindon’s 

entrant is up against two from Carruan in North Cornwall and Tavistock 

in Devon. The winners will be announced in November. 

New tenants at Land 

Securities’ Galleria 

Outlet Centre in 

Hatfield, England, 

include Amanda 

Wakely (left) and 

Ghost (below). 

Coxhead joins LMS Outlets 

Graham Coxhead, MRICS, joined LMS 

plc in June 2006 as director of LMS Outlets 

Ltd, a new division of TK Developments, 

concentrating on designer outlet 

shopping centre investments. Coxhead, 

who is an ICSC member, has some 20 

years experience in developing centres 

throughout the UK and in Europe. LMS 

Outlets are currently active in France, 

Germany, Turkey and the Czech Republic. 

LMS Outlets are co-owners with TK 

Developments of Prague Outlet Center, 

scheduled to open in summer 2007. Additionally, 

LMS is preparing the 22,000m² 

Tournus Fashion Village, a site midway 

between Lyon and Dijon, just north of 

Macon in the heart of France’s Burgundy 

region. This project, 100 percent owned 

by LMS Outlets, is scheduled to open 

summer 2008. 

LMS is also involved in First Fashion 

Village, Silivri, a seaside town near Istanbul. 

LMS has a JV with locally-based Real 

Estate Development (RED) for the 20,000m² 

centre, set to open in autumn 2008. 

Prior to joining LMS plc, Coxhead was 

managing director of development holdings 

of GVA Grimley Outlet Services. 

Correction 

Neil Thompson, associate partner with GVA 

Grimley Outlet Services, has been appointed 

CEO of Warsaw-based The Outlet Company 

for a fixed period of time. A story in the 2006 

Summer IOJ mistakenly said Thompson had 

left GVA. IOJ regrets the error. 


NEW Construction 

Neinver’s 6th FOC 

opens in Spain 

Madrid-based Neinver was set to open its 

sixth factory outlet centre 29 September, Factory 

San Sebastián de los Reyes, in northern 

Madrid. With 120 stores, the scheme could 

become the largest outlet centre in Spain, 

eclipsing in size Neinver’s own three projects 

in Getafe, Las Rozas and Sevilla. 

Factory San Sebastián de los Reyes is in the 

first phase of the new 300,000-m² Alegra business, 

shopping and entertainment park, scheduled 

for completion in the winter of 2007. 

With an investment of e230 million, Alegra 

is the result of joint work through private initiative 

and public cooperation. Neinver has invested 

e55 million on the 23,800-m² centre. 

Under the “Factory” brand name, Neinver 

began developing outlet centers in Europe in 

1996, starting in Spain, then opening schemes in 

Poland in 2002 and in Portugal in 2004. Neinver 

recently said it would open four more outlet 

centers in Poland in the next two years. 

Alegra will be home to the largest Decathlon 

store in Spain – 10,600 m² devoted exclusively 

to sports. For children, Alegra is featuring 

Micrópolix, a children’s entertainment offering 

for kids from 5 to 13 years old. At 8,500 m², 

it consists of 45 thematic spaces that recreate 

a modern, ecological, charitable, committed 

city, where children will be able to play and 

learn by copying and performing more than 

100 different professions. 

Moreover, Alegra will be equipped with 

more than 22,500 m² devoted to sports such 

as mountain biking and track. 

Alegra is located in the northern part of the 

Autonomous Region of Madrid, one of the 

region’s most dynamic areas of development. 

Alegra is in the middle of an area comprising 

more than 15,000 new homes, business parks 

and industrial areas, soon to be joined by the 

new hospital of the North, which is under 

construction. 

FOC planned 

in Vietnam 

Vietnam’s first outlet centre will open in 

December, according to online newsletter 

VietNamNet Bridge (http://english.vietnamnet.vn/). 

Quoting the deputy director of the 

scheme’s wholly foreign-invested developer, 

Nguyen Thi Van Anh, the newsletter reports 

that the e24 million Saigon Factory Outlet 

Mall is being developed in Di An district 

in Binh Duong province in the heart of the 

southern key economic zone. The 30,000-m² 

FOC will include over 200 shops. 

The average cost of leasing space in the mall 

would range from e10 to e15 per m², although 

some areas might range up to e20 per m². 


Foxtown Shanghai opens 

Silvio Tarchini, developer and operator of factory outlet centers in Mendrisio, 

Villenueve and Zurich, Switzerland, opened his fourth project, Foxtown 

Shanghai in June. The centre is in Xingbang Town, in the Songjiang 

District, about 40 minutes from downtown Shanghai, and includes 1,400 

parking spots, plus Italian and Chinese restaurants. Some 70 international 

brands are represented in the centre’s 25-plus outlet tenants, which include 

Adidas, Benetton, Canali, Ecco, Geox, New Balance, Nike, Reebok, 

Samsonite, Sisley and Zegna.

NEW Construction 

Phase 2 of TOC’s 

Piaseczno opens 

Phase 2 at Fashion house Outlet Centre (FhOC) Piaseczno in 

Warsaw, Poland was opened on 23 August 2006, less than a year 

after the centre’s initial phase opened. The expansion brings the 

center to 16,000 m², and a third phase is planned. 

The Piaseczno centre is the latest investment of The Outlet Company, 

which was formed by Belgium developer Liebrecht & Wood and 

a team of the British experts on outlet centres. GVA Grimley handles 

leasing and management of the centre, which resembles Warsaw’s Old 

Town with nice little streets and street lamps. 

Among the tenants in the 3,850 m² expansion are Vero Moda, 

Rossignol, Quiksilver, Olimpia, Vistula, Willsoor, Red Indian, 

Almi Décor and Villeroy & Boch, who join Franco Feruzzi, Puma, 

Wittchen, Levi’s, Wólczanka, Salamander, Converse, Mustang, 

Lee Cooper, Atlantic, Reebok, Gino Rossi, Adidas, Traffic Club, 

Ecco, Pompea, Reporter and others in the center. 

TOC operates two other FhOCs in Poland: in Sosnowiec, which 

opened in February 2004, and in Gdansk, which opened in October 

2005. Piazecno opened in November 2005, and based on the success 

of the centres, TOC is planning to develop a total of six projects, 

possibly adding the next three in Szczecin, Poznan and Krakow. 

Thompson says that from the beginning TOC has strived to 

look and work like the Western European and American outlet 


summer 2007. (See the 2006 Summer IOJ for 

a related story on the Czech Republic.) 

Prague attracts some 7 million visitors a 

year and the Czech Republic has a respectably 

high disposable income level. Still, 

the fight for tenants among the planned 

projects will be something to watch. 

Eric Daguin, managing director of ED- 

Consulting’s Prague office which is managing 

and leasing Outlet Airport Praha 

says, “We’ve been monitoring the Czech 

market for about five years; now is the right 

time to enter, as the market is mature and 

purchasing power is growing.” 

EDConsulting expects e80 million 

turnover in the first year of the mall’s 

operation, Daguin said. The company 

projects that 3 million shoppers will visit 

the mall in the first year, with an annual 

10 percent growth in customer traffic. 

Further, the outlet centre will provide jobs 

to 600 people, Daguin added. 

Outlet Airport Praha will offer a total 

To celebrate the opening of the phase 2 at Fashion House 

Outlet Centre Piaseczno in Warsaw, Poland, Neil Thompson, 

CEO of Warsaw-based The Outlet Company (TOC) invited 

the principal investors in TOC to join him in smashing down a 

joining wall between the centres’ first two phases. From left to 

right are Guido Vandermarliere, Guy Wauters, Neil Thompson, 

Patrick Van Den Bossche, Tom Dootson and Marc Lebbe. 

centres with their mix of world brands, high quality, low prices 

and pleasant shopping atmosphere. he adds that another 

trend borrowed from the Americans and Western Europeans is 

the introduction of brands not related to apparel or footwear, 

such as an interior design shop or a bookstore/café. 

Czech Republic the new hot spot? 

Within the last year three developers 

have stepped up to develop FOCs in the 

Czech Republic, with the latest being 

Prague-based Ponte Carlo GDO. The 

company is scheduled to begin construction 

by yearend on Outlet Airport Praha, 

sited two kilometers from Prague Ruzyne ˘ 

Airport. The 48,000-m² scheme is expected 

to open in November 2007. 

The only factory outlet in the Czech 

Republic is currently Freeport, located 

in hate ˘ near Znojmo, South Moravia, 

close to the Austrian border. In 2005 

Czech developer BDL Czech said it would 

develop an FOC just off the D1 highway, 

66 kilometers from Prague toward Brno. 

BDL Czech’s Exit 66 factory outlet is also 

planning a mid-to-late 2007 opening. 

Recently, TK Development and LMS 

Outlets jointly announced that their 

scheme in Sterboholy – Prague Outlet 

Center – has been granted a full planning 

permit. That centre is scheduled to open in 

of 2,500 parking spots, of which 2,000 will 

be indoors on the ground floor of the mall. 

The upper level will be devoted to retailers 

and a food court. The mall is an entirely 

new concept that the company plans to 

apply in similar factory outlets in Poland, 

hungary and Russia, Daguin said. 

EDConsulting is in talks with brands 

including Adidas, Nike, Puma, Calvin 

Klein, Diesel, hugo Boss, Levi Strauss & 

Co. and Nautica, as well as luxury brands 

such as Giorgio Armani, Dolce & Gabbana, 

Gucci, and Prada that can’t find 

space on Parížská ˇ street in Prague. About 

50 percent of the retail space is committed, 

according to EDConsulting. 

EDConsulting also plans to construct 

a three-star hotel with 200 rooms and a 

building to host a leisure centre at the 

Outlet Airport Praha in 2008. The company 

is in talks with an unnamed Italian 

hotel chain that could enter the Czech 

market via this centre .

OCI jumps hurdles, dashes ahead 

Zweibrücken phase 2 opens; Wolfsburg under construction 


Developing 

D 

a factory outlet centre 

has never been considered an 

easy venture, and when you’ve 

set your sights on Germany, the going 

is even more daunting. But eight 

years after entering the market, Londonbased 

Outlet Centres International is successfully 

soaring along. 

In June construction started on OCI’s 

second German outlet centre, Designer 

Outlets Wolfsburg (DOW), and on 

29 September, the developer held 

a grand opening celebration for phase 

2 of Designer Outlets Zweibrücken (DOZ). 

A look back at the beginnings of the centre 

in Zweibrücken – developed on a former 

NATO air base – explains why the second 

phase is such a cause for celebration. 

“When OCI got involved in the project,” 

recalls hans Dobke, CEO of OCI, “there 

weren’t too many people who believed in 

our vision, that a former U.S. airbase on 

the German/French border could be turned 

into a successful outlet centre where world 

famous brands like Nike, Polo Ralph Lauren 

or Versace would open a store.” 

The 6,500-m² phase 2 of Zweibrucken, to be 100-percent leased by yearend, 

brings the centre’s total GLA to 21,000 m². 

ning,” Dobke says, “litigation can continue the centre not less than 80-percent let, which 

even after the centre has been opened. It will then enable us to fine-tune the centre’s 

took us until July 2004 to successfully re- tenant mix with the remaining 20 percent.” 

solve the last remaining law suit against the In addition to Designer Outlets Wolfs- 

project, which shows how time- and moneyburg, OCI also has two other sites planned 

consuming the permit process for outlet in Germany, near hamburg and Cologne. 

development is in Germany. Consequently Other outlet centres in Germany include 

Developing, leasing, resisting 

Adding to the initial skepticism was that 

the FOC concept was new to Germany in 

1988, and leasing proved difficult – in particular 

for German brands – due to heavy 

resistance and threats by German retail organisations. 

Dobke recalls a night when the 

city centre’s retailers shut down their stores 

an hour early and darkened their windows 

to show the public how the project would 

affect the city’s retail trade. 

When DOZ opened 75-percent leased 

on 8 March, 2001 with 55 outlet stores in 

about 14,500 m², it made news across the 

country as it was Germany’s first purposebuilt 

FOC. 

Tenants included Nike, Adidas, Versace, 

Burberry, Diesel, Lacoste, Aigner and Bogner. 

Polo Ralph Lauren joined the centre with 

its first German outlet store six month later, 

leading the way for numerous brands to use 

DOZ as their first step into outlet retailing. 

The center has been 100-percent leased 

since 2003 and last year attracted 1.3 

million visitors. “Since its opening, the 

scheme has seen a strong, continuous 

development with double-digit turnover 

growth each year,” Dobke says. 

With such positive numbers, Dobke 

was keen to expand. But first there were 

lawsuits to resolve. 

“Due to the peculiarity of German plan- 

we’re even more excited about the long 

overdue opening of the second phase.” 

Phase 2, which soft-opened 85-percent 

leased in July, includes Polo Ralph Lauren, 

Adidas, Strenesse, Puma, Swarovski, 

Rosenthal and Swatch. The centre will be 

fully occupied by yearend, Dobke says. 

Exceeding expectations 

With the phase 2 of DOZ comfortably 

under way, OCI entered a competition to 

develop property in the middle of the city 

centre of Wolfsburg, home of the Volkswagen. 

OCI took all the Wolfsburg dignitaries 

to DOZ so they could see a flourishing 

outlet centre, and in January of this year was 

named winner of the competition. 

DOW will open in summer 2007 on a site 

directly opposite the Autostadt, Volkswagen’s 

theme park that attracts more than 2 million 

visitors per year and has become Germany’s 

second biggest visitor attraction. 

“This project in many aspects has already 

exceeded our expectations,” Dobke 

says. “A year before opening the centre is 

already 50-percent let.” 

The tenant line-up will include OCI’s 

brand partners, as well as fresh, new chains. 

Stephan Schaefer, OCI’s commercial manager, 

says phase one will comprise 50 outlet 

stores and 11,500 m² of GLA, “which in our 

experience we’ve found to be the ideal size 

for the initial phase. Our target is to open 

McArthurGlen’s B5 in Berlin and Value Retail’s 

Wertheim Village (Frankfurt market) and 

Ingolstadt Village (Munich market). n 

JOHN L BuCKSBauM, SCSM 

Chairman 

MICHaEL P. KERCHEVaL 

President and CEO 

RuDOLPH E. MILIaN, SCSM, SCMD 

ICSC Senior VP 

Jay STaRR 

ICSC Senior VP 

FLORIDA OFFICE +1 727 781-7557 

FAX +1 727 781-9717 

29399 U.S. hwy. 19 N., Suite 370 

Clearwater, FL 33761 

LINDa HuMPHERS 

Editor in Chief, ext. 472 

lhumphers@icsc.org 

RaNDy GDOVIN 

Art Director, ext. 451 

rgdovin@icsc.org 

SaLLy STEPHENSON 

Senior Advertising Executive 

+1 847 835-1617 

Fax: +1 847 835-5196 

sstephenson@icsc.org 

KaREN KNOBELOCH 

Advertising Prod. Mgr., ext. 441 

kknobeloch@icsc.org 

International Outlet Journal is a quarterly publication for 

the non-U.S. factory outlet industry. Copyright © 2006 

2 InternatIonal outlet Journal u Fall 2006

2 InternatIonal outlet Journal u 2005

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