Against all odds, the retail market is resisting. So much so that it posted “the second best historical result over nine months”, explains David Bourla, director of studies at Knight Frank France. “Since the beginning of 2022, the amounts invested in companies have amounted to just over 4.6 billion euros, compared to just under 2 billion euros at the same time last year”, he adds.
Partly due to the opportunities provided by some investors’ acceleration of arbitrage, this performance is explained by a large number of large transactions: 13 over 100 million euros registered in France since January, compared to only four in 2021 as a whole. these 13 major transactions were completed in the third quarter of 2022, including LVMH’s acquisition of the Dray portfolio and Groupama’s sale of 150 avenue des Champs-Élysées. “While flagship sales were very rare in the 1st half of the year in Paris, these two transactions increase the share of shopping streets, which now concentrate 41% of the volumes invested in stores in France against 30% three months earlier”, notes Knight Frank.
A record year for retail parks
After a very good year in 2021, the business parks continue their momentum this year. Indeed, 2022 should be a record year for this asset class. Since January, volumes invested in retail parks amounted to €1.2 billion, or 27% of all invested amounts in the French retail market, compared to an average of 18% over the past 10 years. “While in the 1st half of the year this market was mainly boosted by the disposal of portfolios (Decathlon, Burger King, Buffalo Grill), the last three months have given a lot of space to the sale of large unit assets, such as the “Shopping Parc” of Carré Sénart , sold by URW, and “Enox” in Gennevilliers and “Mon Beau Buchelay” in Yvelines sold to BNP Paribas REIM”, explains Knight Frank.
“The success of retail business parks is undeniable,” says David Bourla. This asset class, which has withstood the health crisis very well and offers attractive returns, also highlights more moderate occupancy costs for retailers and favorable price positioning for consumers at a time when inflation is weighing on corporate profitability and on the French budget. Finally, after many years of sustained development, the trend is now towards a slowdown in the creation of new projects due to a much more restrictive regulatory framework, which limits competition for existing retail parks. »
Shopping centers collect a billion euros, a high amount, but of which 87% corresponds to the sum of four transactions exceeding 100 million euros: URW’s sale of 45% of “Carré Sénart” at the beginning of the year , those in 2. quarter of “Flâneries” in La Roche-sur-Yon and a Carmila portfolio consisting of several galleries, and final sale in the 3rd quarter by URW of the “V2” center in Villeneuve d’Ascq.
“Other major transactions are expected before the end of the year in all segments of the retail market, which will make 2022 a very good year with more than €5 billion invested”, assures the council.
Despite these reasons for satisfaction, the retail market is unlikely to repeat its very good performance in 2022, although it could also resist, nuances Knight Frank. “Despite the shock created by the outbreak of the health crisis and the difficulties faced by certain brands, companies are showing a real ability to adapt. In addition, the local and international clientele is back, the brands have resumed and sometimes accelerated their expansion plans, and projects to creating new areas is constantly reduced, giving an undeniable bonus to the existing one. The sector therefore promises great opportunities for investors who have already benefited for several months thanks to the acceleration of arbitrage and the correction registered on certain types of property,” concludes David Bourla.