International fund manager, Henderson Global Investors, on behalf of its €1.5 billion European Outlet Mall Fund (EOMF), has entered into a joint venture agreement with McArthurGlen, Europe’s leading developer, owner and manager of designer outlet villages, for the development of the Designer Outlet centre in Neumünster, near Hamburg.
The opening of the Designer Outlet in Neumünster is planned for autumn 2012, with the initial creation of around 750 jobs. Phase one of the development, part of the overall €120 million investment, will consist of around 100 retail units, with a GLA of 20,000 sq m. Preleasing of the units has already commenced and continues to progress ahead of schedule, attracting interest from top brand names in luxury, premium, designer and high-street fashion, as well as sportswear and homeware.
The new centre is 40 minutes’ drive north of Hamburg, Germany’s second largest city and the country’s wealthiest. It is also in the state of Schleswig-Holstein, one of the most important tourist destinations in Germany, attracting nearly six million visitors a year. The Designer Outlet is located on the B205, the main access road to Neumünster from the A7/E45 motorway linking Denmark with southern Germany, itself a key tourist ‘highway’.
The Designer Outlet centre in Neumünster will be the second Designer Outlet scheme to open in Germany for both Henderson and McArthurGlen. This follows the success of Designer Outlet Berlin, jointly developed by Henderson and McArthurGlen, which opened phase one in 2009 and phase two in 2010, and now offers a total retail space of 20,600 sq m GLA.
Germany currently has the lowest rate of designer outlet space in Western Europe, with 0.9 sq m of outlet space per 1,000 inhabitants* compared with 10 sq m in the UK, the most developed market in Europe. This coupled with the attractiveness of the specific region creates significant appeal to prospective tenants.
Gary Bond, McArthurGlen CEO Development, said: “Neumünster is a very exciting scheme, and we are delighted to welcome Henderson Global Investors as our joint venture partner. We are seeing strong interest from our brand partners to open at the centre. The centre’s location is ideal for a designer outlet, in terms of the number of people living in the catchment and their relatively high income level, as well as the high numbers of international and national tourists, many of whom enjoy shopping as a number one activity while on holiday.”
David Williams, Fund Manager of the European Outlet Mall Fund at Henderson Global Investors, said: “The Fund's strategy is to increase its exposure to core Western European markets where forecast risk adjusted returns are the most attractive. We continue to assess a pipeline of potential acquisitions but will only make investments that match our strict requirements.
“Following the success at Designer Outlet Berlin, Germany remains a key market for us; 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.”
Construction works at the centre are due to start in May. This follows the decision last month by the Federal Administrative Court in Leipzig (BVerwG) to reject the town of Rendsburg’s further attempt to appeal the decision made last year by the Supreme Administrative Court of Schleswig.
Dr. Olaf Taura, Lord Mayor of Neumünster, was pleased with the positive outcome following the Court’s decision, stating: "The Neumünster Designer Outlet center is a key investment, not just for Neumünster but also for the whole of Schleswig-Holstein. It provides innovative and exciting opportunities for both the job market and for tourism within the region.”
Like McArthurGlen’s other Designer Outlets, the Designer Outlet at Neumünster will be individually and thoughtfully designed, reflecting the local architectural style, to offer a unique and fun, day-out shopping experience. All the units will be managed by the brands themselves, which will offer excess stock at year-round discounts of 30-70 per cent.
*Source: Ecostra, May 2010.
Henderson Global Investors