a.s.r. real estate

The strong position of food-oriented retail is here to stay

Last year saw a second year of rising turnover in non-food retail, which bottomed out in 2015 after several years of falling turnovers. Food related retail, in contrast, has been experiencing uninterrupted turnover growth for the past decade, in both value and volume, and has proven to be more resilient in the face of years of stagnating consumer spending and competition from online retail. Food related retail will continue to alter the face of the Dutch retail landscape, most notably in city centres and local shopping areas. ASR DPRF focuses on the major city centres and district shopping centres, and is witnessing these trends first-hand as they affect its portfolio and tenant base. In the Annual Report for 2017, the Manager discusses some food related retail trends. The article can be read here.

ASR DPRF’s high street portfolio is becoming more concentrated in the top-20 retail cities (95% as of 2018), and the city centres where ASR DPRF owns its assets are increasingly focusing on food-based retail. Restaurants and cafés, but also other food related retail, make up a large proportion of retail outlets in cities such as Amsterdam and Utrecht and improved turnover for restaurants and cafés, together with increasing consumer spending on dining-out, could yield improved rents. International tourism, less frequent shopping trips and urbanisation are also benefiting food-related retail, which depends on consumers spending more time in city centres.

With respect to local shopping areas, non-food retail is limited in the shopping centres owned by ASR DPRF. Since district shopping centres cater mainly to people’s day-to-day needs, food related retail makes up a significant part of the total turnover of these shopping centres. This is not only limited to supermarkets, who have done very well in recent years, but also specialty stores and local restaurants. A relatively small shopping centre with a solid catchment area is likely to maintain rent levels and avoid vacancy. The Fund prefers shopping centres of up to 10,000 sq. m. with two supermarkets, as these are likely to remain focused predominantly on retail that caters for consumers’ day-to-day needs. Exposure to discretionary consumer spending, such as fashion, is and will remain limited in these locations.

For more information on the ASR Dutch Prime Retail Fund and food-related retail, please contact Edwin van de Woestijne or Bart Vink.

Edwin van de Woestijne
fund director
ASR Dutch Prime Retail Fund
M: +31 (0)30 257 26 54
E: edwin.van.de.woestijne@asr.nl

Bart Vink
fund manager
ASR Dutch Prime Retail Fund
T: +31 (0)6 53 78 49 76
E: bart.vink@asr.nl