Live from Mapic (Cannes) – Managing Director at Heritage – Commerce, Matthieu Gueugnier presents the group’s interest in retail park, which translates into an ambitious development programme in France
Business Immo: How attractive is retail park for commercial brands?
Matthieu Gueugnier: What is the appeal of retail park for commercial brands? The business model of many retail park brands is based on the ability to access large retail outlets at very competitive rents. It’s something they can’t necessarily find downtown. The retail park therefore responds to a request from some retailers. It is this complementarity that can prevent the city centre from being killed. On the other hand, populations are changing and more and more people are living on the periphery. Since the inhabitants prefer proximity to do their shopping, it makes sense that trade should follow and accompany urban migrations from cities.
BI: What are the keys to the success of a retail park? Matthieu Gueugnier: The attraction of the retail park lies in its location, at the entrance to major cities, on major traffic routes offering a substantial daily traffic. It is important to have a very good visibility from these roads, to have if possible a food locomotive, with a fairly strong shopping centre nearby, and a fairly significant parking potential, to facilitate access to the shops by car. From an architectural point of view, the products must have a certain homogeneity. We seek to have not cells built over time by different stakeholders, unrelated to each other, but a real structured building, composed of 15 to 20 cells all displaying the same architecture and the same environment. It is up to us, within this coherent set, to find a sufficiently comprehensive merchandising plan that allows us to present a complete and varied commercial offer. In the 80s and 90s, there was a somewhat anarchic development of retail parks. Restructuring these retail parks today helps to revitalize and restructure city entrances, making them more enjoyable. This approach satisfies both communities and residents. BI: Where will this evolution lead to the French retail park? Matthieu Gueugnier: Basically, the product should not change completely and the location will continue to take precedence. Just because you’ll have ultra-modern architecture doesn’t mean that the sales of the brands will explode. There will be an attractiveness effect at the beginning because it is an opening, but what really matters is and will remain the quality of the location and signs that make up the retail park. So we have to keep the products simple. The retail park “low cost” should not be taken in a pejorative way. It is based on a control of real estate costs: one cannot afford to have an architecture or superficial elements that compromise the economic profitability of the business model of the brands. BI: What does the future hold for Heritage and Commerce? Matthieu Gueugnier: Our development is clearly geared towards retail park. We will not go to branded villages or other specialty products. We have major operations to come near Mullhouse, Cergy and Salon-de-Provence. We have a dozen pipeline transactions, which represent just over 200 million euros of investment, whether it is acquisitions of existing assets or developments of new projects.