Retail Parks - An Asset Class with Great Potential
Investors’ interest in the asset class of retail parks and retail park oriented shopping centers remains high. This is primarily due to the favorable risk/return ratio and the overall good performance of this asset class. Luxemburg-based Corestate Capital Group is currently also assessing the possibility of investing in a new retail portfolio with a total of ten retail parks. Sascha Wilhelm, CEO of Corestate, dicusses these issues.
Q: Why are retail parks so popular with investors?
Sascha Wilhelm: Besides stability, investors’ top priority tends to be high, long-term cash flows – and that’s exactly what they find in retail parks as these come with long-term leases, often for 25 years, with highly creditworthy retailers. Another important aspect is that investors are feeling a certain pressure when it comes to investing. The offering of available core real estate in the top seven German investment locations is limited; in other words, other types of objects – such as retail, logistics and special real estate as well as properties in B and C locations – are gaining in importance. And that’s exactly where the retail parks come in.
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