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Capital Markets Day
Premium Outlets
3 June 2019
Freeport Lisboa Fashion Outlet
Batavia Stad, Amsterdam
New style coverImage: FLFO009
T:\Corporate Comms (UK & France)\UK\Images\Premium Outlets\2018\HammersonVIA Outlets.zip\HammersonOutlets\Commercial (staged)
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Today’s speakers
3
Otto Ambagtsheer CEO – VIA Outlets
David Atkins Chief Executive, Hammerson
Timon Drakesmith CFO and MD Premium Outlets, Hammerson
Natacha Villas-Boas Retail Director – VIA Outlets
Nuno Oliviera Business Director – VIA Outlets
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Agenda for the day
01 2019 priorities and update David Atkins – CEO, Hammerson
02 Our premium outlets investments Timon Drakesmith – CFO and MD Premium Outlets, Hammerson
03 VIA Outlets strategy and differentiation Otto Ambagtsheer – CEO, VIA Outlets
04 Retail management Natacha Villas-Boas – Retail Director, VIA Outlets
05 Freeport Lisboa Fashion Outlet Nuno Oliveira – Business Director Portugal, VIA Outlets
Tour of Freeport Lisboa Fashion Outlet
4
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2019 priorities
5
Capital efficiency Optimised portfolio Operational excellence
Reducing debt
Pursuing portfolio-wide disposals
Exiting retail parks
Establish City Quarters
Managing structural shift in retail
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Establish City Quarters:
• Good progress with City Quarters concept in 2019 with minimal capital outlay
• Phase 2 planning submitted on Dundrum 115 unit residential scheme, consent anticipated for Q3 2019 with start-on-site 2020
• Consultation launched on Martineau Galleries in Birmingham
• Working up further planning submissions in the UK and Ireland for 2019
Update on 2019 priorities
6
Capital efficiency and optimised portfolio
£140m forecast capex
Portfolio-wide disposals:
• Confident in our 2019 disposals target of more than £500m
• Remain in active discussions for over £900m from across the portfolio
• Dallow Road RP, Luton sale exchanged for £24m (7.6% NIY, 6% below Dec 18 value)
Building 5, Dundrum
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Leasing:
• Remain focused on space repurposing strategy to ensure optimal brand offer for catchments
• Leasing volumes currently behind 2018, although principal leasing in line with ERV
Managing CVAs & tenant failures:
• 2019 YTD, 35 units impacted by admin or CVAs, <2% of group passing rent, annualised impact of c.£1.5m(1)
• 2019 NRI estimated to be c.£3.5m (c.1% of passing rent) lower
than 2018 due to tenant failures(2)
• Our units are typically less affected by CVAs with 49% in
category A vs. 31% for market(3)
Other: • Target cost savings of £7m p.a. now secured
• As previously guided, LfL NRI expected to be negative for 2019 due to challenging UK occupational market
Update on 2019 priorities
7
Operational excellence
Leon, Dundrum
Kitty Café, Grand Central
Text to be finalised hence it’s not aligned with photos
1 Rent impact from closures and CVA reductions excluding potential re-letting mitigation 2 Estimate based on completed and ongoing CVAs as at 29 May 2019 3 Analysis based on Hammerson leases impacted by CVAs between Dec-17 and May-19, weighted by Hammerson’s share of passing
rent pre-CVA
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Premium outlets is a differentiator and source of competitive advantage
8
UK flagship destinations - £2.9bn
France flagship destinations - £1.9bn
Ireland flagship destinations - £1.0bn
Premium outlets - £2.5bn
UK retail parks - £0.9bn
Development & UK other - £0.7bn
29%
19% 10%
25%
9%
8%
Premium outlets
• Very low internet penetration
• Consumer spending on luxury goods growing 3-5% in 2019(2)
• Rental income growth 2019-2020 of 6.2%(3)
• Hammerson’s investments delivered 24% IRR since 2012
Hammerson portfolio(1)
1 As at 31 December 2018 2 Source: Bain 2018 Luxury Goods Worldwide Market Study based on spending on personal luxury goods 2019-25 3 Source: Bain 2018 Luxury Goods Worldwide Market Study. Growth in luxury off-price sales used as a proxy for rental income growth as brand sales drive turnover rent
Landquart, Zürich
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Our premium outlets investments
Timon Drakesmith – CFO and MD, Premium Outlets, Hammerson
9
Kildare Village, Dublin
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Agenda
01 Market overview
02 Our investments – Value Retail and VIA Outlets
03 Key growth drivers
04 Contribution to Group performance and earnings analysis
05 Future strategy
10
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Overview of European outlet market
11 1 Source: FSP’s European Outlet Industry Report March 2017 2 Source: Cushman & Wakefield. Market share by GLA. Total GLA – c. 3.5 million m2
Number of outlets in Europe(1) Leading operators by GLA(2)
Limited number of outlets in Europe with high barriers to entry
High concentration – c. 60% of GLA managed by nine operators
Include Other – is it 213 in total? Unable to find the total number
43
30
25
25
17
13
60 UK
Italy
France
Spain
Germany
Poland
Other
17%
9%
8%
5% 4%
4% 4% 4%
4%
41%
McArthurGlen
Neinver
VIA
Value Retail
Realm
Landsec
ROS
Multi
Concepts &Distribution
Other
circa 3.5million m2
213 outlets
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Tiered European outlet market
12
International fashion and luxury brands
Mainstream fashion brand outlets
Low-end discount outlets <€2,000
€2,000–€10,000
€30,000+
Sales densities €/m2
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Hammerson is the only listed European REIT with strategic exposure to premium outlets
13
Value Retail
GAV £1.8bn, NAV £1.4bn(1)
Leading operator of luxury Villages across Europe.
9 Villages -189,400m2
Hammerson invested since 1998
Hammerson exposure(2): 39%
Hammerson has significant influence with Value Retail plc Board seat
Growth through active brand management and extensions to existing Villages
3rd European outlet operator by sales
11 outlet centres - 259,000m2
Formed in 2014
Hammerson exposure: 47%
Partnership between Hammerson, APG, Meyer Bergman and Value Retail
Hammerson has joint control
Growth through acquisitions and centre reconfigurations
VIA Outlets
GAV £0.6bn, NAV £0.4bn(1)
TEXT FROM MAXIME’S PPT • Value-add asset
management • Improve brand
mix towards popular, high-productivity fashion and accessory retailers
• Upgrade the provision of food & beverage categories
• Enhance the tourism visits through targeted promotions
1 Hammerson’s share at 31 December 2018. GAV reflects IFRS GAV. NAV reflects EPRA NAV 2 Economic interest in VR at 31 December 2018; see Appendices for VR ownership structure 3 YTD April 2019
YTD Performance(3):
Sales growth +11% (FY18 +8%)
Footfall growth +8% (FY18 +4%)
YTD Performance(3):
Sales growth +9% (FY18 +9%)
Footfall growth +7% (FY18 +4%)
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Growth drivers of premium outlets
14
1
2
3
4
Diversity of international visitors
Attractive sales growth for retailers
Strong consumer demand for off-price luxury
Multi-phase extensions
Batavia Stad Fashion Outlet, Amsterdam
5
Active brand and retail management
High barriers to entry
6
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Global personal luxury goods off-price store sales(1)
Strong consumer demand for off-price luxury
15 1 Source: 2018 Bain luxury goods study
Let me tell you about outlets market…
Global demand for off-price luxury illustrated by strong brand performance in Outlets
Strong performing brands in Outlets
€31bn 2018
€47bn 2025F
6.2% CAGR
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Attractive sales growth for retailers
16
10%
7%
13%
9%
12%
11% 11%
8% 8% 8%
0%
2%
4%
6%
8%
10%
12%
14%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2012 2013 2014 2015 2016 2017 2018
VR Sales (LHS) VIA Sales (LHS) VIA Sales Growth (RHS) VR Sales Growth (RHS)
VR and VIA Sales and Sales Growth 2012 - 2018 (€m)1
Absolute sales growth delivered through active management, acquisitions and extensions
1 Figures have been restated at constant FX rates. Sales growth include assets owned for 24 months. Sales include assets acquired from the date of acquisition.
€m
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Diversity of international visitors
17
Value Retail & VIA attract a growing, different and broad range of international visitors
Source: Global Blue and Premier Vision
Value Retail Top three source markets in 2018
China
Korea
Taiwan
China
Hong Kong
India
China
Russia
Korea
VIA
Top three source markets in 2018
Brazil
Angola
China
Russia
Israel
China
China
Israel
Egypt
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Multi-phase extensions – a source of significant growth
18 Note: TDC (total development cost) at 100%
5,800m2 (33 units) TDC £100m YOC +15% Q4 2017
Batavia Stad, Amsterdam
Hede Fashion Outlet, Gothenburg
5,500m2 (45 units) TDC €26m YOC 11% Q2 2017
Bicester Village, Oxfordshire
La Roca Village, Barcelona
Extensions completed in Bicester and Batavia Stad, on-site extensions in La Roca and Hede
2,700m2 (15 units) TDC €11m Opening Q4 2019 2,500m2 (c.25 units) TDC €50-60m Opening Q4 2020
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Significant contribution to Group performance
19
7 year IRR - 24%
214
644
(434)
1,087
1,511
0
200
400
600
800
1,000
1,200
1,400
1,600
Premiumoutlets NAV
Jan-12
Capitalinvested
Income andcapital
distributions
Valuation uplift Premiumoutlets NAV
Dec-18
Premium outlets value creation (£m) (1)
La Roca Village, Barcelona
1 IFRS NAV of Value Retail and VIA Outlets 1 January 2012 to 31 December 2018. Capital invested includes acquisition of VR investment stakes and VIA Outlet acquisitions.
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Value Retail earnings analysis
20
Luxury outlets incur higher costs to generate outperformance
GRI: >60% fixed, remainder turnover; includes brand inducement amortisation
Property outgoings: includes significant marketing costs, as well as other property outgoings, e.g. leasing and car park costs, net of service charge income
£m
0 20 40 60 80 100 120
EPRA Earnings
Tax
Interest & other
EBIT
Administration Costs
NRI
Property outgoings
GRI 118
Value Retail – 2018 earnings walk (£m)
Administration costs: roughly one-third local; two-thirds group
Interest & other: secured debt structure; weighted average cost of debt of 2.7%; net of participative loan earnings from investments in LP stakes in the Spanish villages
(37)
81
(38)
43
26
(2)
(15)
Tax: corporation tax ranges from 19% in UK to 33% in France
36.9% EBIT margin
22.1% EPRA Earnings margin
1 All figures at Hammerson share. Source: 2018 Company Annual Reports and Accounts.
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VIA Outlets earnings analysis
0 5 10 15 20 25 30 35 40 45
EPRA Earnings
Tax
Interest
EBIT
Administration costs
NRI
Property outgoings
GRI
21
Lower cost model operated below luxury end of premium outlets market
£m
GRI: >70% fixed, remainder turnover; includes car park income and inducement amortisation.
Property outgoings: includes local marketing costs and leasing costs, net of service charge
Administration costs: include Value Retail and Meyer Bergman advisory fees, internal staff costs and group marketing costs
Interest: secured debt structure; weighted average cost of debt of 2.3%
VIA Outlets - 2018 earnings walk (£m)
(11)
43
32
(7)
25
(7)
(2)
15
Tax: corporation tax ranges from 5.5% in Switzerland to 25% in Spain and the Netherlands
58.1% EBIT margin)
35.4% EPRA Earnings margin)
1 All figures at Hammerson share. Source: 2018 Company Annual Reports and Accounts.
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Future strategy
22
Vila do Conde, Porto Wertheim, Frankfurt
Value Retail
Continuation of strong organic growth through active brand management and loyalty programme
Growth from delivery of near-term extensions
Continue driving tourism footfall and spend
Open to disposals of Group’s LP stakes at appropriate prices
VIA Outlets
Growth from acquisitions, remarketing, reconfigurations, introduction of new brands and near-term extensions
Broaden attraction to tourism spend
Further strengthen internalised management structure
Ambition for 50/50 joint ownership with APG with enhanced involvement
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PRAGUE SEVILLE WROCLAW ZURICH ZWEIBRÜCKEN
AMSTERDAM GOTHENBURG LISBON MALLORCA OSLO PORTO
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2
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
VIA OUTLETS:STRATEGY AND DIFFERENTIATION
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3
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
AGENDA
Portfolio Overview
Financials and Trading Performance
VIA Outlets’ Vision
VIA Outlets’ Strategy
Q&A
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4
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
VIA OUTLETS PORTFOLIO
The newest and fastest growing owner/operator In Europe. We are a leadingportfolio of premium fashion outlets across Europe, dedicated to making theexperience worth travelling for.
As retail experts, we combine commercial knowledge, agility and solidexperience to partner with our brands and elevate everything we do.
VIA Outlets was founded in 2014. Its principal shareholders include Dutchpension fund asset manager APG and UK REIT Hammerson plc.
The initial operating partners were outlet centre specialist Value Retail andretail asset manager Meyer Bergman.
A unique partnership of property, investment and retail experts
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5
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
5
2017 WroclawWROCLAW FASHION OUTLET
SevilleSEVILLA FASHION OUTLET
FrankfurtZWEIBRÜCKEN FASHION OUTLET
PortoVILA DO CONDEPORTOFASHIONOUTLET
OsloOSLO FASHION OUTLET
20 14 AmsterdamBATAVIA STAD FASHION OUTLET
PragueFASHION ARENA PRAGUEOUTLET
2015 LisbonFREEPORTLISBOAFASHIONOUTLET
GothenburgHEDE FASHION OUTLETZurichLANDQUART FASHION OUTLET
2016 PalmaMALLORCA FASHION OUTLET
VIA OUTLETS PORTFOLIO
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6
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
6
11 Fashion Outlets
9 Countries
Total GLA 259,637m2
+1,100 Stores
+850 Brands
92% Spot Occupancy
VIA OUTLETS PORTFOLIO
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7
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
Gross Asset Value
Net Asset Value Net Rental Income
Vs. LY Vs. LY
€775 M €78 M
€1.62 Bn
FINANCIALS AND TRADING PERFORMANCE
2018 Financials
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8
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
Brand Sales (Vs. LY%)
Footfall (Vs. LY%) SPV (Vs. LY%)
Vs. LY Vs. LY
+30 M (+3%)
€35 (+6%)
€1.07 Bn (+9%)
FINANCIALS AND TRADING PERFORMANCE
2018 Operational KPIs
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9
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
Brand Sales (Vs. LY%)
Footfall (Vs. LY%) SPV (Vs. LY%)
Vs. LY Vs. LY
+9 M (+7%)
€34 (+1%)
€323 M (+8%)
FINANCIALS AND TRADING PERFORMANCE
2019 KPIs – April YTD
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10
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
WE WELCOME OUR GUESTS TO EXPERIENCE BEST-IN-CLASS, BEAUTIFULLY LOCAL, PREMIUM SHOPPING DESTINATIONS ACROSS EUROPE
VIA OUTLETS’ VISION
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11
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
VIA OUTLETS’ STRATEGY
Guest and brand engagement
Redefining the outlet shopping businessmodel through a differentiated,beautifully local approach, focused onGuest and Brand engagement
VIA provides exceptional servicesacross the entire customer journey,beginning online, transitioning to ourcentres, and continuing after eachguest’s visit
Organisationally, VIA Outlets operates adecentralised, matrix organisation thatemphasises empowering centre teamsto deliver continued operational growth
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12
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
11 very different outlet centres across Europe, with differences in:
Size / Positioning Challenges / Issues And above all… Opportunities
There is no ‘one-size-fits-all’ model that will work. A tailor-made approach is necessary for each centre to create value and to meet its 5-year Business Plan targets
Redefining the outlet centre Business model; the consumer demands a unique and compelling experience
Brand offer and mix Digital engagement F&B is key Tourism connections Customer services and hospitality
Further extensions where feasible and acquisitions when appropriate
VIA OUTLETS’ STRATEGY
Organisational priorities
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13
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
REMODELING REMERCHANDISING REMARKETING
VIA OUTLETS’ STRATEGY
THE 3 R’s – transforming outlets to premium fashion outlets
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
Upgrade overall in-centre experience by transformingthe centre into an exciting and enjoyable must-visitshopping destination, where leading brands anddiscerning customers want to be
Focus on retail development and upmarket shopfits togenerate improved performance, and offer anelevated customer experience
Centres that have been renovated or expanded(Batavia Stad, Freeport Lisboa, Landquart, andMallorca) have all seen double-digit growth in 2018 vs.2017
VIA has close to €50m of major CapEx workscurrently on-going across the portfolio, with a proventrack-record of success
VIA OUTLETS’ STRATEGY
Remodelling
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15
2019 | STRICTLY PRIVATE AND CONFIDENTIAL
By continually attracting new brands, exiting poor performers and the selective upsizingand downsizing of key units, VIA is driving sales density growth across all Centres
2018 saw a total of 305 leasing deals executed across all 11 Centres. 309 deals have beenbudgeted for 2019
Remerchandising Overview
Action 2018 Executed Deals
2019 Planned Deals
New 96 124Renewal 101 100
Exit 65 41Upsize 25 21
Downsize 18 23TOTAL 305 309
VIA OUTLETS’ STRATEGY
Remerchandising
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
We implement a tailor-made 360˚marketing
approach, targeting aspirational, domestic and
international customers:
Advertising & PR
Digital marketing
In-Centre events
Events, corporate and VIP program
Cross-marketing with key tourism partners
Collaborations with hotels in key cities
Engaging with the travel trade
Collaborations with tourism offices and
associations across Europe
VIA OUTLETS’ STRATEGY
Remarketing
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
Designed to attract and reward our localguests, delivering loyalty to our brands andrepeat visits to the Centre
Fashion Club members earn 5% in credit fromtheir transactions in participating stores.Members receive access to exclusive offers orevents (e.g. Private Sale)
The data collected allows us to ‘know ourguests’ and target them more effectively
Over 500 participating stores
614,000 guest profiles
+32% ATVhigher vsaverage
VIA OUTLETS’ STRATEGY
Remarketing and the fashion club
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
THANK YOU
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PRAGUE SEVILLE WROCLAW ZURICH ZWEIBRÜCKEN
AMSTERDAM GOTHENBURG LISBON MALLORCA OSLO PORTO
RETAIL
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
VIA OUTLETS – BUILDING ASSET VALUE
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
Our philosophy relies on the Retail teamproviding services and support to thebrands to maximize performance andcreate memorable experiences
RETAIL
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
Budget
TrainingRetail
Academy Program
VOG & M&G
Customized reports
Data Analytics OMA
Store Audits
RAP
Visual Merchandising
RecruitmentVIA JOBS
Elevate lay out´s with retail
commercial view RD
Pop Up´s
Retail & MKT Calendar
Sales Tools;FC; Anonymous Must; Miles; Tax
Free
Benchmarks & Forecast New
Business
Trends
RETAILdaily basis
management
GUEST CENTRICElevate guest
experience Customer service
BRAND ENGAGEMENT
REMERCHANDISINGElevate
tenant brand mix
Brand´s BFF
Campaigns/ Brand
Activations Events
RETAIL SERVICES
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
We have dedicated and highly experienced retail teams in our centres and ata pan–European level, to support our brand partners and ensure ourcustomers have the best shopping experience possible.
We deliver on-site training and development for store teams, recruitmentsupport for fulfilling staffing needs, visual merchandising services, useful exitsurveys/customer feedback, and regular business reviews both locally and inhead offices
We provide full transparency and simple reporting solutions to allow ourbrand partners to optimize performance in our centre, we create helpfulanalysis of peers in each category to draw attention to opportunities andmaximize future potential
For new Brands and Store openings we have an excellent store design teamand central and local, legal and financial teams available to ensure smoothplanning and successful launch
Our commitment to the success of our brand partners is our primary focus
RETAIL
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
“ People do not buy goods and services.They buy relations, stories and magic. ”
Seth Godin
RETAIL
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2019 | STRICTLY PRIVATE AND CONFIDENTIAL
THANK YOU
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PRAGUE SEVILLE WROCLAW ZURICH ZWEIBRÜCKEN
AMSTERDAM GOTHENBURG LISBON MALLORCA OSLO PORTO
FREEPORT LISBOA FASHION OUTLETNuno Oliveira – Business Director, Portugal
May 2019
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2
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
LISBON SNAPSHOT
TOURISM
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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27
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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30
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Before
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
before
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32
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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33
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
After
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FREEPORT LISBOA FASHION OUTLET
what is to come / under discussion
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2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
New Brands
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36
2018 | STRICTLY PRIVATE AND CONFIDENTIAL
FREEPORT LISBOA FASHION OUTLET
Five Year Plan 2018-2023
Brand sales to increase from €123 million to €200 million
Footfall to grow from 3 million to 3.6 million
SPV to increase from €42 to €55
Sales Density up from €4,192to > €5,700
Average occupancy from 81% to 96% by 2020
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PRAGUE SEVILLE WROCLAW ZURICH ZWEIBRÜCKEN
AMSTERDAM GOTHENBURG LISBON MALLORCA OSLO PORTO
THANK YOU!
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Freeport, Lisbon
Q&A
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Notes
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Notes
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Notes
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1
Freeport, Lisbon
Appendices
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Value Retail Villages VIA Outlets centres
Bicester Village, Oxford
GLA: 28,000m2
Boutiques: 161
Batavia Stad Amsterdam Fashion Outlet
GLA: 30,900m2 Units: 130
La Roca Village, Barcelona GLA: 23,400m2 Boutiques: 135
Fashion Arena Prague Outlet GLA: 24,100m2 Units: 99
Las Rozas Village, Madrid GLA: 16,500m2 Boutiques: 98
Landquart Fashion Outlet, Zürich GLA: 21,100m2 Units: 79
La Vallée Village, Paris GLA: 21,900m2 Boutiques: 106
Freeport Lisboa Fashion Outlet GLA: 36,500m2 Units: 119
Maasmechelen Village, Brussels GLA: 19,800m2 Boutiques: 97
Hede Fashion Outlet, Gothenburg GLA: 16,100m2 Units: 52
Fidenza Village, Milan GLA: 20,900m2 Boutiques: 120
Mallorca Fashion Outlet GLA: 30,500m2 Units: 78
Wertheim Village, Frankfurt GLA: 21,200m2 Boutiques: 113
Wroclaw Fashion Outlet, Poland GLA: 13,700m2 Units: 88
Ingolstadt Village, Munich GLA: 21,100m2 Boutiques: 113
Sevilla Fashion Outlet GLA: 15,800m2 Units: 64
Kildare Village, Dublin GLA: 16,700m2 Boutiques: 98
Zweibrücken Fashion Outlet, Germany GLA: 29,100m2 Units: 114
Vila do Conde Porto Fashion Outlet GLA: 27,800m2 Units: 117
Norwegian Outlet, Oslo GLA: 13,300m2 Units: 96
Premium outlets portfolio
2
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Value Retail (1) VIA Outlets (1)
2018 2017 2018 2017
Brand sales (€m) (2) 2,903 2,693 1,071 930
Brand sales growth (%) (3) 8 8 9 13
Footfall (m) (2) 36.8 35.4 30.3 28.3
Average spend per visit (€) (2) 79 76 35 33
Average sales density growth (%) (3) 4 5 5 10
Like-for-like net rental income growth (%) (4) 4 14 10 5
Occupancy (%) (5) 97 95 92 91
2018 operational update
3 1 With the exception of LfL net rental income growth, figures reflect overall portfolio performance, not Hammerson’s ownership share. 2017 figures have been restated at 31 December 2018 exchange rates 2 Figures include acquired assets from the acquisition date. 2017 VIA Outlets figures have been restated to reflect more accurate footfall data and include Zweibrücken Fashion Outlet from the acquisition date 3 Figures include assets owned for 24 months 4 LfL NRI growth now excludes the impact of extensions and re-modellings. VIA Outlets 2017 LfL NRI has been restated for a foreign exchange correction (-4% impact to 2017 LfL NRI) 5 2017 VIA Outlets figures have been restated to reflect spot occupancy rather than assets owned for 12 months
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2% 3% 4% 5% 6% 7% 8%
€3,000-5,000/m
€5,000-8,000/m
€8,000-39,000/m
Yields on premium outlets
Premium outlet valuations are driven by sales density levels
4 1 ‘Very high’ includes Bicester Village, Fidenza Village, Ingolstadt Village, Kildare Village, La Roca Village, Las Rozas Village, La Vallée Village and Wertheim Village 2 ‘High’ includes Batavia Stad Fashion Outlet, Maasmechelen Village, Mallorca Fashion Outlet, Vila do Conde Porto Fashion Outlet and Zweibrücken Fashion Outlet 3 ‘Medium’ includes Fashion Arena Prague Outlet, Freeport Lisboa Fashion Outlet, Hede Fashion Outlet, Landquart Fashion Outlet, Oslo Fashion Outlet, Sevilla Fashion Outlet and
Wroclaw Fashion Outlet
(1)
2
(3)
Very high (1)
High
Medium
Sales densities illustrate appeal to consumers, brands and investors 2018 weighted average sales density was €10,000/m2, up +5% YoY Weighted average NIY 4.70% Comparable to European prime shopping centres
Sales densities illustrate appeal to consumers, brands and investors 2018 weighted average sales density was €9,800/m2, up +5% YoY Weighted average NIY 4.7% Comparable to European prime shopping centres
High (2)
Medium (3)
2
2
Dec 2018 NIY (%)
Sa
les
densi
ty (€
000/m
2)
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Sales growth attractive for retailers
5
7%
18%
10%
5%
13%
8% 9%
5% 5% 4%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2012 2013 2014 2015 2016 2017 2018
VR Average Sales Densities (LHS) VIA Average Sales Densities (LHS)
VIA Average Sales Density Growth (RHS) VR Averge Sales Density Growth (RHS)
VR and VIA Average Sales Densities (€/m2) and Average sales Density Growth 2012 – 2018(1)
Sales densities growth demonstrates underlying sales performance
1 Figures have been restated at constant FX rates. Sales densities include assets owned for 24 months. Sales density growths have been calculated as the weighted average of entities owned for 12 months.
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Hammerson’s total investment in Value Retail
1 Total Village ownership calculated as economic entitlement of directly held and indirectly held interests
6
Holding companies 25% equity
Bicester Village
37
50
La Roca Village
29
41
Las Rozas Village
25
38
La Vallée Village
14
26
Maasmechelen Village
14
27
Fidenza Village
22
34
Wertheim Village
33
45
Ingolstadt Village
2
15
Kildare Village
29
41
Village ownership via LPs (%)
Total Village ownership (%) (1)
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Diversity of international visitors
7
Tax Free Sales (TFS) are a more meaningful contributor to Value Retail
1 Source: Global Blue, (Value Retail Villages and European Snapshot December 2018) 2 Other includes countries which are not in the top 15.
TFS at Value Retail(1) Largest contributor to individual Village TFS
Largest contributor to total Value Retail TFS
Greater China
South and East Asia
Gulf/Middle East
Russia
India
USA
Other(2)
Tax Free Sales at Value Retail
Largest contribut
or to individual Village
TFS
Largest contributor to
total VR TFS
Greater China Kildare Bicester
South and East Asia La Vallée
Bicester
Gulf/Middle East Ingolstadt
Bicester
Russia Fidenza La Roca
India Bicester Bicester
USA Kildare Bicester
Other (2) Las Rozas
La Vallée
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VIA(3)
Consumers(2)
China 26%, Israel 14%, Egypt 9%
Russia 31%, Israel 21%, China 10%
Brazil 31%, Angola 25%, China 14%
China 51%, Iran 11%, Switzerland 4%
China 24%, Russia 14%, UAE 6%
Russia 29%, Argentina 16%, Switzerland 12%
Ukraine 18%, Belarus 17%, China 16%
Morocco 70%, Russia 3%, Argentina 3%
China 27%, Kuwait 11%, Russia 10%
Brazil 46%, Angola 23%, Mozambique 4%
China 19%, Germany 11%, Lithuania 10%
Diversity of international visitors
8
Value Retail(1) Consumers(2)
China 40%, Hong Kong 6%, India 5%
China 40%, Russia 13%, Korea 9%
China 48%, Columbia 5%, Korea 4%
China 32%, Korea 9%, Taiwan 5%
China 26%, Taiwan 10%, Russia 8%
Russia 35%, China 21%, Ukraine 6%
China 48%, Taiwan 7%, Russia 6%
China 31%, Russia 16%, Taiwan 5%
China 60%, Malaysia 5%, USA 4%
1 In order of opening 2 In order of importance, portion of total TFS as at 31 Dec 2018. Source: Global Blue and Premier Vision 3 In order of acquisition
Value Retail
Bicester
La Roca
Las Rozas
La Vallee
Maasmechelen
Fidenza
Wertheim
Ingolstadt
Kildare
VIA
Batavia
Fashion Arena
Freeport Lisbon
Hede
Landquart
Mallorca
Wroclaw
Sevilla
Zweibrücken
Vila do Conde
Oslo
Top 3 nationalities by contribution to Tax Free Sales as at 31 December 2018
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9