Christmas under the lens

Real estate investors across Europe have one thing on their Christmas lists – they would love to know if property prices are set to fall still further, or if they have already reached the bottom.

But with their crystal balls murkier than a shaken snow globe, the jury is still out on the uneven European landscape. Conversations at Expo Real demonstrated that the financing environment remains a major hurdle with banks ‘making things worse’, according to one frustrated investment manager.

For those that have equity, the focus remains on potential distress, although that particular pantomime still seems remote. All in all, dealmaking in the fourth quarter seems likely to remain something of a damp squib.

While investors give Scrooge a run for his money, retail landlords, however, will be hoping that consumer purses stay open. The final three months of the year, somewhat optimistically known as the Golden Quarter to those in the retail business, are the most important marker of the health of a brand, shop space, or mall.

While the significance of the end of year retail bump has waned a little in recent times, with pandemic-era ecommerce trends offering a more even year-round spend, this year it has a particular, nervy relevance.

A slate of landlords are looking to reduce their exposure to the sector right now, without even waiting for Christmas revenues, as Jane Roberts explores in her feature. However, their rationale isn’t entirely negative. With the best retail assets performing more robustly than in 2019, and with much price correction having already taken place, the sector has an enviable clarity to it.

Meanwhile, even if Eurozone retail sales continued to trend down in September, certain markets, like Spain, are displaying a more-than-seasonal-sparkle. According to Alfonso Brunet, CEO of Castellana Properties and the subject of this month’s Big Interview, retail is best managed by sector specialists who have the knowhow to really exploit an asset. Brunet also points out that Spanish consumers are special in the retail panorama. ‘We are outdoorsy people, gregarious people,’ he says. ‘We like to meet, we like to eat, we want to be out.’

Experience-led segments such as food & beverage are a big part of this success story, while robust grocery turnovers from key anchors offer another glimmer of hope for the darkest quarter of the year. Here’s hoping for a not-so-cold Christmas, and a prosperous New Year.


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