In a rapidly evolving retail climate, Multi Corporation’s Hubert Stech has suggested that the challenges facing shopping centre owners can be overcome with a ‘hugely flexible’ approach which embraces the alternatives sector.

Stech, who has been managing director of Multi Germany since 2017, and became head of Belgium and the Netherlands as of March 1, thinks that the ‘size of shopping centres today’ won’t reflect ‘the size of shopping centres tomorrow’. Accordingly, asset management strategies require a creative approach to existing spaces, as well as a close and responsive dialogue with the rapidly evolving retailer landscape.

Before taking the helm of Multi’s German business, Stech was director of project development and sales at Siemens Real Estate. His previous positions include head of corporate international coordination at Metro Group Asset Management and managing director at Douglas Real Estate.

Blackstone's European retail property platform currently operates in the Netherlands, Belgium, Germany, Hungary, Ireland, Italy, Latvia, Poland, Portugal, Slovakia, Spain, Ukraine, the UK and Turkey.

New job, bigger plan
According to Stech, his new, broader role at Multi – simultaneously leading operations in Germany, Belgium and the Netherlands – has a certain geographical sense. ‘I will have two offices in Düsseldorf and Amsterdam, and continue with my remit in Germany to find new third-party mandates, and to be active in the market. I’ll be taking a similar approach in Belgium and the Netherlands. The offices are a two-hour drive apart, so logistically, it’s very manageable,’ he told PropertyEU.

While the Netherlands and Belgium are considered to be amongst Europe’s most under-pressure markets in terms of the e-commerce threat and downward pressure on asset values, Stech said his strategy there would be similar to his German approach.

‘There is certainly work to do to make retail spaces attractive in Belgium and the Netherlands,’ he confirmed. ‘Segments like fashion are surely under pressure, but we see the same in Germany. You have to create opportunities for the different retailer types.’ He added: ‘Electronics and white goods are also feeling the impact from e-commerce and have been rapidly reducing space and remodifying; we are working to find the right concept and kind of space for every occupier. That includes giving retailers the opportunity to create omni-channel resources in physical stores.’

Stech said that across all three markets, retailers are likely to reduce their space requirements accordingly. But some occupiers are bucking the trend. ‘For example, food and beverage operators are now taking more space than ever before.’

New tenant mixes
While some shopping centre operators are betting on leisure, Stech suggests this is just one tool at landlords’ disposal. ‘Finding tenancy solutions for each and every location may include leisure, but we need to be even more flexible,’ he said. ‘In shopping centres today, basement levels and third floors are often the biggest challenge in terms of leasing. So, what we’ve been doing in Germany – and will also do in Belgium and the Netherlands – is consider alternative tenants to retailers. That might include kindergartens and medical centres, for example.’

He stressed: ‘I don’t think that the size of shopping centres today will be the same as the size of shopping centres tomorrow. We will have more mixed centres, which combine living, kindergarten, medical premises et cetera, to meet the needs of workers in city centres. This obviously applies for medium sized, downtown centres – not for out-of-town big boxes.’
Changing demographics have a role to play in this, he added. ‘I would also consider more residential in shopping centres,’ he said. ‘The world has changed, and it’s possible that aging populations will need these kinds of living options.’

Buying and selling
Stech said that while a few properties in Germany were currently being sold, potential acquisitions could not be ruled out – and implied that might even include second tier shopping centres. ‘Secondary centres are often in residential areas, where you may be able to create a new and relevant tenant mix for those communities,’ he noted. ‘It’s a challenge but there are opportunities to use our experience to improve properties and raise them to a value they didn’t have before.’

He added: ‘Our business model is a balance between attracting mandates for and executing third party services, and also providing our shareholder with the best possible services.
‘If we can bring the best services to the table, clients will come to us.’