We focus on investments in top-quality shopping centers in city centers and established locations that have the potential for stable, lasting value growth and generate substantial distributable free cash flows on an ongoing basis. We have consistently followed this long-term strategy since our IPO in 2001. Our success to date underscores the correctness of this approach.
|Clear goals and principles
Deutsche EuroShop’s two primary investment objectives are to generate high surplus liquidity from long-term leases that is distributed to shareholders in the form of annual dividends, and to achieve sustained growth in the value of its portfolio. The Company diversifies risk by investing in retail properties – specifically shopping centers – in a number of European regions, with the focus on Germany. The desired high return is achieved through index- and turnover-linked commercial rents coupled with a center management strategy that focuses on long-term success – an approach confirmed by our business development to date.
|High-yield portfolio with stable value
Deutsche EuroShop has a well-balanced, diversified portfolio of German and European shopping centers. We will continue to concentrate future investments on properties in premier locations that are expected to generate a high yield and maintain their value in the long term, so as to guarantee a high level of investment security.
|Making the most of opportunities, maximising value
In line with our “buy & hold” strategy, we consistently rate the quality of our shopping centers higher than the rate of growth of our portfolio. We monitor the market all the time and are able to act as buyers when an opportunity arises. Short decision-making channels and our considerable flexibility in terms of potential investment and financing structures enable us to adapt to any competitive situation. At the same time, we are committed to optimising the value of the existing properties in our portfolio.
|“Stability pact” for returns
We intend to distribute a total dividend of at least € 30 million every year. The consequence: Deutsche EuroShop can only grow organically in small steps. We are therefore aiming for a capital increase in the medium term. Investments in this context must generate a return that is at least on the same level as the existing shopping center portfolio. Thus we want to avoid any dilution of the shares and/or the dividend payment, which would adversely affect our shareholders. Investment funds required before the implementation of the capital increase will be financed through short-term loans.
|Decisions based on in-depth analyses
Before we decide to invest in a shopping center, we evaluate a variety of studies on the development and market cycles of the European property markets, as well as specific location analyses. Factors influencing our decisions on whether to buy or sell properties include country- and region-specific aspects and the general tax situation. To ensure the long-term success of an investment, the price discovery process involves not only an assessment of the property’s quality but also a calculation of its capitalised earnings value.
|Differentiated rental system
An important component of our leasing concept is a differentiated rental system. While individual owners in city centers are often concerned with achieving the highest possible rents for their property (thus resulting in a monostructured retail offering), we ensure an attractive sector mix and long-term optimisation of our rental income through combined costing. Our lessees pay rent dependent on sector and turnover. Indexed minimum rents (based on the consumer price index) provides a guaranteed minimum level of income for Deutsche EuroShop during economic slowdowns.
|The concept of shopping as an experience
We have outsourced center management to experienced external partners. These are currently ECE, Espansione Commerciale and Unibail, who have a proven track record stretching back decades. Professional center management is the key to the success of a shopping center. It not only ensures uniform opening hours and a consistently friendly, bright, safe and clean shopping atmosphere, it makes shopping an experience with in some cases striking presentations of merchandise, promotions and exhibitions. The 250,000 to 350,000 people who visit our operational shopping centers on average every day are fascinated by the variety of sectors represented, but also by our unusual, unconventional promotions such as “The World of Perfume” or “Space Adventure”. These turn shopping centers into marketplaces where something new and spectacular is constantly on offer.