The management focuses on investments in high-quality shopping centers in city centers and established locations offering stable long-term value growth. Another key investment target is the generation of high surplus liquidity from long-term leases in shopping centers, which is paid out to shareholders in the form of an annual dividend. In order to achieve these targets, the Company invests its capital in shopping centers in different European regions in accordance with the principle of risk diversification. Germany is the main focus for investment. Indexed and turnover-linked commercial rent ensure that we achieve our high earnings targets.
The Company may invest up to 10% of equity in joint ventures in shopping center projects in the early stages of development.
New investments should be financed from a balanced range of sources, and external financing may not exceed 55% of long-term Group liabilities. As a general rule, long-term interest rates are fixed when loans are taken out or renewed. The aim is to keep duration (i.e. average fixed interest rate period) at over five years.
High-yield, stable portfolio
Deutsche EuroShop has a balanced and diversified portfolio of German and European shopping centers. The management focuses on investments in prime locations in cities with a catchment of at least 300,000 in order to maintain a high level of investment security.
Seizing opportunities and maximising value
In line with our buy & hold strategy, the management is increasingly concentrating on shopping center quality and returns rather than rapid portfolio growth. The management constantly monitors the market and takes opportunities to buy when they arise. Rapid decision-making processes and considerable flexibility regarding potential investments and financing structures allows Deutsche EuroShop to react to all competitive situations. At the same time, the Group's management is committed to optimising the value of the existing portfolio of properties.
Tailored rent structure
One key component of the rental model is a tailored
rent structure. While city center property owners often focus on obtaining the
highest possible rental rates for their properties – creating a monolithic
retail offering – Deutsche EuroShop's management uses a calculation combining a
range of factors to create an attractive sector mix and optimise long-term
rental income. Rental partners pay sector-specific and turnover-linked rent.
When the economy is weak, Deutsche EuroShop's revenue is protected from falling
below a lower threshold (based on the consumer price index).
Shopping experience concept
Deutsche EuroShop has outsourced center management to an experienced external partner: ECE Projektmanagement GmbH & Co. KG (ECE), based in Hamburg. ECE has been designing, planning, building, renting and managing shopping centers since 1965. The company is currently the European market leader, with 196 shopping centers under management. Deutsche EuroShop views professional center management as the key to successful shopping centers. In addition to guaranteeing standard opening hours and a friendly, bright, safe and clean environment, the center management can employ unusual displays, promotions and exhibitions to make shopping an experience. Between 500,000 and 600,000 shoppers come to the 19 DES centers every day, where they are impressed not only by the range of sectors represented, but also by promotional activities including car, talent and fashion shows and a wide range of activities for children. As a result, the shopping centers become market places where there is always something new on offer.