Ken Gunn, President of FSP retail, a well-known European commercial real estate consulting company, has more than 30 years of experience in retail real estate. In the past decade, I have participated in more than 100 outlets projects in more than 30 countries.

In October 2017, FSP released an exclusive European outlets Industry Report 2017 and hosted a breakfast meeting of outlets industry accordingly. This report discloses important data and analysis of European outlets industry, which enables us to explore this fast-growing industry and help our customers better understand the opportunities for future performance growth.

1. Europe: a booming market

Europe's outlets industry is still growing at a high speed, with a more mature market and younger consumer groups. The opening of several benchmark projects has become industry headlines, such as fashion outlet Leipzig, McArthur Glen Provence, and Torino outlet village. At the same time, the sales performance of many outlets has maintained a high growth rate. For example, the sales of Rosada fashion outlet increased by 54% after the completion of phase II construction, while the sales of Roppenheim the style outlets also increased by 18% in 2016

Forty years ago, the outlets industry started to develop into an independent business form in 2000, expanding from eight countries covered in the 1990s to 20 countries today, including Poland, Bulgaria, Germany, Sweden, etc. Since 2010, outlets in Europe has not only been growing in the number of projects, but also in the business area.

Today, 27 countries in Europe have 3.7 million square meters of rental area in outlets. The most mature markets are Italy, Spain and the UK, which have the largest operating areas. The ratio of business area to total population in Germany and Russia is quite low, which shows that these two countries will have great growth potential in the future. At the same time, we believe that the number of outlet in France and the Netherlands will have the potential to grow slowly in the future.

2. Performance of the outlet industry in Europe

Back in 2008, according to FSP statistics, 171 outlets generated a total of 6.7 billion euros in sales. In spite of the sub-prime crisis and the rapid development of e-commerce in that year, the outlets business in Europe is becoming stronger and stronger under these adverse conditions. According to statistics, compared with 2013 and 2017, the sales of outlets in Europe increased by 51%, from 11.5 billion euros in 2013 to 17.3 billion euros in 2017, which is 10 times the average growth rate of European retail industry.

According to the 2017 European outlets industry report released by FSP recently, the UK ranks first among European countries in terms of sales volume, followed by Italy, which leads the way in terms of the quality of orlay products and the choice of famous products provided to consumers. The Netherlands, Austria and Germany have the highest average floor efficiency, but France has largely underperformed (examination) Considering the country's strong purchasing power and fashion sensitive national group), the reason is that the country has been under invested in the field of outlets, as well as the strict planning system of the government.

Statistical table / map of outlet plate in major European countries: outlet leading magazine)

Luxury products are increasingly becoming the main driving force for the growth of outlets' performance. Of the top 20 outlets in Europe, 15 projects have luxury brands.

3. Major ole players in Europe

The industry report issued by FSP has studied the leading impact on major players in the European market. McArthur Glen is a well deserved leader in the European market. In recent years, the company has continued to expand its projects, increasing its market share in Europe from 22% in 2013 to 27% in 2017.

Further inspection shows that the company's five orlay projects account for 45% of the total sales of Italy's orlay industry, but so far it has not been involved in the French and Spanish markets. Value retail is the second largest player in the European market, and via outlets has replaced never as the third largest player in the European market. Since 2014, it has acquired 10 outlet projects.

The market share of 10 major ole traders in Europe increased from 59% in 2013 to 68% in 2017. Meanwhile, the market share of small and medium-sized developers decreased from 41% to 32%, but this situation is also in contrast to the background of their actual performance growth. In fact, the sales of small and medium-sized orlay developers increased by 17%, from 4.7 billion euros to 5.5 billion euros, which is more than four times the average growth rate of European retail performance, including many fast-growing "emerging" developers, such as advantail, arcus real estate, Lifestyle outlets, as well as retail outlet shopping, which has created important new ideas in the ole industry.

When these ten major orlay developers account for 66% of the market share and 48% of the retail area of the whole market, the investment situation of Europe's outlets market will be the top priority. Here, M & A becomes a core strategy: Deutsche asset management company ranks among the top ten European companies after acquiring the project portfolio of peakside company in Poland; via outlet has doubled its market share (from the previous 3.6% to the current 6%) after acquiring four orlay projects in early 2017; land has acquired three Hermes projects SEC's market share has also doubled.

4. Innovation and change of outlet industry in Europe

With the continuous growth of the business area of OLE industry, new phenomena begin to appear. According to the analysis of our report, up to now, there are five newly developed outlets projects in 2017, with a new business area of 83340 square meters: Torino outlet village in Italy, McArthur Glen Provence in France, Sambil outlet in Spain, Deltapo outlet and Princes quay in the UK.

At the same time, the three new projects of OLE will also open around the end of this year, bringing the new business area in 2017 to 133350 square meters: respectively, the Hongfour Normandy village in France, the style outlets Prague in Czech Republic, and the designer outlet Algarve in Portugal. Many outlets projects are located after the renovation of old houses, which is different from the traditional development methods of McArthur Glen or value retail. For example, the three projects of City outlet Wuppertal, the O2, and City outlets Paris are located in the inner city area, no longer in the outer suburbs, which can make the brands focus on attracting young consumers after the millennium, make them understand the added value brought by outlets, and reduce the concerns of the brands about the fight between the positive price stores.

O2 will add 20000 square meters of famous shopping area in one of Europe's leading entertainment venues; in addition, it will take only 20 minutes from Paris Opera House to City outlet Paris by subway. This project has become a new shopping landmark in eastern Paris.

Some projects represent the new trend of OLE's increasing focus on Tourism Destinations: zsar outlet village will provide duty-free advantages to Russian consumers who are eager for famous brands coming from Finland on the basis of discounts. Designer outlet Algarve will attract 3.7 million tourists who come to Algarve every year for shopping.

Not to mention the weak economic trend and the negative impact of the rapid development of e-commerce, outlets shopping center is still in full swing in Europe, and these characteristics have been deeply rooted in the soil of the European ole format - top brand, comfortable shopping environment, affordable price, excellent management level. All of these make outlets show great advantages in the face of the competition of traditional positive price stores.

Our point of view is that the future development of outlets will remain very strong, and more innovation will appear in the future, providing more new opportunities for brand makers, and promoting the sustainable development of the overall European economy.