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23 March 2015

Resolution Property instructed retail business consultants FSP to provide a pre-acquisition study of DOS, prior to purchasing the site for its European outlet fund. 

Michel Nangia, from Resolution Property explains, “We wanted to confirm the growth opportunity that we believed to exist at DOS. FSP is highly regarded in the sector and understands outlet centres from the ground up – just the independent view we needed.”

Background

Designer Outlet Soltau (DOS) is located in Lower Saxony’s Heidekreis district. Opened in 2012, DOS serves a 90 minute catchment of 9.3 million residents, while Heidekreis attracts nearly 2.5 million annual overnight visits. DOS has more than 80 designer brands including global retailers such as Nike, Esprit, Gant and Lacoste.

Resolution Property instructed retail business consultants FSP to provide a pre-acquisition study of DOS, prior to purchasing the site for its European outlet fund.

 Resolution Property

Michel Nangia, from Resolution Property explains, “We wanted to confirm the growth opportunity that we believed to exist at DOS. FSP is highly regarded in the sector and understands outlet centres from the ground up – just the independent view we needed.”

The Customer Challenge

Germany has been traditionally undersupplied in outlet terms, primarily due to the tough planning regulations originally developed to protect local town centres from out of town shopping. Currently however, there are a number of new outlet centres plus extensions at established competing sites under construction. For Resolution Property, the challenge was understanding if these developments will potentially affect sales growth at DOS or the future opportunity to increase provision, ahead of acquiring the site.

The Solution

FSP undertook a detailed site and desk review of the catchment and customer potential, prioritising growth opportunities through a Trading Gap assessment. Benchmark analysis identified target occupiers for enhancing the retail mix with more globally recognised, Assured fashion brands. A combination of capacity and impact analysis quantified the effect of additional space at competing outlet schemes and the opportunity for further provision at DOS.

DOS

The Results

FSP’s findings showed that the trading opportunity at DOS is robust, with substantial opportunities to grow turnover at DOS by enhancing the retail offer and ensuring significant differentiation from competing sites. The strong local tourist market presents a genuinely unique asset and FSP recommended a series of actions to tune the offer to take advantage of the picturesque surroundings.

Ken Gunn, Director at FSP comments, “Soltau is one of those rare locations which combines a top quartile catchment population with a thriving tourism market. Asset management initiatives which exploit these opportunities will bring substantial sales and income rewards for the investor.

With the acquisition of DOS completed, Resolution Property is now working with the operator to develop and implement new asset management initiatives. 

Michel Nangia of Resolution Property concludes, “FSP’s research confirmed the scale of untapped potential at DOS and gave us confidence in completing the acquisition. Having purchased DOS, we are now actively engaged in delivering the full potential of this exciting investment.”