Although they belong to a small market, French outlet centres are highly resilient in the face of crises, as demonstrated by the upturn in both footfall and performance, which has been rising since the beginning of 2022.
What is the current state of the French outlet centre market?
The French market benefits from a favorable European positioning thanks to a wellstructured portfolio (13% of European sites and 11% of the total surface area in Europe), consolidated by the presence of national and international operators. However, development in France is likely to slow down as a result of restrictions on commercial authorizations, leading to delayed, suspended or cancelled projects. As a result, growth in the portfolio is tending to be more endogenous, via restructuring or extensions to existing sites.
Operators are now focusing on developing their existing locations, with the arrival of new activities to add value to the outlet assets in their portfolios. The areas released by certain ready-to-wear chains are opportunities for the development of relay activities such as restaurants and leisure, which have been very popular recently.
What are the latest trends in outlet retail?
Considering their wide appeal (an average car journey time of between 1 hour and 2.5 hours), outlets are very popular at weekends and during school holidays, and often last longer than a traditional shopping centre.
In a market where the fashion sector is losing ground, operators are gradually reducing the share of this major traditional component (which initially accounted for almost ¾ of centre floor space in France and 55% in European centres). This diversification is mainly in favour of new brands in the sports, homeware and food sectors.
More broadly speaking, outlet centres are moving towards a new merchandising mix with a greater emphasis on food and beverage; centres that juggle proximity and tourist attraction.
The outlet model is based on second-hand goods, digitalisation at the service of retailers and concrete commitments to ESG criteria.
How is the outlet centre investment market performing?
Despite the slowdown observed during the pandemic crisis (2020 and 2021), the outlet centre investment market remains active on a European scale, even if it is confined to a "niche" volume (annual average of almost 500 million euros over the last 5 years) related to the small size of the market and the lack of opportunities.
Estimated at around €80m, the average annual volume invested in outlet centres in France over the last decade represents a relatively small proportion of the volume committed to retail real estate. Nevertheless, this type of asset is mainly traded in the form of portfolios, and in active years, the share of outlets can reach up to 6% of volumes.
