Arnaud Legros

Arnaud Legros, The social landlord of Les Résidences Yvelines Essonne

Taking charge of our retail premises

The social landlord of Les Résidences Yvelines Essonne owns nearly 300 retail premises attached to its residential buildings. Arnaud Legros, Chairman of the Management Board, explained to Parlons Commerce the challenges of taking charge of managing these assets.

What do retail premises represent in the asset portfolio and business of Les Résidences Yvelines Essonne?

We have 287 retail locations in 27 different neighbourhoods, mostly in low-income areas targeted for government support. The retail business has, like the neighbourhoods, fallen into decline. Many premises are empty – we have a vacancy rate of 30% – and those still occupied generate very little rental income. Our rents are generally 50% lower than those of other social landlords. In fact, it’s not very surprising: until now, we didn’t genuinely manage our retail premises. Or, rather, we managed them like our housing units, which obviously makes no sense.

How do you intend to take charge of managing your retail assets?

It’s quite simple: we want to do the opposite of what’s been done until now! Retail activities were marginal; they need to become a priority. Our first goal is to lease the premises under better terms and increase our income. This will have a follow-on effect in the neighbourhoods, making our housing more attractive. The only concern is that we are not experts at managing retail properties. It takes true professionals who know exactly how retailing works. That is why we decided to call on Convergences-CVL, who have just begun working on the project. We must go back to the drawing board: should we set up an in-house management team or outsource it? I have no set views on the subject; we’ll make a decision based on the proposals by Convergences-CVL.

It seems that retail activities hold strategic importance for Les Résidences.

Absolutely. Even though they account for only a small share of our income, having good-quality retailers is crucial for our tenants and for the life of the neighbourhood, in the same way that transport and public services are crucial. This is why the cities where we work are present pay special attention to such matters. We therefore need to bring in the right skills, not only in terms of management, but also for the design of the sites. There are a range of configurations, from our new developments with 30 housing units, to major urban renewal projects. But in each case, we have to get things right: though we might be tempted to systematically create retail spaces on the ground floor of our buildings, where tenants don’t wish to live, we can’t have random types of retailers in random places. That’s another reason why we felt the need to call on specialists.