“Retail is a niche market worthy of optimism”

The funds we manage are mainly placed in office buildings and health facilities, but retail remains a niche market in which we are confident. We are clearly entering a new era in which having a retailer for tenant does not guarantee a steady, easy-to-come-by rent. Today, we must approach this market in a much more segmented manner and get hold of tools to understand what's happening, because some models, such as the hypermarket, are outdated for sociological reasons and there's no turning back. Nonetheless, if we have the right yardstick and identify sound locations and reliable and innovative retailers, we can be optimistic, and we are.

We now have 550,000 sq. m of managed retail assets, distributed between retail parks (37%), shopping centres (31%), High Street retail (21%) and outlets (6%). We also manage mixed portfolios that include retail (5%). We give priority to High Street retail and, selectively, retail parks when allocating funds.
For retail parks, we target sites that are true destination points. We share with other stakeholders like Frey and Compagnie de Phalsbourg the fundamentals of successful retail in the 21st century, which must combine architecture, respect for the environment, consumer welfare and the digital experience.    

For High Street retail, we invest in Paris and major regional cities, in first-rate segments on first-rate streets, meaning locations where there are flows and that will always find tenants thanks to their unquestionable quality. We are very proud to have recently acquired premises in Paris on Rue du Bac and in the open-air gallery in the new Batignolles district. We also invest in mixed portfolios, including residential, office and High Street retail spaces, as in Marseilles and most recently Lyon, coincidentally on Rue de la République in both cities.

It's a model that we strongly believe in, linked to the dynamics of metropolitanisation driven by favourable demographic and sociological changes in some cities.

Our strategy for shopping centres is defensive because they have been weakened by the ailing hypermarket model. We are however confident that these assets can be reworked in a way that aligns their interests with those of their anchor, hence our stake in the capital of real estate companies Carmila for Carrefour shopping centres and Galimmo for Cora.

How does Primonial REIM manage its real estate assets?