This was one of the subjects addressed by the guest professionals at the latest Breakfast Conference organized by VI and C&W in Lisbon and which focused on the retail segment.
«The future can be anything, it will depend on the consumer’s knowledge and the experiences which are offered», commented Ricardo Pires, from Caixa Crédito Agrícola. Carla André, from Rivercrown, believes that «shopping centres will survive thanks to the customer’s deep knowledge ».
Fernando Oliveira, from Mundicenter, believes that the key is in «working close to retailers, it is not enough to have the managers/owners on one side and the shopkeepers on the other side in order to offer the experience we want».
Demographics is one of the segment’s main challenges according to those present. Fernando Oliveira recalled that «within the same shopping centre we have different types of people and different types of retailers, and we will become the oldest country in Europe. We will have people with time and money».
The same was pointed out by João Cristina, from Merlin Properties, who also remarked the vibrant street commerce and the online commerce, which still only represents 3.5% of sales in Portugal. In joining these two types of commerce, logistics will play a fundamental role, and shops will be increasingly used as the «last mile».
The gap between financing and operation
With the entry of new financing players, in particular concerning shopping centres, the challenges between those who finance the operations and the operators increase.
Carla André explained that «there is a big gap between those who are involved in the business, such as the shopkeepers and managers; and the investors. This is the reason why it is now harder to finance shopping centres. The investors worry about their exits and are too sceptical». But she alerts that «each property is a property». And the fact is that there are increasingly more investors, as attested by Eric van Leuven, from Cushman & Wakefield: «there is investment in the shopping centres in Portugal, thanks to financial investment».
«It is not easy for us to establish real partnerships with new shopping centre owners, such as some funds, who do not have the same long-term vision», alerted Renato Arie, from Perfumes & Companhia. «We have to build partnerships in order to face the challenges».
Banks are available to finance, within their own limits. «Capital is much needed and we have to buy projects. Banks have liquidity and need income, we have to allocate some capital to real estate as well», said Pedro Pires, from Montepio.
Ricardo Pires highlighted that «most banks begin by trying to understand what retailers are thinking» before financing retail projects. But he recalled that «all banks in Portugal are exposed to this sector and that they have limitations imposed by the Bank of Portugal».
Repositioning and renewal will boost the mature market
Right now, there are no new shopping centres expected to open in Portugal, stated Pedro Teixeira, from the Associação Portuguesa de Centros Comerciais (Portuguese Association of Shopping Centres).
According to him, there are, nevertheless, «opportunities for renewal within the existing shopping centres, including small-scale projects. And investors can look towards those projects». Fernando Oliveira agrees, in particular when taken into account the maturity of the Portuguese market. He considered that «we must look at the assets we have and increase their valuation potential. We have a small market, and even the shopping habits vary from city to city».