Ascencio was launched in Belgium, and ten years later you closed your first acquisition in Spain. How would you describe your overall growth since your inception, and do you have a different strategy across different geographies?
Ascencio was created in 2006 and listed on the stock exchange the following year, originally as a family company. Over time, we have grown into a specialist in out-of-town retail. Our portfolio today is composed of retail properties on the outskirts of urban areas in Belgium, France and Spain, with a clear predominance of supermarkets and retail parks. The company holds REIT-equivalent statuses in all three countries: SIR in Belgium, SIIC in France, and SOCIMI in Spain.
In 2018, we set a disciplined strategy: focus on out-of-town supermarkets and retail parks. We do not chase growth at any cost but instead prefer to strengthen our position in this niche. Geographically, Spain now represents our strongest opportunity. Indeed, Spain is competitive and the scarcity of new supply creates potential for disciplined investors like us.
What is your current portfolio composition, and what are the main drivers to select investment opportunities?
The simplest way I can describe what Ascencio does is the following: we swap equity and debt for rents. And to do that our portfolio basically consists of two types of assets: retail parks, and supermarkets.
The retail parks are structured open-air shopping complexes, generally on the outskirts of cities, easily accessible by car and designed as a single whole. They tend to comprise at least five rental units with more than 3,000 sqm of constructed area.
We aim to control the retail areas in which we invest as much as possible. This allows us to optimise the tenant mix according to the catchment area and market trends. For us, the fundamentals remain simple: location, market and tenant (including the lease conditions you establish with them). If those three align, the investment works for us.
Our portfolio includes around 100 buildings with a retail area of 440,000 sqm, generating €54 million in annual rental revenues and a fair value of around €750 million, with an EPRA occupancy rate of more than 96%. These figures reflect both our disciplined selection and our hands-on management style.
Regarding your ambition to further expand in the Spanish market, are you keen to materialise investments through co-investment vehicles?
We value independence. Joint ventures may look attractive on paper, but in practice they are complicated to manage over the long term. Our preference is to invest alone, maintaining consistency with our shareholders and freedom to act quickly. We run a small, highly connected team that manages assets hands-on, from negotiations with banks to tenant relations.
This approach has delivered steady dividend growth for more than a decade. We are not in a rush to sell, nor under pressure to buy. Of course, one day we may become part of a larger group at the right valuation, but for now we are focused on building a strong, long-term portfolio. Financial discipline underpins everything: our target loan-to-value ratio is around 50% (currently 42.1%) and could stretch it to 55% if we are crossing good opportunities, but we avoid approaching the 65% ceiling that the REIT structure defines.
When selecting assets, our priority is always the tenants. We ask: is this the best location for them, will it support their business, and will it generate stable rental income over the long term? We really consider how their turnover should be. We buy for the long haul, not for short-term trading.
You only have 3 assets in Spain despite your confidence in the local fundamentals. What has been missing to grow your footprint there?
Spain is a fascinating but challenging market. On the one hand, opportunities exist, especially in retail parks and supermarkets. On the other hand, the opportunities we look for are not on the radar of large international brokers, they tend to be controlled by entrenched local players, and many times are transacted in off-market scenarios. This makes it hard for a new entrant such us to secure deals.
For us, trust is essential. We don’t buy every few months, so developers need to know we are selective, but also consistent. When we say we want to buy, what we really mean is that we are ready to move on the spot. Our small company size makes us agile: we can call a board meeting in two days and decide quickly.
Financially, we are sound — today we have around €90 million available, ready to deploy…we don’t need to make any calls to the bank. This financial position is justified by the three ticket ranges we typically work with: €3–5 million for supermarkets, €30–50 million for retail parks, and up to €300 million for large portfolios. Of course, for this last opportunity that crosses our table every year, then we need to raise equity, but there are plenty of external partners available to help us close those deals.
Above all, we want local developers to see us as reliable, long-term partners. We are not the buyer that chases headlines, but one that delivers on commitments and manages assets with care.
Is there any broader trend such as the “winning cities” theory conditioning your investment reasoning?
There is no denial that the “winning cities” concept has value: demographics, consumption, catchment area and location are key ingredients. But the product must fit the city. And we’ve studied operations closely where our product matches the local environment such as Vigo, nevertheless ultimately we decided against investing due to price levels. In Spain, the retail market is often split between institutional investors and family offices, the latter sometimes able to pay more thanks to easier bank financing – for a wealthy family LTV is not something that cross their minds, or at least that weights the same as in our commitments.
But we are excited because we know what we are chasing, and we remain disciplined, even if it means stepping aside from deals.