Otto Ambagtsheer, on expansion strategy, green bonds and the future of premium outlets
The Vila do Conde expansion has just opened. Can you walk us through the journey from concept to completion?
We started thinking about the expansion back in 2021 when we did the remodelling project. We redeveloped the existing centre to make the whole look and feel a bit more premium and create a better guest experience. These projects take time, about four or five years from concept to opening. I'm very proud that this project was delivered on time and on budget. The execution has been really, really good.
How was the permitting process in Portugal compared to other European markets?
The support we received from the mayor and the local authorities was really fantastic. They appreciated that we believed in the centre and in the region and that we wanted to invest. The expansion alone created over 300 extra jobs. That helped speed up the process significantly. You still need to go through the design and permitting process, but with local authority support, it makes a real difference.
You've mentioned plans for further expansion at Vila do Conde. What's driving this confidence?
The catchment area is strong, and we already have over 5 million visitors to the centre each year. We're also seeing constant growth in tourism, so there are multiple drivers of business growth. We have plans potentially to develop another retail park and could do another phase three extension here. We're not actively working on it yet because we just opened phase two today, but it proves we have a long-term vision for the centre and believe in the destination.
VIA Outlets recently returned to the green bond market. Can you explain the significance of this financing?
At VIA Outlets, our business is centred around a two-pronged growth strategy being organic and inorganic growth."In order to give more support to this growth, we went back to the green bond market at the end of October for unsecured loans and raised another €500m. It was 3.6 times oversubscribed, which shows real confidence in our portfolio and business model. Around €150m will be used to refinance our first green bonds we issued in 2021, so we have about €350m cash on hand. Green bonds are an unsecured way to finance your company at the corporate level, rather than secured loans against individual assets. It's a very attractive way to finance and refinance the business.
With €350m available, what's your acquisition strategy?
We're keen to do a few acquisitions if possible, also with the support of our shareholder APG. That's been on our agenda for a while, and I have good hope that we might have some good news in the near future. We're always focusing on the nine countries where we already operate because it makes sense, we have the teams there, and we know the markets. But we're also looking at countries where we're not yet operating, which could mean entering a new region. I can't disclose where we're looking, but it's great to see that we hopefully can welcome at least one centre to our portfolio in the near future.
What advantages does VIA Outlets' ownership structure provide in this competitive market?
One of our strengths is that we own 100% of our centres, all 11 of them across nine countries. And we are 100% owned by APG. It's a very straightforward structure, and I believe that's a competitive advantage. Many of our competitors have more shared ownership or joint ventures. We can adjust to market developments faster than our competitors. APG strongly believes in the outlet channel, and they're a fantastic partner for us.
Your organic growth strategy centres on what you call the "3R" approach. How does this work in practice?
The 3R strategy is Remodelling, Remarketing and Remerchandising.
It is our continuous business model, through which we transform and elevate our centres in terms of look and feel, premiumnise the brand mix and adapt the communication strategy to attract the right domestic and international guests. We focus on our 11 centres in our portfolio and have a very strong track record of delivering growth year after year, both top line and bottom line. These expansion projects are a very important part of our growth strategy. They are growth enablers; they are value accretive. In April next year, we're opening another extension in Landquart in Switzerland, which demonstrates our continued commitment to this approach.
How do your lease terms support the outlet model across different European markets?
We use standard terms normally, across borders. It's typically a five-year lease, and in the outlet channel, turnover rent is an important part of the lease structure. That's what we execute in all our centres. It aligns our interests with the brands; we succeed together.
Looking ahead, where would you like to see VIA Outlets in the next two to three years?
We'll continue with our organic growth strategy focused on the existing portfolio, but we're also looking seriously at inorganic growth through acquisitions. With the support of our shareholder and the capital we now have available, we're well-positioned to add quality assets to our portfolio. The outlet sector continues to show resilience, and we're confident about the future.
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