Objectives & Strategy

The management focuses on investments in high-quality shopping centers in inner cities and established locations offering the potential for stable, long-term value growth. A key investment target is the generation of high surplus liquidity from leases in shopping centers, which is paid out to shareholders in the form of an annual dividend. To this end, the Company invests its capital in shopping centers in different European regions in accordance with the principle of risk diversification. Germany is the main focus of investment. Indexed and turnover-linked commercial rents form the basis to achieve the high earnings targets.

New investments must be financed from a balanced mix of sources, and borrowing must not account for more than 55% of financing across the Group over the long term. On the basis of a planned investment grade rating and the development of new financing instruments, the financing structure is to be diversified further in the future. As a general rule, long-term interest rates are fixed when loans are taken out or renewed, with the goal of keeping the term (average fixed interest period) at over five years.

Diversified Shopping Center Portfolio

Deutsche EuroShop AG holds a balanced, diversified portfolio of shopping centers in Germany and other parts of Europe. We focus our investment activities on prime (1a) locations in cities with a catchment area of at least 300,000 residents in order to guarantee a high level of investment security.

Seizing Opportunities and Maximising Values

In line with our fundamental buy and hold strategy, we consistently place greater importance on the quality and yield of our shopping centers than on our portfolio’s rate of growth. We continuously monitor the market and make portfolio adjustments through acquisitions and sales when economically attractive opportunities arise. Rapid decision-making chains as well as considerable flexibility regarding potential investments and financing structures allow Deutsche EuroShop to react to very wide-ranging competitive situations. At the same time, the Group’s management focuses on optimising the value of the existing portfolio of properties.

Tailored Structure

One key component of the rental model is a tailored rent structure. While individual owners in inner cities are often concerned with achieving the highest possible rents for their property (which results in a monostructured retail offering), we ensure an attractive sector mix and long-term optimisation of our rental income through combined costing. Rental partners pay sector-specific and turnover-linked rent that is regularly hedged through indexed minimum rents during the rental period.

The Shopping Experience Concept

We have outsourced center management to an experienced external partner, Hamburg-based ECE Marketplaces GmbH & Co. KG (ECE; formerly ECE Projektmanagement GmbH & Co. KG). ECE has been designing, planning, building, letting and managing shopping centers since 1965. The Company is currently the European market leader, with around 200 shopping centers under management. We consider professional center management to be the key to the success of a shopping center. In addition to guaranteeing standard opening hours and a consistently friendly, bright, safe and clean shopping environment, the center management can make use of unusual displays, promotions and exhibitions to turn shopping into an experience. As a longterm average, between 400,000 and 500,000 people visit our 21 centers every day and are captivated by not only the variety of sectors represented but also our wide range of thematic exhibitions, casting shows, fashion shows and attractions for children. As a result, the shopping centers become lively marketplaces where there is always something new and spectacular on offer. In addition, new offers and se vices are constantly being created as part of the ongoing integration of bricks-and-mortar and online retailing.