MAPIC 2011 PREVIEW SPECIAL ITALY

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O C T O B E R

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Speciale ITALIA Milan tops the deal charts as investment flows into Italy’s retail heartland

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M A P I C

O F F I C I A L

From the Eternal city to Sicily, how Italy’s retail profile is changing

P U B L I C AT I O N

ITALY Country of Honour 2011

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ITALY Country of Honour 2011

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In search of the true Italy

➤ EDITORIAL

Italy, recognised this year as Country Of Honour, has alFew European retail markets offer as many contrasts and ways been one of the most important nations at MAPIC and contradictions as Italy. The home of one of the continent’s its outward-looking local authorities have a long tradition of great cuisines, its supermarkets have failed to conquer presenting their appeal to both domestic and international Europe in the way that French, British or German chains retailers, developers and investors and — that contradiction have achieved. again — of frustrating red tape! Currently Italy has more Yet with a strong heritage in textiles — along with France it is retail space under construction than any other Western Euthe home of high fashion — Italy’s luxury groups have crossed ropean country and with relatively low foreign market penthe world, with their focus firmly now set on the lucrative etration from retailers. Opportunities exist from north to Asian markets. However, at home many of Italy’s retailers Nathalie Depetro, south, while international investors have begun to inject have expanded little beyond the north and centre of the coun- Director of MAPIC more money into shopping centre schemes. try, leaving much of the south to smaller independents.

In this special supplement, available in both Italian and English, we Economically, Italy has also maintained low inflation for well over a have provided a snapshot of just what Italy offers at home and decade and still it finds itself in the eye of the eurozone storm, worldwide, and the events surrounding the Italian retail property awaiting the possible impact of the crisis should it spread beyond industry at this year’s MAPIC. Ireland and Greece.

➤ CONTENTS Italy in figures

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All the facts and figures on one of Europe’s most important retail markets

A new era for Italy

Interview: Geox chairman Moretti Polegato, who will be recognised as the Personality Of The Year at MAPIC

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The Italian retail real estate industry will arrive at MAPIC with an ambitious agenda

Italy’s retailers race for space

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Domestic and international retailers are looking for new opportunities across the country

The big build

Living and breathing Geox

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Retailers look east for new horizons Few countries can claim to have extended their retail presence as significantly as Italy, with the upsurge in luxury demand in the east continuing to drive growth

Deal or no deal?

Italy’s investment market has been sparked back into life by a small collection of important deals

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Italy leads Western Europe on project space under construction

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Shoot for the Moon From home grown schemes to international projects in emerging markets, Italian exhibitors will have plenty to showcase at MAPIC

OCTOBER 2011 Director of Publications: Paul Zilk Printed on 100% recycled paper

Editor-in-Chief: Mark Faithfull Associate Editor: Paola G.Lunghini Sub Editor: Sally Nash Proof Reader: Debbie Lincoln Technical Editor in Chief: Herve Traisnel Deputy Technical Editor in Chief: Frederic Beauseigneur Graphic Designer : Carole Peres

Editorial content: Closed on August 31 Image Credits : Press Offices of the mentioned companies and entities We thank all the mentioned companies and entities. We thank also all the non mentioned sources

Content Director : Jean-Marc Andre Publications Production & Development Manager : Martin Screpel Publishing Product Manager : Chealsy Choquette Publishing Co-ordinators: Emilie Lambert, Amrane Lamiri, David Le Chapelain Production Assistant : Veronica Pirim Production Assistant, Cannes Office : Eric Laurent Printer : Riccobono Imprimeurs, Le Muy (France)

BP 572 — 11, rue du Colonel Pierre Avia — 75726 Paris Cedex 15, France — Contents © 2011, Reed MIDEM Market Publications — Publication registered 3rd quarter 2011 — www.mapic.com

All rights reserved . Quotations for press purposes are allowed, provided that Source is properly mentioned • Reed MIDEM and MAPIC thank all the Italian economic and specialised press that, from the beginning, did support and supports MAPIC •

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R E TA I L OV E R V I E W

Italy in figures Italian retailers have been major drivers of luxury’s global growth, while domestically the country is restructuring economically in the aftermath of the global downturn. Mark Faithfull looks at how the country is faring

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through a controversial €43bn austerity packne of Europe’s big five retail age which aims to achieve a balanced budget economies, Italy remains a in 2014. country of contrasts. A world Italy has been working hard to stabilise its class luxury goods producer with a famous texeconomy for some years and since the late tiles industry, the country’s fragmented 1990s consumer price inflation domestic retail sector means has been in a moderate range of that there are few dominant around 2-3%. Analyst Planet players. And despite its famous Retail points out that with Italy cuisine, the big five grocers acItaly has been working one of the less wealthy markets count for a relatively low hard to stabilise its within the EU (compared with proportion of the total food market, while a north-south di- economy for some years powerhouses such as Germany and the UK), consumers still vide remains in market have some catching up to do, penetration and development particularly in the south of the activity. country with its underdevelCurrently Italy is also watching oped and underfunded from the sidelines as the eurostructures. As a result, private consumption zone attempts to stabilise its most indebted has been among the key growth drivers over members: Greece, Ireland, Portugal, Spain and, the last decades, as in most years private conof course, Italy. Cost-cutting measures face the sumption grew slightly faster than GDP. Italian people after the government pushed

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Demographics Cities Rome Milan Naples Palermo Source: World Book

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MAPIC 2011 events include: Tuesday, November 15 19.30 Opening Night Cocktail Party sponsored by Rustioni & Partners, IDG SIIQ, JLL, Larry Smith Italia, McArthurGlen Designer Outlets Thursday, November 17 11.00-11.45: Keynote speaker, Mario Moretti Polegato, founder and chairman of Geox 12.00-13.00: Panel, How To Penetrate The Italian Market 15.00-16.00: Panel, Great Projects For Great Players

ITALIAN RETAIL SEGMENTS BY SALES

ITALY: VITAL STATISTICS GDP Population GDP per capita GDP growth rate Population growth rate

WANT TO KNOW MORE?

$2,06tr 61.0 million $30.,500 1,3% 0,42% 0-14: 13,8%; 15-64: 65,9%; 65+: 20,3% 3.36 million 2.96 million 2.27 million 0.87 million

2010 (€) Retail sales

373.4bn

Retail sales per capita

6,189

Grocery retail sales

165.4bn

Grocery retail sales per capita

2,742

Total consumer spending

937.3bn

Total consumer spending per capita

15,534

Grocery spending

145.8bn

Grocery spending per capita

2,417

Non Grocery spending

442.1bn

Non-Grocery spending per capita

7,327

Source: Planet Retail

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Growth of consumer spending has slowed in recent years as economic changes in Italy and a slowdown in the rest of Europe have taken their toll on the disposable income of Italian consumers. Following the recession in the second half of 2008, consumer spending per capita went down in 2009 but rose again in 2010 and is expected to further grow in 2011.

Grocery retail sales as a proportion of national retail sales are quite low in value when compared with most other EU economies, in part because of the strong presence of open markets and farmers' direct sales in the economically less-developed south. In the north of the country, higher-priced modern formats play a much more significant role.

Italians are, of course, world famous for their food and generally place great importance on premium food quality, are more health-conscious and more demanding in terms of food information, freshness and presentation than most EU countries. Because of this, consumers are also prepared to pay higher prices than elsewhere, although discounters are also thriving.

One obstacle to short-term growth is the country's economic division into two halves, with the largely saturated (albeit not strongly consolidated) north and the far less developed south, where it is hard to operate profitable large-scale operations because of the local spending power. However, retail opportunities will be boosted next year - Italy currently has 394,000 sq m of retail under development. ■

Milan’s Galleria Vittorio Emanuele II: The city remains a retail stronghold

TOP GROCERY RETAILERS: 2010 Company

No. of Total sales Average sales outlets area (sq m) area (sq m)

Grocery Grocery retail spending marbanner sales (€) ket share (%)

Coop Italia 1,500

1.63m

1,086

10.4bn

7.11

Auchan

1,710

1.91m

1,121

7.2bn

4.91

Conad

2,568

1.1m

431

6.5bn

4.91

Carrefour

1,303

1.1m

890

4.9bn

3.39

0.49m

3,500

4.4bn

2.99

Esselunga 141 Source: Planet Retail

MAJOR TRANSACTIONS IN 2011 Building

Location

Retail type

Savignano sul Romagna Retail Park Retail park Rubicone

Deal announced

Price (€m)

Seller

Buyer

February

69

Pradera

Segece-Klepierre

Milan

Department March store

205

Prelios, Investitori Associati, RREEF, Tasso

Central Retail Corporation (Bangkok)

Fidenza

Retail park

June

40

Unieco

Radegonda, Cordea Savills

Palermo

Hyper

July

36

Ipercoop Sicilia

IGD SIIQ

Cremona Po

Cremona

Shopping centre

August

82.5

Westfield Milan

Milan Linate

Shopping centre site

August

115

Rinascente department store Fidenza Shopping Park Centro Commerciale La Torre

Coop Lombardia, Eurocommercial Gruppo Finim, Properties CMB Westfield, Stilo (Gruppo Development site Percassi)

Source: Retail Property Analyst

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I TA LY AT M A P I C

A new era for Italy The Italian retail real estate industry will arrive at MAPIC with an ambitious agenda and plenty of new development work, says Paola Lunghini

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Maria as its new CEO and he took the task to t MAPIC 2011 those who, until steer Aedes across the stormy waters that the two MAPICs ago, used to meet company has faced in recent years. him at the IGD-Immobiliare One of his first decisions was — Grande Distribuzione SIIQ at the beginning of August — to stand (where he had been CEO sell Agorà (which manages a 25of that company for years) will shopping centre portfolio across perhaps be a little surprised to We should hold the country) to the Milanese see Filippo-Maria Carbonari at high the flag of the Pryma RE, controlled by ArAgora’s stand this time round. country! cotecnica RE-WTP Group.

The company specialising in reClaudio Albertini, If the sale represents for Aedes a tail services and, since 2005, IGD SIIQ further step in rationalising its part of listed property company business scope, to reduce costs Aedes, has installed Filippo-

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CNCC/POPAI Thursday, November 17 14.3016.00, Great Projects For Great Players Selected promising retail concepts, shopping centre projects and retail real estate funds will explain why they choose Italy. Moderated by Pietro Malaspina, the event will cover five large retail development projects in Italy and will also feature Daniele Traces, president of POPAI in Italy.

Familiar face, new direction: Filippo-Maria Carbonari, CEO of Aedes

Arcobaleno retail park in Colonnella, Teramo province is near the Val Vibrata shopping centre

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Pietro Malaspina, president of CNCC Italy will be presiding over a session at MAPIC

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Seravalle: McArthurGlen’s first outlet centre in Italy opened in 2000

and to focus on the core business of the company itself, it is also the start of a “profitable collaboration with new partner Arcotecnica.

This will allow — thanks to a collaborative agreement — to develop retail services without directly managing a specific structure,” the company explains.

In Cannes, Carbonari will be joined by much of the Italian retail real estate industry, which as ever will have a major presence at MAPIC. Companies historically in attendance, such as Draco,

Eurocommercial Properties Italy, Europ Invest, ICC-Italiana Centri Commerciali, McArthurGlen, Promos, REAG, Secece and Sircom will once again be there, joined by specialists such as networks consultancy Rustioni & Partners and communication and promotions businesses like Canali & C, which recently ran an “explosive” campaign created for GCI-Gallerie Commerciali Italia, which included 41 Auchan malls and featured the richest jackpot ever in the Italian retail industry. There will also be catchment area

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Italian advocate: IGD SIIQ CEO Claudio Albertini

analysts like Sincron Inova and business service at large specialists like Dedem.

And that’s not to forget architects, and technical providers such as Mirage Granito and Ceramiche Caesar, or the Italian offices of global agents such as C&W, CBRE, and JLL. CBRE-Espansione Commerciale is headed by CEO Mario Taccini and Esmeralda Cappellini, responsible for property management, and the company will showcase some currently marketed projects such as: Parma Urban District,

ITALY REMAINS FOCUS FOR IGD SIIQ “For a Group like ours and with Italy as the Country Of Honour we consider it a fit and proper story. We should hold high the flag of the country!"

So begins Claudio Albertini, CEO of IGD SIIQ, one of the major Italian players in the country’s property sector, on the session on November 17 which considers some of the biggest current projects in Italy.

Albertini’s own company develops and manages shopping centres across the country and boasts an important presence in retail in Romania with the acquisition in 2008 of Winmarkt Magazine. The Group can count 15 shopping centres and a head office, located in 13 Romanian cities.

The company became the first to enter the SIIQ regime in Italy (the Italian

derivation of real estate investment trusts).

"The property portfolio of IGD, valued at about €1.8bn to December 31, 2010 (including in Italy 18 hypermarkets and supermarkets and 19 commercial galleries and retail parks) has further strengthened in the period up to the summer,” explains Albertini. “With the acquisition of The Tower shopping centre for an investment of €36m, plus some smaller acquisitions, we are at about €1.9bn".

The new strategy of recycling funding was defined in a business plan for 2009-2013, which was updated in November 2010, and Albertini anticipates new investments generated from the turnover of some of the divested assets of about €100m on top of the

original €750m considered in the original plan.

He is insistent that this investment will not be spread internationally: “No, no, Italy, Italy,” he says, underlining the company’s "solid financial structure", as he reasserts the importance for the Group of the multi-purpose Porta a Mare project for the regeneration of the waterfront development at Livorno, in Tuscany. This 10 ha site, developed with Porta Medicea, which IGD has a 60% stake in. The remaining 40% is owned by Cooperare, the cooperative movement of the CMB-Society.

After this, IGD will start the commercial element of the historical Palazzo Orlando, positioned at the entrance to the site.

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Parma (Emilia Region), GLA 49,600 sq m, 163 units, opening winter 2013; La Cartiera in Pompeii, near Naples, GLA 30,500 sq m, 120 units, opening spring 2012; and Kalt Center in Caltanissetta, Sicily, 23,000 sq m, 88 units, opening winter 2012-2013. CBRE will also present its own Italian retail real estate report.

The retail leasing structure of Cushman & Wakefield, co-ordinated by Francesco Dalla Cioppa, has recently formalised an agreement with the Italian Bardelli Group, to market the extension of Citta Fiera, the largest shopping centre in the Friuli-Venezia Giulia Region in the North East of Italy. Inaugurated in 1992, the scheme includes 200 units, a hypermarket and many other leisure facilities, and the extension will add 80,000 sq m to the existing 90,000 sq m of retail.

In July, Cushman & Wakefield advised Foot Locker on its relocation in downtown Milan.

The new, 900 sq m three-storey flagship for the American retailer is the largest in Italy.

CNCC, the Italian Council of Shopping Centres, led by Pietro Malaspina; and POPAI, headed by Daniele Tirelli, will attend MAPIC in what they describe as their “best shape ever”, “aggressive” and full of a passion that the crisis has contributed to retail regeneration. Italy is also sponsoring — through IGD SIIQ, Jones LangLaSalle, Larry Smith and Rustioni & Partners — the MAPIC Opening Cocktail party on November 15 at the Marriott.

There is also an Italian member on the MAPIC Awards jury: Stefano Stroppiana — who has many years of experience in the retail industry, particularly for the Percassi Group — and is now a well-reputed retail real estate consultant. And, last but not least, Italy will applaud Mario Moretti Polegato, founder and chairman of footwear and fashion retailer Geox, who is a keynote speaker at MAPIC. His address will be on innovative entrepreneurship for a successful business and he will also be awarded Personality Of The Year at MAPIC 2011. ■

Best foot forward: US chain Foot Locker recently relocated its Milanese flagship to Corso Vittorio Emanuele II

DOLCE VITA RETAIL EXPERIENCE Fly to Rome on a retail study trip with MAPIC. Straight after MAPIC spend two days in Rome, following an evening flight on November 18.

Saturday, November 19 Discover exclusive Italian concept stores and shopping centres and seize new opportunities through the store tour.

Delegates will visit a number of innovative concepts including: Christina Bomba, set up as an ‘art gallery and store’; delicatessen and in-store fast food concept Volpetti; pizza chain Rossopomodoro and tableware concept Gusto.

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Sunday, November 20 Cultural visit around Rome followed by flight back to Nice.

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CONTACT

S t d S l t “

Catherine BEAULIEU Tel: +33 (0)1 56 26 52 07 www.missions-mmm.com

v t s On the waterfront: Nova Marghera continues the transformation of Venice

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NEW OPPORTUNITIES

Italy’s retailers race for space The big Italian retailers have flexed their muscles in 2011, looking for both domestic and international expansion, while US and European brands have made their move on Italy. Paola Lunghini looks at the main players

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f you recognise representatives of Coin Group wandering through the stands of MAPIC, well, they are not there on behalf of the heirs of Vittorio Coin, from Venice, who in 1916 founded a shop which now , nearly a century later, has become one

of the largest fashion retailers in Italy and Europe. At the end of June international private equity fund BC Partners took control of Coin, which recorded sales of €1.7bn in 2010 and has 824 stores in Italy and 84 internationally. Coin has major aspirations for Eastern Europe.

At MAPIC you will also meet Aldo Mazzocco, CEO of Beni Stabili, the oldest Italian property company and now the second SIIQ in Italy.

Mazzocco was appointed president of the association for Italian real estate Assoimmobiliare in July, and he is eyeing new

It took a €20m investment to create Coin Excelsior in the centre of Milan in Galleria del Corso

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developments and is very much interested in high street retail too. In a very central Milanese building of Beni Stabili’s portfolio on corso Vittorio Emanuele, Coin inaugurated in September its new Milanese flagship store, Coin Excelsior. It takes the name of an old-fashioned movie theatre, based at the same location for decades. To host Coin, Beni Stabili invested a lot of time and money, €20m to be precise. But the deal was worthwhile: the new store, designed by renowned architect Jean Nouvel, includes some 5,000 sq m of retail plus an upscale food court, intended to be one of the most striking in Milan’s downtown.

Also part of the Coin Group is OVS, which recently opened in Paris and Athens. The new stores are part of a strategy which will include

some 20 new openings outside Italy by the end of 2011. OVS currently has 539 shops, 70 of them outside Italy.

Grandi Stazioni and Centostazioni will also be attending MAPIC. The two companies are transforming the image — and the sense — of the country’s central railways stations, with a wide offer of new space for non-food and food units. So, new opportunities are becoming available for retailers.

Coin recently opened in Roma Termini, the main station in the capital; and Milano Centrale, the Milanese central station. It is now featuring brands like Benetton, Broggi, Geox, not to mention Desigual — the Spanish retailer is also expected to open a new unit in Milan downtown.

Gap’s Milan store is one of five, with the summer opening of a Rome store making a big splash

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Deal maker: Aldo Mazzocco is CEO of Beni Stabili and president of the association for Italian real estate Assoimmobiliare

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An A-Z of retailers operating in Italy will be at MAPIC, from Autogrill (present in 35 countries, 65,000 staff, 5,300 units in 1,200 locations, including 111 airports) to Zara, which at the end of July acquired the entire 4,500 sq m Vittorio Emanuele building where it opened its first Milanese shop, paying at around €103m.

Some retailers are very active , among them the fast fashion industry names such as Abercrombie & Fitch, Banana Republic, Benetton and H&M, but food chains are prominent also: Rosso Pomodoro and Rosso Sapori, Cigierre — which promotes among other things the brand Old Wild West — Giovanni Rana and Fratelli La Bufala.

MyChef, part of the international Elior Group, forecasts some 20 new openings in Italy by 2013. A leader in airport locations, MyChef is now eyeing motorways with new brands Briciole and Foglie.

Gap’s opening on via del Corso in Rome this summer spawned streams of ink as it became the fifth Gap store opened in Italy by the American retailer in less than a year, with

plans to have 20 more stores by 2012.

In addition, Neapolitan retailer Harmont & Blaine has ambitious projects planned and the company has shown interest in new shops in Barcelona and London, having already opened in Panama, Dubai, Russia and China.

Also based in Naples, fast fashion leader Capri Group is the producer of the Alcott brand and has established 130 shops worldwide, of which 30 are in Italy. In June it inaugurated its completely renewed flagship store, a 1,400 sq m unit in via Toledo, Naples downtown, after a highly successful 2010, with sales showing double digit growth.

G&P Group, based in Tuscany (GeoSpirit and Peuterey) has declared its intention to go to China and to open there 20 shops. Its main competitor is Moncler, which after having renounced listing on the Milanese Stock Exchange, opened two new units in July: in Vienna and in Forte dei Marmi, the famous “pearl of in Versilia”, Tuscany.

Fingen, a company that is part of the Florentine family Fratini, has become established for its outlet centres developed in a joint venture

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with McArthurGlen and it too has started to make its move for China. Near Beijing the Florentia Villege has been created and four more schemes have been announced, each of them with an investment of €70m.

Tod’s is also looking towards Asia. The company, which owns also Hogan, Fay and Roger Vivier, boasts 161 directly-owned stores and 70 franchise units and was another to record double digit growth in sales in the first half of the year.

During the summer, eyewear retailer Luxottica bought Erroca, which has 60 shops in Israel, penetrating that market for the first time as part of a €20m investment. The chain will be re-branded Sunglass Hut, Luxottica’s platform which is already active in Latin America and China.

New shops are in the pipeline for Camomilla, which currently has 130 units, 120 of them franchise outlets, mainly located in airports and railway stations.

Meanwhile Apple carried out glamorous openings in Bologna and at I Gigli shopping centre near Florence where the 1.000 Apple TShirts sold like hotcakes. ■

RUSTIONI & PARTNERS: MAKING A NOISE AT MAPIC The “reasonably optimistic”, Rodolfo Rustioni, head of the company that bears his name (Rustioni & Partners), reflects that the market is “ready again”, and declares that the future — both for city centres and for shopping centres — could lead to many innovations.

Rustioni is in a good position to comment. Over 20 years his company has dealt with consulting for the big retail chains and many openings of prestigious brands in Italian locations.

Ambitious plans by Italian retailers seem to bear him out. For example, Neapolitan restaurant group Red Tomato (which also includes trademarks Anema Mussels and Red Taste, all backed by UK fund Change Capital Partners, which currently owns 63% of the chain) announced a development programme in

the US and UK, and a robust expansion plan for Italy. The company is talking about opening more than 300 new restaurants altogether by 2018.

Also during the summer Sonae Sierra and ING Real Estate Development announced that H&M and Media World would take significant space in joint development La Terrazze shopping centre, which is currently under construction in La Spezia, Liguria.

For H&M the 1,800 sq m store is the third store in the region, while for Media World the 3,000 sq m unit is the second opening in Liguria, and will have about 3,000 sq m. In Italy, the company already has 89 stores, located primarily in major shopping malls.

Rustioni, as adviser, has so far kept a discreet profile, but at MAPIC 2011 the

company has decided to “go out and out” says Rustioni. In addition to cosponsoring the opening party dedicated to Italy, on the evening of November 15, the company has also helped organise a panel session as part of the conference programme, which will be held at the Palais on November 17, 12.00-13.00, entitled How To Penetrate The Italian Market.

Speakers include Ermanno Nicoli, CEO of Corio in Italy (the group boasts a portfolio of about €7bn in value, of which €1.5bn is invested in Italy), who has extensive experience in retail; Tim Santini, responsible for Eurocommercial Properties activities in Italy (€2.5bn of assets, 41% in Italy, 35% France and 24% in Sweden), plus the thoughts of Robert Forcheri, managing director of Guess.

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B R OW N F I E L D & G R E E N F I E L D

The big build There is plenty of development going on around Italy. Paola Lunghini offers a whistle-stop tour of some of the notable projects, including the arrival of Australian developer Westfield in Milan

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n Milan, the focus is on the Mall of Italy, a 170,000 sq m shopping centre located in Linate, close to the city’s airport. This €1.2bn mega-project was presented at MAPIC a couple of years ago as a preliminary scheme but now the developer Stilo (part of the Percassi Group) can show clearer proposals. Antonio Percassi, founder of the company, announced in August an alliance with Australian developer Westfield Group, which has committed itself with an initial €125m investment. Flushed with the success of its two London schemes, the Australian giant is confident that the newly-dubbed Westfield Milan will be a success and that it will be ready in time for Expo 2015 in Milan, in order to catch the millions of new tourists who will converge on Milan to visit the world exhibition being held near the Milan Fair.

In Venice Lifestyle Center is currently being marketed by the local developer Nova Marghera. A waterfront regeneration of 150,000 sq m, the project boasts as hub the Expo Mare 2015, connecting with the Milanese Expo.

In Pordenone, Friuli Venezia Giulia Region, a new 15,000 sq m retail park was recently inaugurated. Standard life made the €27m investment and the promoter is Panattoni Europe, which has in the pipeline further initiatives in Voghera, Lombardy, and Emilia.

La Spezia, a nice seaside town in the Liguria Region, will see in the spring of 2012 the opening of Le Terrazze, a shopping centre jointly developed by Sonae Sierra and ING RE Development. With a GLA of 38,500 sq m, the centre is already 85% pre-let.

In September 2012, Faenza, a town in the Romagna Region, will see the opening of the

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27,000 sq m Lifestyle Perle di Faenza, which will include 125 shops. Joint venture partners are Bartozzini Costruzioni and Unieco the investor, while Promos — from Brescia, Lombardy, led by Carlo Maffioli, specialising in outlet centres — is the promoter. The lat-

ter is also marketing the outlet centre in Melilli, Sicily, supporting Fashion Group.

In Rome, along the highway to Fiumicino Airport, a new project has been announced

by Leonardo Caltagirone Group. Parco Leonardo Square is a concept, which will in-

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clude fashion, cars, sports, household goods and grocery, the best of ‘Made in Italy’.

Near Naples, La Birreria is currently under construction. The regeneration of the old Peroni brewery is being developed by Cualbu Group — which is the developer of Centro Sicilia, in Catania, which includes 140 shops and 12 anchors, inaugurated in June 2011 — and opening is scheduled for 2014. The multifunctional complex will comprise 25,000 sq m for retail use, marketed by Sogeprim RE, a service company based in Salerno, and founded by Salvatore Iodice. The same company successfully marketed Le Bolle shopping centre in Eboli (near Salerno), a 21,000 sq m centre with 60 units, promoted by Boldrin Group. Around 200 new jobs were created in an area of high unemployment.

Also in Salerno, the 45,000 sq m Le Cotoniere is under construction, with 135 shops, a hypermarket and 2,500 parking places, in a €85m investment. The shopping centre is the hub of a regeneration development which will create residential buildings, of-

fices, a park and new infrastructure.

In Palermo, Sicily, Zamparini Group is near to opening the shopping centre Conca d’Oro, with a GLA of 55,700 sq m, 4,000 sq m dedicated for leisure facilities, around 100 shops and 2,900 parking spaces. The concept is sustainable and a significant percentage of the space has been taken by local retailers.

However, at the end of July IKEA announced its decision to cancel the Pisa project. Near the

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world famous city in Tuscany, the company was committed to building a €100m centre.

IKEA has also decided not to open in Turin with a €70m centre, blaming too many delays and too much bureaucracy.

The retailer is not alone in complaining of such issues and for Italy to succeed as a retail location it is clearly vital that it supports inward investment and helps these companies to develop new projects. ■

TCM: RE-EVALUATING THE EVOLUTION OF THE CITY “Our cities, with hundreds of pieces — old towns, neighbourhoods, parks and suburbs, inhabited by thousands of residents, workers, consumers — are not just a place for business or leisure, but they are the beating heart of the community.

Working on these areas means acting not only on urban real estate assets and setting-up the city, but you involve people, influence and change their place of living, working and leisure," says Elena Franco, founder of Town Centre Management Italy, a company that deals with management of city centres. Assuming that shopping centres can be managed and planned, however, we must recognise that management difficulties are greater, as the public component of private property and fragmentation poses very complex issues.

"It’s important for us to take into account the perception of actors and users of city centres, the performance of the urban environment, the potential and the commercial appeal. Our goal is to help measure performance in terms of pedestrian flows, the composition of the product mix, parking, quality of public spaces and real estate assets, satisfaction of traders and consumers, purchase behaviour, the endowment in terms of business." says Franco.

Each city also has its own local potential. "The thrust is towards the creation of districts, then new players, urban development and elements of synthesis as well as champions of the interests of city centres,” she says. “To create this we need four basic ingredients: the creation of a public-private partnership among all stakeholders; a cross-sector approach to the problem and an inter-disciplinary approach, the definition of a shared strategic vision and, last but not least, the use of dedicated professionals" The most successful example to date is in the region of Lombardy, which launched its policy in 2007 with the revival of trade centres in the city with an ambitious programme for ‘districts of commerce’. Over three years, the region has seen the expansion from about 150 to 535 municipalities involved. That Lombardy is the first programme in Italy points not only to structural inactivity but also which regions care to establish continuity and professionalism.

La Terrazze shopping centre, currently under construction in La Spezia, Liguria

Piedmont is another good example, working not only to adapt the regulatory apparatus but also, for example, harmonisation of the public realm to improve urban quality. After the positive experience Piedmont had at MAPIC 2010, working with TCM and co-ordinating the Italian regions, the company is looking to organise a similar presence for MAPIC 2011, to which have been invited, among others, the Liguria Region and the Chamber of Commerce of Varese. Franco concludes: “The district is experiencing a new positioning: from a pure investment product to a commercial product.”

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M A R I O M O R E T T I P O L E GATO

Living and breathing Geox As part of this year’s prestigious MAPIC Awards gala night, Geox chairman Moretti Polegato will be recognised as the Personality Of The Year. Paola Lunghini asks him about Geox’s future plans and the legacy he hopes his company will create for his home country

President Moretti Polegato, you will receive the Personality Of The Year Award during this year’s MAPIC in Cannes. What does it mean to you to receive such recognition?

This is a prize that does really please me and encourages me and all of the people who contribute within my group. MAPIC is a very important stage at the international level.

Talking of the international focus, what is your vision for globalisation?

“

It is necessary to be very close to the customer

”

It is necessary to be very close to the customer and also to find in each country the products that could succeed in other markets.

Geox sales in Italy represent around 40% of the total and your business is already present in over a hundred markets, with more than 10,000 sales points and about 1,050 Geox stores. Is where you are concentrated today where you will grow in the future?

Naturally enough we are looking at the regions to the east — in China we have over 250 points of sale — but we are also looking to the markets that ‘awaken’. An example is the UK. I am looking for an acceleration in the emerging markets, like Russia and the countries in Eastern Europe, but not at the expense of the mature markets.

What makes Geox unique?

Geox is an established brand. We knew how to combine the beauty and the style of the Italian product, which is internationally recognised and appreciated, with an innovative technology, that is in continuous evolution.

Geox today means classic and casual footwear and "the shoe that breathes", but also fashion is starting to become important in your overall sales.

Yes, today fashion represents over 13% of our total sales, but the objective is that of growth in proportion with the footwear, such as with "the jacket that breathes", and with the total look.

Geox’s stunning new flagship in Milan embodies the company’s mix of design and technical innovation

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You will come to Cannes also as a keynote speaker and representing Italy. What will you say about Italy and prospects in the market?

I agree, that will be interesting — also as I will be addressing the property profile — for all of the markets and as I said before, to look at the markets hit by the recession for which I see signs of awakening and where there is the need to create opportunities.

A lot has happened at Geox and in so short a time, what dreams remain?

The ambition is to continue to grow, to expand is in all the markets both mature and those showing potential. Italy is known all over the world for its design heritage, the fashion and its cuisine. My desire for Geox’s contribution is to make our country also thought of across the world for innovation and technology. ■

MAPIC Personality Of The Year: Geox chairman Mario Moretti Polegato

Mario Moretti Polegato will receive his MAPIC Award as Personality Of The Year during the awards ceremony in the Palais des Festivals at 18.00 on November 17

The ‘palace of breathing’: Polegatto sees opportunities globally, especially in new and awakening markets

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EXPORTING THE BRAND

Retailers look east for new horizons Few countries can claim to have extended their retail presence as significantly as Italy, with the upsurge in luxury demand in the east continuing to drive growth.

Mark Faithfull reports on an important year for the market

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conic Italian luxury retailer Prada launched on the Hong Kong stock market in June, setting out both its clear strategy to target the east and a growth plan other Italian luxury retailers will be watching with interest. Prada’s offering raised €2.1bn, valuing the company at over €10bn and making it one of the world’s most valuable luxury goods groups.

Prada opted for the Hong Kong stock exchange in recognition of the importance of Asian consumers, who are propelling growth in luxury goods. Italian luxury good association Altagamma predicts sales to Asia, excluding Japan, will rise 20% this year.

For Prada, which includes MiuMiu and Church’s, it was the fifth attempt at the stock exchange in a decade, having ditched earlier tries citing market

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conditions. It now intends to repay bank debt and to roll out dozens of new stores with a focus on Asia. Prada is 95% owned by the Prada and Bertelli families and 5% owned by Italian bank Intesa Sanpaolo, which had said it will retain a small stake.

Luxury footwear retailer Salvatore Ferragamo also listed on the Milan exchange in June.

Meanwhile Sergio Rossi, owned by PPR Group, has set out to purchase five of its franchisees in China by September. In all, 11 Sergio Rossi stores are in operation but the company plans to double that number by 2014, as well as establish flagships in Beijing, Shanghai and Hong Kong.

Christophe Melard, president and CEO of Sergio Rossi, stressed: “Acquiring [these] Chinese franchisee businesses allows us to accelerate our presence. We will continue to strive for maximum performance in the existing stores

and expand new locations not only in first-tier cities but also in second- and third-tier cities.”

Not that Italian exports are only about high end fashion. In July, Benetton Group, increased revenues 1.7% in the first half year to €906m, with modest growth in Europe (+1.2%) accompanied by growth in Asia (+4.7%) and in the Americas (+4.5%). Countries with the highest growth compared with the same period in 2010 were: Russia (+39% and now the Group’s fourth largest market in Europe), South Korea (+11%), Turkey (+6%) and Mexico (+18%).

Benetton has also hired You Nguyen as new chief merchandising officer and creative director. Nguyen, previously design vice-president at Levi Strauss, is to revamp the brand in a role similar to Tom Ford’s at Gucci.

Ray-Ban and Oakley sunglasses maker Luxot-

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GROCERY SECTOR STAYS AT HOME By contrast to the outgoing fashion sector, Italy’s grocers have failed to expand significantly beyond their own borders.

Discounter D'Più (Padua) has expanded into Austria while Coop Italia entered the Croatian market, with the opening of its first hypermarket, Ipercoop, near Zagreb in September 2002 before selling to Spar (Austria) in 2009.

In November 2004, Italian discount operator EuroSpin entered the Slovenian market with its first four discount outlets with Slovenian partner Era. It also plans to open EuroSpin stores in other Balkan states and has renewed its plans to enter Austria. The Tyrol region, Carinthia and Salzburg are the focus for a 10-store initial push but no timeframe has yet been given as market entry depends on the expansion in its home market. The retailer also has expansion plans for Croatia and Hungary.

tica, the world's biggest premium eyewear maker, achieved a record second-quarter net profit, despite the impact of a weak dollar on its North American sales, with second-quarter revenue growth of 2.4% to €1.63bn.

Luxottica is boosting its presence in Latin America after buying two Mexican chains and taking control of optical retailer Multiopticas International.

Meanwhile, underlining the continuing influence of Italian designers, Swedish fashion retailer H&M has signed up Donatella Versace as its next guest designer, with the collection launching in 300 H&M stores worldwide from November 17. A pre-spring 2012 collection will be sold exclusively online in selected countries from 19 January.

“I am thrilled to be collaborating with H&M and to have the opportunity of reaching their wide audience. The collection will be quintessential Versace,” says Versace.

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MCARTHURGLEN Italy is arguably home to the designer outlet centre from a European perspective. Playing to the strong brand demand and fashion heritage of the country, plus the current emphasis on value, designer outlets suit consumer demands ideally.

“Italy is one of the most developed markets in Europe for outlet retailing, only just behind the UK, and yet we are still seeing strong demand from brands in our five McArthurGlen DeGary Bond, CEO of development, signer Outlets in the country,” says McArthurGlen Gary Bond, McArthurGlen’s CEO, development. “The Italian shopper understands and loves branded products; they spend a much higher proportion of their earnings on clothing and footwear than their counterparts elsewhere in Europe.

“What we are also seeing is a strong increase in spending by international shoppers, in particular from the emerging markets in Eastern Europe, Asia and Latin America. Our Veneto Designer Outlet near Venice, for example, has seen a 160% increase in sales to international shoppers in the first seven months of 2011 [source: VAT fund specialist Global Blue].”

But Bond adds that keeping things fresh is vital for the success of any outlet centre. “Quite a few new, international brands are targeting Italy, in particular well-known US brands, as they expand across Europe,” he reflects. “On average our shoppers drive around 45 minutes and to do this they need the anticipation of finding brands that they already love or aspire to.”

Serravalle Designer Outlet near Milan in 2000 was the company’s first in the country but Bond believes there is still room for growth, although for McArthurGlen the current strategy is for this to be through extensions. “We have no plans for a sixth McArthurGlen Designer Outlet in the immediate future as we are under way with extending our existing centres,” he says, citing the 25,000 sq m of new GLA opening in Italy between September 2011 and June 2012.

This new GLA includes: 4,500 sq m GLA at La Reggia Designer Outlet near Naples (opening September 2011), bringing the total GLA at the centre to 25,500 sq m; 6,500 sq m at Veneto Designer Outlet near Venice (Q1 2012), bringing the total to 26,000 sq m; 8,000 sq m at Castel Romano Designer Outlet near Rome (Q3 2012), bringing the total to 32,000 sq m; and 6,000 sq m at Barberino Designer Outlet near Florence (Q3 2012), bringing the total area to 27,000 sq m.

Italian retailers also continue to expand in the Middle East. The 2,750-store chain Calzedonia Group and Lebanon-based Azadea Group have entered into a franchise agreement to launch Intimissimi, Calzedonia and Tezenis in the region.

Prada has also signed a joint venture deal with the UAE’s Al Tayer group and Prada and Miu

Miu stores will be rolled out in Bahrain, Saudi Arabia, Kuwait, Oman and the UAE. “[The deal] aims to seize opportunities in high potential markets,” the companies said in a joint statement. Al Tayer also represents Gucci, Dolce & Gabbana and Emilio Pucci in its franchise portfolio. ■

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INVESTMENT

Deal or no deal?

Italy’s investment market has been sparked back into life by a small collection of important deals which could, says Paola Funghini, indicate that the country is back on the European investment radar

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n March 2011, First Atlantic Real Estate (FIRE), a company controlled by DeA Capital— through the so-called Ippocrate Fund — acquired the flagship La Rinascente building, managed by Preilos and located in Piazza del Duomo, in the very heart of Milan.

A €472m deal, the vendor was Holding R/U, made up of Prelios, RREEF and Tasso. In July, another closing was announced: the sale of R/U Holding itself to the Bangkok-based Central Retail Corporation (CRC), for €205m.

Rumours remain that CRC, having made its first Italian acquisition, would like to acquire the two La Rinascente buildings still on sale, in Rome and Palermo, Sicily.

Meanwhile FIRE merged — after long talks — with FIMIT SGR, giving birth to the largest Italian group in Italian property funds industry. Now called IDeA, the new company boasts a portfolio of €9bn and 19 funds under management.

Also at the end of July Eurosia, a joint venture between Pizzarotti Group and Coopsette, sold to the Mediolanum Real Estate property fund — managed by the Milanese bank group Mediolanum — the Mall of Eurosia, in Parma, Emilia Region, for €29m. The shopping centre was inaugurated in spring 2011.

At the end of June, Cordea Savills acquired for its new Radegonda fund the Fidenza Shopping Park, again in Emilia Region, for €40m from vendor Unieco.

In February Pradera Real Estate Fund, man-

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aged by Pradera Europe, sold the 40,000 sq m GLA Romagna Retail Park near Cesena (Emilia Romagna Region, again) to Klepierre, for €69m.

Compared with other markets, this news might perhaps appear inconsistent. But, because of the still difficult times in Italy, this collection of deals gives a small yet significant sign of optimism for the Italian retail real estate panorama.

Of course some Italian-international companies will be less evident in Cannes than in the past, including Multi and Foruminvest, while Redevco is reportedly considering closing its Italian operations. Looking at the major international investors — all of them very active in Italy in the recent past, including ING REIM, Schroder, SEB – have slowed developments and improvements.

Despite this uncertainty, according to Ermanno Niccoli, co-CEO of Corio in Italy (the other CEO is Marco De Vincenzi), Italy is on the radar again. And room for new initiatives has emerged, including extensions and new sites, particularly on brownfield locations, even if some territories appear to be mature. Tuscany and the south offer particular potential providing that the public administrations are less obstructive and the banks grant credit again. This is also the opinion of Mauro Mancini, one of the best known retail real estate consultants in Italy and the man who launched Multi in Italy, several years ago.

Last year 2010 saw the opening of 18 new

Mauro Mancini: Tips the south and Tuscany for investment

shopping centres, but the total surface area developed was less than 2009. The short term pipeline for 2011 should be around 1.5m sq m, providing all the schemes complete by year end, and in the medium term developers should add a further 3m sq m. This is likely to be biased towards the south to fulfill a historical gap between supply and (growing) demand, although development will not be exclusive to this part of the country.

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There are far more refurbishments in the pipeline, with a number of centres requiring complete restyling of tired malls, plus necessary improvements in terms of products and services mix, especially those linked with the leisure industry.

For developers, the question is what type of shopping centre will be required by consumers in the future. Carlo Romagnoli, head of ArcoRetail together with Luca Bastagli Ferrari, a company recently founded by merging the specialised skills of Arcotecnica RE and Global RESol, adds that it is “useless to cover and decorate with precious marble the basement of a mall, if the shop windows do not attract the customers.”

Roberto Bramati and Anna Momesso, president and sales director of Spazio Futuro, add that price, quality and atmosphere are key for food court development. ■

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Spazio Futuro’s Anna Momesso: Quality and price key for food courts

PATRICK PARKINSON, CEO OF JLL IN ITALY Your visibility at MAPIC will be important?

Of course, because there is no doubt that MAPIC is, for the retail real estate sector, the showcase par excellence.

How is the Italian market?

It is safe and a becoming little more exciting, even if the recovery does not show itself.

However there is more movement, and especially much the industry wants to do.

This year represents the 20th anniversary of Jones Lang LaSalle's activities in Italy and also you have lived in the country for about the same amount of time. How have you seen the market change?

There has definitely been a lot of progress made. From the concept of the shopping centre intended as a ‘container’, often unattractive, middle or even low-level business, the mall has often become a place of reference for many Italian companies. Its image has changed dramatically, and the offer has been raised to an ever higher quality, with the appearance even of luxury. The entry of large international players has helped the process, and has also stimulated professionalism across the Italian industry.

What will you bring to Cannes?

MAPIC provides an opportunity to define the final negotiations for Arcobaleno, located in Valvibrata (TE), which will open in the first week of November with letting at approximately 90%. This centre will integrate the typical retail park offer with over 3,000 sq m of restaurant space provided by more than 13 restaurants, with special effects and architecture related to a cinematic theme, and an 11screen multiplex. We will also discuss at MAPIC a

commercial zone in the middle of a shopping complex called The Forge, to be built in Urbino, a small operation of about 8,000 sq m for the city but also important for the infrastructure aspects that the project provides. There has been maximum attention to integration in the context of the project landscape and cultural references.

In terms of investment and Patrick Parkinson, advisory services, we will CEO of JLL Italy promote the sale of three shopping centres and retail parks.

Any news?

Yes, we will use MAPIC for the launch of a major marketing campaign and new initiatives promoted by the group Toto, which saw the involvement of the various skills of the two parts of JLL, agency and capital markets. Retail and services, cultural, student accommodation and an important range of entertainment and catering will be evident at the project in Chieti. An important element will be a people mover — a raised monorail transport system — which will have the departure station at the project area, leading to the old town of Chieti.

In addition, a Thermal Water Park will be completed by Wund, combining spa treatments with a water amusement park.

Patrick Parkinson is CEO of JLL Italy, together with Pierre Marin

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P R OJ E CT S H OWCA S E

Shoot for the Moon Whether it’s the other-dimensional Moon or international projects in emerging markets, Italian exhibitors will have plenty to showcase at MAPIC again this year says Paola Lunghini

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The Centro Campania, by Corio, at Marcianise, near Naples

he Moon, a project promoted by OverItalia for the Rossetto Group, a multifunctional park arising near Verona, Veneto Region, promises to “let consumers enter in another dimension, made of lights, sounds, colours and energy infusing”. When it opens in 2013, the consumer will also find a rich offer of goods and leisure, including a 7,300 sq m indoor-outdoor water park, and a ‘Disco Kart’. Global investment is around €150-180m.

Focus is on Turin too, where in September the new stadium owned by Serie A’s Juventus football team was inaugurated. It includes a 34,000 sq m Nordconad shopping centre with more than 60 units, among them Nike, OBI and Euronics. In the capital of Piedmont Region the market is looking at the Palazzo del Lavoro. The historical building, recently acquired by Pentagramma, a joint venture between Fintecna and Gefim, chaired by Stefano Ponchia, will be re-

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generated by Corio, which will act also as manager of the 28,000 sq m shopping centre, opening in 2015/2016 probably. Global estimated investment is €145m.

Headed by Carmen Chieregato, Cogest Italia (together with the parent companies Mall System, Promocentro Italia and La Policentro, chaired by Lino Iemi ) will showcase in Cannes

14 projects, among them Policentro near Naples, Partinico, Palermo, Sicily, and the 90,000 sq m Settimo Cielo near Turin, a €185m investment.

Cogest, which manages a 47 shopping centre portfolio with a global GLA of 1.1m sq m and more than 2,900 retail units, has recently started to operate in the office sector too.

Svicom, chaired by Fabio Porreca, will showcase

Le Botteghelle in Naples, a 240,000 sq m, multifunctional regeneration project, owned by Ragosta Group and Portamessina, in Sicily, with a GLA of 28,000 sq m. Svicom also has interests in Varna, Bulgaria, and in the Cleopatra Mall in Egypt. In Cannes the company will be showcasing InTown, an agency services platform in partnership with market leader Gabetti Group. ■

LARRY SMITH: PROJECT FILE "I think that MAPIC is the most important event in the calendar for retail real estate companies. Even in recent years of economic difficulties, the fair has proved an observatory that allows companies to adapt and refine their strategies and above all opportunities to develop new business.”

Thus began my conversation with Corrado Vismara, CEO of Larry Smith, a leading consulting company in the retail real estate sector, which will bring two new products to Cannes.

In Rome, Larry Smith has been appointed for the marketing of the new GLA 26,000 sq m MID — Fiumicino Outlet, which will have around 130 retail units, delivered in two phases of 85 and 45 stores, plus 2,500 parking spaces.

Project partner HCG will also act as coThe 60,000 sq m GLA Stozice will open in March 2012

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ordinator, with Merlin Projects Group as designer and Maltauro as general contractor. Planning should be achieved by the autumn.

In Ljubljana, Slovenia, the 60,000 sq m GLA Stozice will open in March 2012, trading from two levels, with 140 stores and parking for 3,000 cars. The 12,000seat Arena opened in August 2010, along with the 16,000-capacity stadium by the developer, Slovenia’s Grep.

Vismara continues: "Larry Smith's presence at MAPIC in recent years was also an opportunity to present at and develop activities internationally, particularly in Russia, Macau, Brazil and the Baltic States."

In Italy, Vismara shares the load with Christian Recalcati, who says that "today the Russian market, developed

Corrado Vismara: “MAPIC is the most important event in the calendar”

through subsidiary Larry Smith International, after two years’ slowdown is engaged on different, big plans for study activities, planning, merchandising and marketing.”