The social heart of urban centres
Lars Huber, CEO of Hines Europe, explains how retail is a core element in successful mixed-use city schemes
Retail has been in Hines’s DNA since the company’s inception in 1957. From the pioneering Galleria in the company’s Houston backyard where it set the benchmark for high-quality mixed-use urban shopping malls, to the largest shopping complex in Catalonia, Spain, and the first international brand outlet mall in Russia, we’re justifiably proud of our retail heritage.
Despite the current travails and challenges facing retail, the sector remains a highly desirable asset class that continues to excite and inspire us and our investment partners.
While disruption caused by evolving consumer behaviour and structural changes in retail have become more pronounced, our capacity to create environments where retailers can flourish and showcase their products, and where consumers want to spend time and engage with leading brands, has enabled our retail platform to grow and prosper.
Hines Europe’s retail portfolio has grown exponentially in recent years, and today represents €3.5bn AUM, accounting for around 400,000 sq m of retail space across a variety of retail property types, including mixed-use, high street and shopping centres.
We are firm believers that retail can be the most visible and vital part of a major, successful mixed-use urban project. The CityCenterDC scheme in Washington DC and the world-renowned, city-defining Porta Nuova in Milan, Italy – two of the largest and most important mixed-used projects in the world – are testimony to this conviction.
It is a philosophy to which we remain firmly committed as we pursue the development of the ground-breaking 324ha urban development at Cherrywood in Dublin, Ireland. The mixed-use development, which in addition to delivering over 8,000 new homes, will provide a 350,000 sq m town centre which will feature 67,000 sq m of retail, F&B, entertainment and leisure elements.
In Milan, Italy, we are repositioning the former financial district, Piazza Cordusio, into a retail destination. Delivering a unique retail offering for the city, we are bringing together Italy’s first Uniqlo flagship store and a Tommy Hilfiger digital store, alongside brands such as Yamanay, Under Armour and Levi’s, while working with the Municipality of Milan to co-invest in the transformation of public realm with a pedestrian square at its heart.
In the world of high street retail, both leading brands and investors continue to exercise a more selective and circumspect approach. In a similar fashion to office, residential and logistics markets, the key twin drivers of quality and location have never been more important.
Trophy assets in key European cities remain in demand, in locations with favourable demographics and strong economic growth. This positively impacts on footfall and consumer spend, particularly where the local market is boosted by tourism.
For Hines Europe, this has driven our continued interest in cities such as Copenhagen, Paris, London, Berlin, Athens and Barcelona, where we continue to execute investments on various separate account mandates, such as BVK, as well as our European Value Fund and Pan European Core Fund, selecting assets with excellent property credentials in the best locations.
We have also been pioneers in the introduction of value retail to Russia, firstly with the Outlet Village Belaya Dacha in Moscow, replicating the strategy in Saint Petersburg with the city’s first outlet village, Pulkovo (see below). Pulkovo is an open-air shopping destination, developed in 2015, which brings together world-leading brands at discount prices in stunning surroundings.
The Outlet Village Pulkovo also boasts its own food hall, which combines a range of international cuisine under one roof. Last year it also became the first outlet to open a registration desk for Pulkovo Airport passengers. This unique service is helpful for tourists who want to maximise their shopping experience, and is a great example of diversifying to provide amenities above and beyond traditional stores.
There are also services for travellers such as a special loyalty programme. A further innovation is a snow-melting system, which makes shopping comfortable in the winter months.
The retail sector is changing rapidly, and many of the traditional concepts and models of retail will continue to be challenged by technology and e-commerce. In this dynamic environment, developers and retail brands alike must respond by future-proofing their retail spaces. This ability to adapt is intrinsic to our design of new retail schemes.
At Cherrywood, our focus on community, place and convenience will ensure the development is able to meet both the structural changes in retail and evolving customer and retailer preferences. Across all our retail developments, we actively work with retailers to offer an integrated and adaptable omni-channel experience for visitors.
The essence of our approach to retail remains our knowledge and experience of the retailer landscape in a patchwork of geographies across Europe, each with its own defining characteristics, where we can harness our international and local expertise. That, combined with our close relationship with leading retailers and brands and understanding of the need to create bespoke environments to help them showcase their products and engage with customers, is one of the keys to our success.
Applying these criteria to today’s evolving retail market will continue to provide investors with a wealth of opportunities across the sector’s broad and diverse asset classes.
Cordusio District, Milan
With the refurbishment of two prominent buildings, Hines has repositioned the former financial district of Milan, Piazza Cordusio, into a unique retail destination.
Located 200 metres from the Duomo, also close to Galleria Vittorio Emanuele and Castello Sforzesco, Palazzo Cordusio and Palazzo Orefici play a significant role in the retail development of this area, hosting the first Uniqlo flagship store in Italy; a Tommy Hilfiger digital store; Under Armour; Levi’s; and a Yamamay store with a Panino-Giusto café.
The leases reflect research of new brands, giving incentives to the most innovative projects especially co-branding (food and fashion) and “experiential” stores using digitalisation and cutting-edge technology.
Hines, along with the Municipality of Milan and other real estate players, will invest to revitalise Piazza Cordusio into a tree-lined, pedestrian square by 2022.
Outlet Village Pulkovo
In October 2015 Outlet Village Pulkovo became the first outlet village in St Petersburg. It’s an open-air shopping destination with picturesque squares and cozy streets, where world-famous brands offer their previous seasons’ collections with discounts from 30% to 70%.
In August 2018 the second phase was inaugurated, bringing almost 30 new stores to the customers, expanding shopping possibilities.
The unique architecture of small streets at Outlet Village Pulkovo is inspired by European cities and well-known St Petersburg-style elements. The architectural concept of the outlet village was based on the architecture of the modern era of the late 19th-early 20th centuries and facades were implemented in the Russian Baroque style of the 17-18th centuries.
The architectural dominant of the outlet is the central square with a dry fountain. In the facades of buildings, iconic objects of the city can be seen, such as the arch of the Generalny Shtab, Gostiny Dvor and Yusupov Palace.
Cherrywood brings experiential urban retail to Dublin
Cherrywood is the largest new sustainable greenfield urban development in Ireland. The 324 ha site will include a retail-led Town Centre of some 350,000 sq m, grade A offices, more than 8,000 new homes, six new schools, three major parks (the equivalent size of 91 football pitches), an extensive network of jogging and walking trails and a future population of 25,000 or more residents.
By integrating mixed-uses with sustainable transport infrastructure and connectivity, in a stunning south Dublin location between the Irish Sea and the Dublin Mountains, Cherrywood will redefine quality urban centre living in the capital, creating a sustainable community like nowhere else in Ireland.
Since acquiring the site with JV partner King Street, Hines has delivered 5.4km of new roads and 82 acres of parkland, ensuring that residents move into a ready-made and well considered community. When complete, Cherrywood will have approximately 8km of new roads and 16km of cycleways in place, with a priority placed on sustainable transport modes.
Cherrywood Town Centre, in the heart of the broader Cherrywood masterplan, is in Ireland’s wealthiest retail catchment area. The 67,000 sq m retail-led mixed-use scheme will be complemented by 1,300 new build-to-rent apartments, grade A offices and an extensive public realm with two new bridges designed by Sean Harrington.
Cherrywood Town Centre is also registered for WELL Community certification. The WELL Community Standard is a district-scale rating system centred exclusively on health and wellness and aims to set a new global benchmark for healthy communities. Now registered for this pioneering new building certification programme, Cherrywood Town Centre will help make this vision a reality.
This next-generation retail town centre model will have a forward-thinking mix of retail, F&B, leisure, entertainment and community uses with a strong emphasis on convenience, place and community – ensuring that it is well suited to meet structural retail industry change and evolving customer and retailer preferences in Ireland.
Positioned as a “streets & squares” scheme it will deliver the difference and authenticity that customers now prefer in their shopping experience.
When complete Cherrywood Town Centre will be the first large-scale retail scheme built in Dublin for almost 20 years.
Furthermore, the centre has good road and light rail access to draw customers from further afield to what will be a unique and compelling product mix focused on customer experience – day and night. Cherrywood will be Ireland’s future of retail with an unrivalled sense of place and authentic experience in the south Dublin community.
Article appeared in Living Retail on Mon 11 November 2019