FREY acquires ROS, The 4th Largest Outlet Operator In Europe

FREY, already one of Europe’s top developers, owners, and managers of large-scale retail parks and open-air shopping centers, is further accelerating its growth with two strategic operations. Strengthening its position as Europe’s leading player in open-air shopping destinations, FREY now boasts 31 operational sites across nine European countries, with a portfolio valued at over 3 billion euros.

Antoine Frey, Chairman and Chief Executive Officer of FREY, made the following statement:
“We are delighted to announce a major strategic operation for FREY. The signature of the binding acquisition agreement of ROS, Europe’s 4th-largest outlet operator, will not only give us access to a very high-performing asset class but also offer us vastly diversified geographic exposure. ROS is a fabulous company led by some of the outlet market’s most talented individuals and has successfully risen to the very top of the league in Europe. FREY’s strategy will focus on stepping up ROS’ position in third-party management but also on tapping into its experience and reputation in order to build up a portfolio that is dedicated specifically to outlets by acquiring or developing assets. The first example of this strategy is the recently launched operation to develop the Malmö Designer Village. FREY now boasts over 31 open-air shopping destinations in operation across 9 European countries and is thus consolidating its leading position in the retail asset classes that are most sought after by consumers, chains, brands and investors alike”.

Both operations focus on outlets, a format of open-air shopping centers that FREY previously did not include in its portfolio. These centers, also known as designer outlets, attract both consumers and retail chains for several reasons. For consumers, outlets offer excellent value for money, an upscale shopping experience, and enhance the pleasure of shopping, with their catchment areas extending beyond those of traditional shopping centers. For brand partners, these locations provide opportunities to expand their client base and strengthen their brand positioning. Financially, outlets deliver high sales per square meter and low Occupancy Cost Ratios (OCRs) for brand partners, while also generating higher margins than traditional shopping formats. This is achieved by clearing out previous year collections and overstocks, with lower operating expenses compared to high street locations. A study by specialist consultancy Ken Gunn Consulting indicates that Europe’s outlets should see average annual sales growth of 9% from 2023 to 2026.

FREY and ROS share the same views on developing an approach to retailing that is responsible and engaged; such an approach can enhance both the client’s experience and the retailer’s performance.

This shared DNA will generate sizeable industrial and commercial synergies:

• New greenfield and brownfield projects can be developed by combining FREY’s expertise in development and financing arrangement with the close partnerships that ROS maintains with all the brand partners in its outlets

• ROS’ marketing clout will improve FREY’s ability to tap into the very essence of the catchment areas surrounding its assets

• Last of all, the two groups’ tenant portfolios are highly complementary, which means that they will be able to enrich and enhance the merchandising mix offered by the assets they own and manage.

GROWTH

As an asset class, designer outlets remain something of a niche as there are only 210 such assets in Europe and their ownership is still very fragmented. The strategic objective is two-fold: to build up ROS’ third-party management activity in a drive to expand its coverage across Europe, and to create a real estate investment platform that is geared specifically to outlets. This platform will be populated with acquisitions of existing assets, greenfield developments as well as projects to transform existing traditional retail assets into outlets. ROS’ expertise will enable it to source such opportunities, assess their suitability and work alongside FREY to develop these projects. All assets acquired or developed in this manner will subsequently be managed by ROS.

A EUROPE-WIDE, MISSION-DRIVEN COMPANY

FREY was the real estate industry’s first firm to obtain B Corp certification and become a mission-driven company. FREY’s decision to restore retail as a service for the common good began to take shape back in 2021 in the form of a large-scale effort to transform the way it operates, the aim being to factor its mission into each and every one of its choices. ROS’ entire staff fully adheres to these values. FREY is therefore going to take the very same processes that have inspired its mission for 3 years now and apply them across ROS’ entire business chain; its continuous improvement approach geared towards positive impact will thus be able to take on a European dimension.