Dietmar Reindl, COO of IMMOFINANZ. Credit: IMMOFINANZ
Development

“We Are Always Very, Very Consistent In Our Choice Of Locations”

In an interview with ACROSS, Dietmar Reindl, COO of IMMOFINANZ, talks about the Group’s retail property portfolio, why a uniform brand strategy is worth pursuing, and the criteria used to select new locations.

ACROSS: The IMMOFINANZ retail property portfolio has grown substantially over the last few years. What specific strategy are you pursuing?

Dietmar Reindl: We are primarily focused on our retail platform, which includes the STOP SHOP and VIVO! retail parks. This platform has experienced significant growth – we currently hold a total of more than 100 locations with a combined leasable area of over one million square meters in nine countries. Of that amount, 90 are STOP SHOPs, whose number has more than doubled in the last five years. This makes us the clear market leader in the European retail park business. Our retail concepts are based on decentralization, affordable products, and free market capacities. We are experts at conducting market research and identifying long-term trends. What I mean by that: In the repositioning of our portfolio over the last few years, we have intensively considered and taken into account future market developments and trends, including e-commerce, gastronomy, and entertainment, of course. Our retail formats work because we focus on small and medium-sized cities in Central and Eastern Europe, offer convenience and discount products, focus on quick access to the front doorstep and, of course, take the social component into account. Our formats serve as quasi “village square meeting points”. Last but not least, our locations are situated within the important “last mile to the customer”. In that respect, we are very well positioned in terms of our products, not only with regard to e-commerce, but also in the event of a weaker economic environment. After all, we are talking about everyday consumer goods, which are also bought during more difficult times.

ACROSS: Can you give us an example concerning market research?

Reindl: We did not simply create brands – we conducted brand analysis of each brand in advance, studying the individual brand drivers and customer structures. So, why do people shop at STOP SHOP and VIVO!? We have incorporated the results into the design of our products, and they are specifically reflected in the marketing process. Analysis has been carried out in all of the countries in which we operate, and we have acquired representative knowledge from each market, including dozens of data points, such as how often people go shopping, the amount of spending, what is particularly appreciated about the product range, what is lacking, etc.

IMMOFINANZ has centrally developed and marketed its VIVO! shopping center brand throughout Europe since 2017. That has resulted in substantial cost advantages. Credit: IMMOFINANZ

ACROSS: Why do people go to IMMOFINANZ retail parks?

Reindl: The key brand drivers in this regard are attractive offers, good accessibility, and a distinctive mix of retailers. This is then expressed in the wording on billboards, such as “Lost?We are just around the corner.”, which suggests accessibility, or “With us, your pockets won’t be empty.” The STOP SHOP “Easy shopping” claim has also been thoroughly tested in the market. Here is another example: In every country except Serbia, a customer’s initial contact with STOP SHOP usually happens by chance, as they are passing by. That may sound trivial, but it is extremely relevant when it comes to our marketing. As a result, we heavily rely on out-of-home marketing, in other words, billboards, rolling boards, city lights, etc. In Serbia, on the other hand, people become familiar with STOP SHOP through print media and television. Background: We invite national stars, such as well-known pop bands, to our openings, which can bring in more than 30,000 visitors on a single day as well as a lot of coverage. Therefore, what we promote is not accidental – a lot of expertise and work goes into it.

ACROSS: What about your shopping centers?

Reindl: Comprehensive brand analysis has also been carried out for VIVO! – for each individual location, including the strongest competitors. VIVO!, which, as we have discovered, is already the strongest brand at nearly all locations, scores points for family friendliness, is attractive to motorists, and personal recommendations also play an important role. On the basis of the brand drivers surveyed as well as the results, a multi-year program has been established for each of our VIVO! locations to address customer requirements, regardless of whether they involve additional green spaces in front of shopping centers, reading corners, or an expanded product range.

ACROSS: IMMOFINANZ now markets centrally instead of locally. What are the advantages?

Reindl: We have, indeed, centrally developed the marketing of our shopping centers since 2017, and we are also the only provider in Europe that advertises retail parks. As a result, we are not only able to ensure a uniform international presence and a high degree of recognition, but we also know that the right content is conveyed at all times in accordance with our brand analyses. Advertising concepts are developed at the Vienna headquarters and are subsequently used for advertising in all countries. We also rely on thoroughly amusing characters who create a need that is then resolved via the wording. This can be seen, for example, in our current STOP SHOP advertisement: “I’m going into town now to buy something for a sore throat. Shoes or something.”

Of course, central marketing also offers significant cost advantages. For example, three VIVO! campaigns can be financed for 90,000 euros. From the perspective of an individual shopping center, such campaign costs are very reasonable at approximately 3,000 euros per campaign – and the quality and international production standards are higher than a single shopping center could ever afford. At this level of quality, the savings for an individual shopping center amount to an impressive 90%.

ACROSS: What does the decision-making process for new locations look like?

Reindl: We are always very, very consistent in our choice of locations. We would rather not do a project than do a mediocre or bad one. A good example of this can be found in our VIVO! Shopping centers in Poland which have been very successful in recent years. In addition, not only do we carry out a comprehensive market analysis before we proceed, but we also engage an intensive exchange of information with our tenants. Those activities complement each other very well.

We pay close attention to the tenant mix, to the brands that we place within our retail properties, and to the combination of brands with each other. That is an important success factor in our long-standing partnerships with the most important retailers in Europe. Consequently, that is also reflected in customer sales.

Thanks to our positioning in the convenience segment as well as the high degree of standardization of our properties, we can also offer very attractive leasing and operating costs. That, in turn, enables retailers to tap additional market capacities that offer high space productivity and serves as an additional advantage should more economically challenging times arise. Rental rates at our properties remain affordable even under such circumstances.

Our figures support our strategy: Our STOP SHOPs and VIVO!s are fully leased, and the sales growth of retailers at our retail properties is up to roughly 40 percent higher than the total market in these countries. Our visitor numbers also speak for themselves: We surpassed the 150 million mark in 2019, which is a tremendous success. By comparison, this is roughly equivalent to the combined populations of Austria, Germany, Poland, and Romania. On the whole, I expect a continued significant increase in the number of visitors to our retail properties in 2020.

ACROSS: What are the growth plans for the current year?

Reindl: The growth of our STOP SHOP brand to around 100 locations in Europe will continue to progress rapidly, and we will likely enter the market in another country. Our STOP SHOP in the Polish town of Siedlce will see us open the largest retail park in Poland, comprising more than 14,000 m², in spring. Following the highly successful refurbishment of two of our 10 VIVO! shopping centers in Bratislava and Cluj last year, our VIVO! Baia Mare location in Romania is also set to shine in new splendor this year. Furthermore, we are not averse to the odd acquisition in the VIVO! segment if an attractive addition to our portfolio becomes available.

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