Antoine Frey, Chairman and Chief Executive Officer of FREY, summarized the results of 2024:
“2024 was a particularly active year for FREY and enabled it to take major strategic strides towards our goal, which is to be the leading operator of open-air shopping centers in Europe. The 2024 results confirm that our retail offering in a segment pioneered by FREY is a shrewd one, enabling us to further improve our various metrics. Other highlights this year included the first achievements stemming from our outlet investment policy (ROS, development project in Malmö) and an increase in our financial resources, which will enable FREY to pursue its growth trajectory in 2025. A prime example of the Group’s ambitious trajectory is the major acquisition of the Designer Outlet in Berlin secured in February 2025 for 230 million Euro.”
Highlights of 2024: 100% growth-centric initiatives
FREY is expanding into a market that is fragmented within Europe: outlets, also referred to as designer outlets or factory outlets. These open-air shopping centers are structured around major brands looking to reduce their inventories of high-quality products at low prices. In Europe, they are expected to enjoy +9% annual revenue growth out to 2026 (source Kenn Gunn Consulting).
FREY acquired Retail Outlet Shopping (ROS) in July 2024. The Austrian third-party operator ROS manages 13 outlet shopping destinations across 8 different European countries, representing 235,000 sq m and receiving 17 million visitors each year (for assets in operation). ROS is very much a services platform, offering an extensive range of expertise that covers the full spectrum of outlet development and outlet management activities including finance sourcing and arrangement, works project management, asset and property management, center management, leasing and marketing.
FREY also signed an agreement in 2024 to acquire Malmö Designer Village in Sweden, a development project of which the first tranche represents an investment of around 100 million Euros with a yield of more than 8%, scheduled for delivery in the first half of 2027.
FREY made further progress on its growth strategy by announcing at its 2024 earnings presentation that it had signed a firm commitment to acquire Designer Outlet Berlin for 230 million Euros, generating operating profit of 18.1 million Euros. This outlet is located to the west of Berlin and has a primary catchment area of 4.5 million inhabitants (living within a one-hour drive by car) with considerable purchasing power. The outlet’s main brands include Ralph Lauren, Adidas, Tommy Hilfiger, Hugo Boss, Rituals and Levi’s. Management of this asset will benefit from the expertise of ROS’s staff already operating in Germany and from the Berlin city area’s vibrant economy.
550 million Euros of new financing raised
FREY raised 550 million Euros of new financing during the course of 2024, enabling it to extend its debt maturity (4.7 years at end-2024 vs. 4.0 years at end-2023) and diversify its sources of funding. For instance, FREY set up a corporate financing deal in November 2024 worth 100 million Euros at a fixed rate and with a 10-year maturity. The deal was arranged by Natixis and fully subscribed by a major insurance company based in the United Kingdom.
The total cost of these new financing arrangements is in line with that of other such arrangements made within the past 24 months. Thanks to these new funds and the hedges that are in place, FREY’s average cost of debt is competitive at 2.66% and its debt is 95% hedged; it is therefore poised to continue rolling out its strategy.
FREY pursues its asset rotation policy
FREY’s asset disposals totalled 224 million Euros in 2024 as part of its strategy aimed at focusing on the largest open-air shopping centers in its portfolio. Having realized or secured a number of unit disposals in the amount of 55 million Euros in the first half of the year, FREY then agreed in late December to sell a 169-million-euro portfolio to Batipart Europe under a long-term partnership. FREY continues to manage this portfolio consisting of 4 retail parks located in Arles (Shopping Promenade Arles), Douai (Parc du Luc), Reims (Time Square) and Terville (Supergreen) under a joint venture that is 66.7%-owned by Batipart Europe and 33.3% by FREY.
2024 Operating performances: A very busy year
Shrewdly positioned in open-air retail destinations, footfall in FREY’s centers was +3.5% higher in 2024 than in 2023. Tenant revenues in FREY’s centers increased by +2.8% in 2024, while the occupancy cost ratio remained low at 9%. A breakdown of tenant revenue growth by country shows that FREY’s centers in the Iberian Peninsula delivered excellent performances, with their annual growth reaching +4.4%. For the France scope specifically, footfall in FREY’s centers was +2.5% higher, thus greatly outperforming the 2024 indicator established by FACT (Fédération des Acteurs de Commerce) which stood at +1.1%. Tenant revenues increased by +2.1%, compared with +1.3% in 2024 for FACT’s France benchmark.
Strong rental activity
FREY signed 173 leases in 2024, corresponding to a group share rental income of €17.4 million (vs. 14.1 million Euros in 2023). The average uplift on renewals and relettings came to +3.5% and broke down into +6.4% for relettings and +2.6% for renewals. These data factor in the repositioning of Shopping Promenade Riviera with a mix leaning more towards local brands and restaurants. Such strong rental activity in 2024 made it possible to perfectly scale each center’s offering to consumer demand. Healthy rental activity kept the EPRA occupancy rate high at 97.5% at end-2024.
Outlook
FREY’s property positioning in open-air retail assets and its integrated management business model should enable it to deliver resilient organic growth thanks to its low occupancy cost ratio and the promising markets in which it operates. FREY will continue to rotate its assets and focus on the largest centers in its portfolio, which should also help it to generate solid organic growth. The total development pipeline at 31 December 2024 was worth 628 million Euro and will spur the Group’s medium- and long-term growth. Two major deliveries are scheduled for the first half of 2027 (Malmö and Lleida) and could generate net rental income of more than 20 million Euro (for a total cost of around 240 million Euro) as well as substantial value creation.
Last of all, the large-scale acquisition of Designer Outlet Berlin for 230 million Euro will have a positive impact in 2025 and is a perfect example of the deployment of FREY’s strategy, which is aimed at becoming Europe’s leading operator of open-air shopping destinations (retail parks, shopping centers and outlets).
