10 years of commitment

10 years of commitment to...

Active management

José Luis del Valle
CEO Commercial Real Estate Iberia Grupo Lar,
responsible for the Lar España portfolio

Lar Group drove the creation of Lar Spain at a crucial moment, that of the beginning of the Spanish economy’s recovery after the major crisis of 2008. We understood that it was a unique opportunity from both the real estate and financial perspectives.

The group’s experience and knowledge allowed us to develop a strategy that has been very successful during the first ten years of Lar Spain’s existence. We focused on various types of assets that shared a common characteristic, being relevant or even unique in their segment and location. Dominant and resilient shopping centers with improvement potential, logistics in prime locations, and Lagasca 99 as a unique project that was largely a flagship in the early years of our socimi’s journey. The group’s professional platform enabled us to access the best products, select them one by one, and execute investments in the best and safest conditions.

In addition to being Lar Spain’s manager, Grupo Lar is also one of the main shareholders, demonstrating full alignment of interests with other shareholders by linking their management fees to the socimi’s results.

We have implemented a proactive management model based on reading changes in retail trends, such as the entry of online commerce and the response of retailers, who have not only adapted to this significant change but also lead it, demonstrating that the future of the sector is omnichannelity; that is, total service across all channels under the same strategy of quality, price, and service.

We have repositioned our assets by deeply analyzing customer needs and preferences, making investments in capital expenditures that create value, increase foot traffic, sales, and rents, and are not just a facelift.

Alignment with retailers has been fundamental; we have facilitated the implementation of their new formulas and formats. We maintain a permanent and fluid mutual relationship. We collaborate with them, and they are the driving force behind our assets.

To implement this strategy, Lar Spain signed a framework contract for asset management and commercialization of shopping centers and parks with Grupo Lar through Gentalia. More than a hundred experienced professionals work every day on improving the centers and in commercialization, asset management, technical and energy consultancy. Allow me to emphasize the real estate management team; over 50 people who oversee the day-to-day operations of each center and park, complex assets where over a thousand merchants converge and receive over ninety million customer visits annually.

Our centers and parks are key entities for the economy, commerce, employment, services, investments, and, ultimately, the society of the cities where we are present. The impact of our industry is crucial in the world of commerce, where shopping centers have an approximate market share of over 18%, and also in society: we create highly active entities in all kinds of social, cultural, and festive activities that take place where we are.

The status of being a socimi and, at the same time, having a reference management partner in real estate management and promotion has made Lar Spain a success story. It is based on knowledge, innovation, and well-done work. The management model has been transformative, and our results speak for themselves, surpassing the sector in key performance indicators since the company’s foundation.

The commercial real estate sector is in very good health. It has faced and overcome major challenges such as the transformational shift to online commerce, the tremendous pandemic, or the significant increase in energy costs and results. Customers choose us, continue to visit our centers, and demonstrate that their selection criteria are considered, providing them with the best for each moment and type of purchase.

Online and physical are not only compatible but also mutually necessary. Major retailers are strong online, and e-tailers are opening stores worldwide. The shopping experience is the new standard. However, the “experience effect” is not created spontaneously. Meeting customer expectations is not easy; sophisticated and efficient management is required day after day.

The boom in dining is a great attraction for customers to come to our centers. Technology is at our fingertips, but you must be able to anticipate what you need from it at each moment and how to offer it well to customers. Having the highest standards in ESG has also brought us closer to customers, as well as investors or financial institutions. Our effort to reduce our consumption and use only renewable energy. Our commitment to the community. Knowing that Lar Spain is an example of governance, transparency, and solvency. All these aspects consolidate the trust of merchants and customers in us.

Vision and Results

The strategy we designed in 2014 remains essentially valid ten years later. We find ourselves once again in a real estate and financial opportunity, in a consolidated commercial context.

We are leaders and have a strong presence in the market. We will be able to select the best assets at prices according to the market situation. We will develop individualized strategies to create the greatest value for our shareholders. Among the more than five hundred Spanish shopping centers and parks, fewer than a hundred are genuinely prime. Only they have the best commercial mix, over 40,000 square meters, an occupancy rate of over 90%, and over 4 million visits per year. Lar Spain’s shopping centers and parks are in this select group. In general, we are clear that the best will always succeed, even in this ultra-competitive world.

To continue this trajectory, we start from a very strong base, a proven management technology, and a track record of excellent investments and asset sales, where we have always achieved excellent margins. We add to it an expert, reliable, and relevant team in our industry. We are confident that the next ten years will be even better than the first ten.