Multi boss on the firm’s return to UK retail

Making a comeback is hard. People will always remember your failures just a little bit more vividly than some of the wins you may have had. So if you want to make a proper comeback, you’ve got to be prepared. And that is exactly what Elmar Schoonbrood is doing as he and his partner Steven Poelman prepare to make Netherlands-based Multi Corporation a big deal in the UK again. Multi was one of a number of retail businesses that got burnt in the UK in the 2000s as the market went from hero to zero. Companies that had promised big growth, billions of pounds of investment and millions of square feet of development were suddenly finding it hard – if not impossible – to operate. Multi Development – the UK arm of Multi Corporation – was one of those firms. After building up an impressive portfolio in the UK, with assets in Stratford, Wolverhampton, Glasgow and Ireland, the firm was forced to rapidly downsize in the UK before exiting completely. The parent company, formed in the mid-1980s, was swallowed by Blackstone in 2013 and managed under its strict hand until 2022, when Schoonbrood and Poelman saw an opportunity to grow the business and make it one of Europe’s largest independent managers. Since the MBO, the co-chief executives have set about rebuilding the business, opening in new locations including Switzerland, France and Denmark and, earlier this year, making a bold return to the UK. Multi now totals some 600 people across 15 jurisdictions with some €5.5bn (£4.6bn) of assets under management. Brains versus bravery Some may say the comeback is a brave move, especially with the recent wave of consolidation in the retail property world, but for Schoonbrood it’s not about bravery. It’s about brains. It’s about understanding your customer, understanding the market and having the empirical data to back it up. The return to the UK has come through the acquisition of a majority stake in UK outlets specialist Realm. Realm was founded in 2001 and is co-owned by managing director Dan Mason and leasing director Christine Grace. Now, Multi-Realm, as the UK business is known, is planning to take the lessons learnt from the outlets world and expand them into shopping centres, all as part of a quest to become one of the best managers of property across Europe. “If we look at the UK, we just see a lot more opportunities in the retail sector than we might see on the Continent,” says Schoonbrood, explaining the company’s return. “There is generally more supply of retail per inhabitant in the UK compared with some countries on the Continent and that oversupply leads to potentially more distress. I also think that valuations have probably come down a little bit more in the UK market compared with continental Europe.” Schoonbrood talks of “50 shades of retail”, explaining how he sees pockets of positivity in the retail sector and how he believes a data-driven and tenant-focused approach can maximise value for both Multi and its client base. [caption id="attachment_1247465" align="aligncenter" width="847"] Cotswolds Designer Outlet[/caption] “From a management perspective, things are done a little differently in the UK compared with how we would typically manage on the Continent, where we are much more hands-on. Multi does basic property management, asset management, leasing, but also development management, sourcing acquisitions and underwriting. We’re literally a one-stop shop,” he says. “Where we see a huge potential in the UK is in the way that we deal with our tenants and the leasing strategy. On the Continent we go directly to our tenants to lease our units. We have a very good relationship with Inditex group, for example, with whom we have 125 stores across Europe, so it is fairly easy to pick up the phone and see if they are interested in a particular asset that we manage.” “We receive turnover data for all our brands every day and feed in all the other KPIs, from footfall to conversion, to even the weather. We see that use of data of being something we can use as a blueprint to follow [in shopping centres]”  Schoonbrood wants to be able to replicate that level of partnership with tenants here in the UK and believes the deal with Realm enables that. Realm’s Mason, of course, agrees. “The type of management undertaken in outlets is very active, perhaps more active than shopping centres, and it struck me that we had this skill set and depth of knowledge of retail from the turnover lease model in outlets that should be applicable and could be expanded into full-price shopping centres. “If you can operate an outlet, then you can certainly take on shopping centres and retail parks,” he adds. From outlet to shopping centre The pair believe they can take the skills they have acquired from turnover-based operations in both Europe and the UK outlets centre and bring that to full-service shopping centres. “The retail sector is something we want to expand into,” says Schoonbrood. “That’s where we used to be active as Multi before. On the dominant shopping centres, that is where the connection with retailers is going to be really important.” “We see a point of difference for our business in the use of data and the learnings we have taken from our outlets,” says Mason. “We receive turnover data for all our brands every day and feed in all the other KPIs, from footfall to conversion, to even the weather. We see that use of data of being something we can use as a blueprint to follow [in shopping centres],” says Mason. “To have that granular understanding of how a tenant trades – not just looking at their P&L – but actually to know exactly how a unit is trading is really important.” Schoonbrood believes it is important enough to invest a sizeable amount of the Multi business in. He has established a large in-house proptech team at Multi, with some 20 specialists working on developing proprietary software that he believes will give the business the upper hand when it comes to winning mandates and delivering growth for both tenants and its clients. Data-driven decisions “At the moment, I think a lot of people are doing this on gut feeling and experience but without empirical data,” says Schoonbrood. “But I want to focus heavily on the data to make asset management and leasing decisions and investment decisions. Coming out of a private equity background, I know this is how a lot of our clients think.” He adds: “I am a strong believer that understanding your customer is absolutely fundamental in order to help your retailer, to become a better asset manager, to make better leasing decisions and, ultimately, to help you with a sale.” [caption id="attachment_1247467" align="aligncenter" width="847"] Lakeside Village, Doncaster[/caption] While Schoonbrood and Mason clearly have the expertise and experience of running retail businesses and mandates for a number of years, both see how utilising data will be key when it comes to crystallising the company’s ambitions. By understanding how businesses trade, how customers utilise spaces and what their buying patterns are, both believe retail can rise again and be a truly valuable asset class. “We want to be Europe’s best retail management specialist,” says Schoonbrood. “We want to drive value for our client – the investor – using data to our advantage. We have a competitive advantage at the moment because of the way we do leasing in Europe and the UK, because of the connections that we have with tenants and because of the data projects that we are implementing and, finally, because we are fully integrated, including development management. “Blackstone helped us by setting up a great foundation for the business,” he adds, paying homage to his almost decade-long stint at the private equity giant. “But in five years I want to be able to say we are hands down the best retail specialist in Europe.” And, clearly, have the data to back it up. Images © Tom Campbell; Multi-Realm