Lidl Seeks RE Partners To Drive Growth

20 October 2016 – Expansión

Lidl is changing its expansion policy. Until now, the German chain has focused on opening supermarkets on the outskirts of urban centres. However, its new strategy will focus on identifying real estate partners to construct complexes that combine commercial and residential areas.

“We are looking for partners with whom, for example, we can open a shopping centre on the ground floor and construct apartments on the floors above”, explained David Carim, Director of Expansion at Lidl. The supermarket chain has a stand at the Barcelona Meeting Point real estate fair, which is being held from 19-23 October in the Catalan capital, to promote its strategy and look for new partners.

In this sense, the company is also offering itself as a partner to companies and funds that have unused plots of land, to develop projects together. It has not completed any of these initiatives in the Spanish market yet, but the strategy has already been applied in four shopping centres that the company manages in London. The formula will allow it to unify costs with the partners and access areas right in the heart of city centres.

Above all, Lidl is interested in plots of land measuring between 4,000 m2 and 9,000 m2, on which to build centres with a minimum surface area of 1,100 m2. The company is also looking for ground floor premises in towns with at least 16,000 inhabitants.

In addition, it is expected that this new expansion strategy will be applied to the construction of logistics centres, on plots of land measuring between 120,000 m2 and 140,000 m2.

Six hundred stores

Using this formula, the company plans to have 600 stores in less than five yers. The German chain already manages 535 supermarkets. In 2016 so far, Lidl has spent €350 million opening several new centres in Cornellà, Ripollet, Blanes, Sant Feliu and Roses (Cataluña), amongst others. The company plans to open another two new supermarkets in Badalona and Sant Boi, also in Cataluña, before February.

Lidl is not planning to create a real estate subsidiary even though it is looking to divest several of the premises and plots of land that it owns. Its owned assets include a plot of land measuring 65,815 m2 in Sant Fruitòs de Bages (Cataluña) and a 3,011 m2 farmhouse in the Catalan town of Arenys de Mar.

Lidl, which has invested €1,000 million in Spain over the last six years, is also focusing on redesigning its shopping centres. The paradigm of this new space is its centre in Ripollete, very close to the company’s central headquarters in Montcada i Reixach. The new supermarkets are characterised by their large windows, the installation of photovoltaic panels, which generate 30% of the stores’ energy, and the installation of bakeries in every supermarket.

Original story: Expansión (by Eric Galián)

Translation: Carmel Drake