Investors lose interest in Italy's malls as Sunday shopping curbs loom

Sasseur Real Estate Investment Trust

19/02/2019 11:53

* Planned Sunday shopping curbs undermine property deals
    * Sundays are especially lucrative for shopping malls
    * Lawmaker says scope to review planned measures

    By Francesca Landini and Giuseppe Fonte
    MILAN/ROME, Feb 19 (Reuters) - Three deals to sell shopping
malls in Italy have been scrapped or put on hold as a plan by
the coalition to restrict Sunday trading raises questions about
the value of the properties involved, three sources close to the
matter said.
    Chinese mall operator Sasseur  SASS.SI  walked away from
preliminary talks with Blackstone Group  BX.N  over the
acquisition of a portfolio of Italian outlets worth more than
800 million euros ($905 million), two of the sources said.
    Two other deals, worth more than 200 million euros each,
have also been put on ice due to the proposal, which has
compounded investor fears about a possible recession in Italy
and a bleak outlook for fashion retailers.  urn:newsml:reuters.com:*:nL8N1YN4VB 
    Talks between Nuveen, the investment manager of U.S.
financial services firm TIAA, and German asset manager DWS
 DWSG.DE  about the sale of an outlet near Florence are
"dragging on because of the Sunday shopping ban," said one of
the sources.
    Nuveen, which owns the property, may have to lower the
asking price or shelve the sale, the source added. Meanwhile the
planned disposal of a retail portfolio held by Italian
entrepreneur Antonio Percassi has been delayed, the source said.
    Sasseur did not respond to a request for comment.
Blackstone, DWS, Nuveen and Percassi declined to comment.
    "Several big acquisitions of shopping centres and outlets
based in Italy that were expected to close by the end of last
year were blocked," said Silvia Rovere, head of Assoimmobiliare,
Italy's association of real estate companies.
    
    CLOSED ON SUNDAY?
    A draft bill championed by Italy's ruling coalition would
force shopping malls, outlets and supermarkets outside city
centres to shut 26 Sundays a year. The bill also limits the
public holiday openings to four out of 12.
    Tourist areas would be exempted from the rules, which are
being debated in parliament and could still be modified or even
shelved. 
    The aim of the coalition is to protect small shopkeepers,
who say a 2011 law that liberalised Sunday trade should change. 
    "The liberalisation only shifted sales away from small
shops, forcing many to close. Now we need to correct this
competition bias," said Mauro Bussoni, head of Confesercenti,
which represents small retail businesses in Italy.
    Experts say Sunday shopping accounted for 10 percent of food
sales and 15 percent of non-food items for Italian shops. 
    For outlets, however, Sunday sales could be worth as much as
30 percent of the total making them the most vulnerable.
    Davide Dalmiglio, head of capital markets for Jones Lang
LaSalle in Italy estimated a fall of around 10 percent in the
value of retail real estate properties due to the uncertainty.
    The expectation of a Sunday shopping ban last year halted 
the sale of Italy's Old Wild West restaurant chain, which has a
number of sites inside shopping malls.  urn:newsml:reuters.com:*:nL8N1WX6JD
    
    POLISH EXAMPLE
    Italy's plan mirrors shopping curbs for big retailers that
were introduced in Poland early last year. 
    In a country where the economy grew 5 percent in the first
three quarters of last year the Sunday ban lead to flat sales at
hypermarkets, while discounters posted healthy sales thanks to
promotions on weekdays, a report by research firm Nielsen
showed.
    Polish Prime Minister Mateusz Morawiecki this month said the
government was reviewing the law, as discontent with the
shopping ban was growing among citizens.
    In Italy bigger retailers warned of a hit to sales when the
economy risks slipping into a prolonged recession after
shrinking for two consecutive quarters last year. 
    "It would be an absurd return to the Middle Age," said
Giorgio Santambrogio, CEO of supermarket chain Gruppo VeGe. 
    League lawmaker Andrea Dara, who drafted the bill, said the
ruling coalition should not be blamed for scaring off foreign
investors.
    "The political debate over a shopping ban started under the
previous government and has been going on for the past four
years, so it is not fair to say that uncertainty was triggered
by our proposal," Dara told Reuters.
    "The proposal we have presented is not written in stone, it
can be amended, improved with the suggestions that will come
from business groups and political parties," he said.
($1 = 0.8844 euros)

 (Additional reporting by Alicja Ptak in Warsaw, Dominque
Vidalon in Paris, Emma Thomasson in Berlin, Maria Pia Quaglia in
Milan
Editing by Keith Weir)
 ((francesca.landini@thomsonreuters.com; +39 02 66129437;
Reuters Messaging: reutersitaly.thomsonreuters@reuters.net))