Amsterdam, 16 November 2017

Six months after starting as Multi CEO, Josip Kardun can certainly look back on a very busy period. He explains how he is sees Multi as a pan-European Service Platform, and shares his enthusiasm about the multi-faceted nature of Multi’s operations. And of course the recent expansion of its third-party shopping centre management business.

“I see Multi as a holistic, vertically integrated service machine in all kinds of European retail real estate. And I believe there’s plenty of room for that. And the third-party management services are mostly aligned with what we are already doing: mall management, leasing, marketing, redevelopment and asset management. We are obviously entrusted to manage the assets of our shareholder Blackstone, and we are now accelerating the roll-out of these services to third parties. Because we are not listed, we are extremely flexible. We already do this for major investors like Allianz, Commerz Real, Union Investment, Greenbay and others.”

Kardun sums up the many advantages of the Multi strategy. “It keeps us swift and agile. It helps to retain talent, gives us market intelligence and a bigger footprint with retailers. They don’t care who owns a shopping centre, but they are interested in who is managing the scheme. We are very good at what we do and we want to be the best mall management service platform in Europe.”

Third-party management
Multi regularly retains the third-party management for the retail assets that Blackstone sells. But perhaps even more exciting is the acquisition in early October of the management contract for a very large shopping centre in the CEE region.

“This adds more than €300 million to our portfolio in one asset.” Multi’s goal is to take over the third-party management of three or four shopping centres a year. Kardun: “There are not many pan-European service platforms that can do that. Our main goal is to be one of the leading European mall management platforms, but we have all the expertise we need to offer asset management services. We can explore your asset, manage it and propose improvements.”

Extensive extensions and development programme
This claim is backed up by Multi’s € 1.4 billion portfolio for extension and development, the biggest building and redevelopment pipeline since the start of this decade. Construction of inner city mixed use centre Forum Rotterdam has just started and shopping centre Forum Gdansk is set to open mid 2018. Work is currently underway on Blanchardstown in Dublin and Alfa Centre in Riga, while the refurbishment of St. Enoch in Glasgow was completed this spring. All extensions are built on tested ground where Multi already runs a successful shopping centre on a dominant location where there is a really good demand from retailers for space.

Blanchardstown Centre, Dublin

Kardun explains why physical space matters in retail despite e-commerce being the fastest growing retail market ever: “The reality is that when you get strong in online you also need visibility offline. The winners in retail are not just the ones that are online but the ones that offer both experiences. Shopping centres play a role in the clicks and bricks strategy of the retailers and brands, as a kind of brand building rooms to boost sales online and offline.” Also centres are playing an increasingly dominant role as drop-off and collection points and as meeting point.

Kardun: “We are upgrading and expanding food courts everywhere. A varied Food & Beverage offer is one of the many elements that build up the shopper’s dwelling time in a shopping centre. People use modern technologies, they are online, using social media, read newspapers, have a coffee here, and they eat something there or they meet with other people. Gastronomy now has a share of more than 10% in shopping centres, almost double what it was just a few years ago. It is where the customers like to spend their time.”

Multi in transition
Multi is a company in transition from developer to service platform. Kardun has experienced a similar process in the past, in his job at ECE. Kardun: “The good old pioneer days of developing shopping centres and selling them in a forward sale to investors are over. Running around in new countries and enlarging your market share is irrelevant today. Today’s focus is on metropolitan areas. Companies have to change with the times.” Kardun appears to be a pragmatic person who is practical and results oriented. He describes his own leadership as very straight. “I am familiar with every aspect of this business, but I still learn something new every day. I know how to challenge my people, but in the end it is always a team effort”.

Kardun’s view on shopping centre design is also pragmatic. “First and foremost, a shopping centre has to be functional. It has to work first, then we make it as nice as possible. And you have to stay involved in the management of an asset, because you need a running portfolio. If you are just a developer, you have less leverage with retailers, and when a crisis hits you lack the income of a stable business.” Innovation is very important in the shopping centre business, but Kardun has experienced that often in-house innovation labs are not delivering on their promise. He believes there is state of the art know-how available from experts with top-notch knowledge in the retail innovation. Multi’s attitude is to be open minded and pick up the innovations that will get their operations a better result and better quality of services.

Cradle of know-how
The Multi organisation will be more centralised in the Amsterdam head office. “We are professionals, running a multinational with corporate processes. We are establishing a lot of key account functions at our HQ and strengthening our retail operations by bringing in top class people, who act as mentors for our young people. This is how we retain and accumulate knowledge. I see the HQ as our cradle of know-how, a support base for our people.” The centralisation aims to create more unity in the structure and improve the management of the portfolio. It will also give Multi more leverage for its clients. Although much of the leasing is done locally, Multi deals with the largest retailers on a corporate level. Although Kardun acknowledges Multi’s Dutch roots, he does not see Multi as Dutch company. “Our business is pan-European, and that includes the Dutch market.”

Forum Gdansk, Gdansk

Adding tangible value for people
Kardun believes a manager has a fiduciary responsibility to achieve the best possible balance for the company, for the shareholder, and for investors. “In this respect it is interesting to realize where the money for our business really comes from,” says Kardun. “It’s not just from Blackstone, or a bank, or some billionaires. Most of the money comes from life insurance or pension investments of people like you or me. So if our business is doing well, we are creating real value that pays the pensions of people all over the world.”

Kardun says this touches the essence. “This is not a balance sheet operation where you create imaginary money. At Multi, with every project that works we realize concrete value and palpable return.”

The drivers of the process
For Kardun, the service business goes way beyond asset management. “When you own an asset it’s a capital market business. You sit on the asset and manage it. But when you are a service machine, like Multi, you’re involved in the financing, adding extensions, leasing, you’re in contact with the owners, trying to win new business.” Shareholder Blackstone uses Multi’s extensive retail knowledge, for example in the recent acquisition of Finnish real estate investment company Sponda. “We work closely with Blackstone, looking at new acquisition or disposal opportunities and we advise them on the retail real estate side,” explains Kardun, “We strategize with them. These processes raise hundreds of questions and Multi teams provide the answers. This makes the service business very vibrant because you are not driving all the processes. The processes are driving you.”

Blackstone are known for their ‘buy, fix, and sell’ strategy and Kardun sees this as a big advantage for the assets. “They are very willing to invest because they have a disposal horizon. And they’d rather spend more now, immediately, to upgrade assets and achieve their goals more quickly.” Kardun sees that as a major advantage for Multi. “Everything that is invested makes us better, because it has to be done and it gives us the experience we need. Service is not just about facility management, the maintenance and the marketing. We are heavily involved in Capex investments across our portfolio. For example, we are investing € 6 million in shopping centre León, Spain, and we’re doing this in lots of projects.” The expertise to deal with all this Kardun sees as the essence of Multi’s business. “I firmly believe that relevance comes from competence and that should be our approach. The owner must be sure his assets are in good hands with Multi, and I think we are pretty much there right now.”


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