Retail market Germany

EXECUTIVE SUMMARY
 

2019: A YEAR FULL OF NEW TRENDS ON THE RETAIL RENTAL MARKET

The years 2016 to 2018 were visibly marked by the transformation of the retail landscape, the changes and the lessons learned by the key players during this period are clearly reflected in the letting activity of the last twelve months. Accordingly, the number of registered lettings and openings in city centre locations, which has been falling year on year since 2014, is now showing an upturn again for the first time compared with the previous year – and that by 13 %. With a total of around 1,300 leases concluded for a take-up of 625,000 m², the result is not only impressive compared with 2018 (1,140), but also with 2016 (1,360) and 2017 (1,310), with only an insignificant higher number of contracts. 

A LOT GOING ON IN THE TOP MARKETS, FOCUS ON B-CITIES

• At the A-locations, as in Germany, neither the food service nor the textile industry emerged as the industry leader, as here too both groups accounted for 23 % of the lettings and openings. 
• In summary, the seven top markets across all sectors have an average of 50 leases / openings with a take-up of over 19,000 m².
• Another important trend that emerged in 2019 is taking place at B locations. Viewed over the long-term since 2013, only in 2016 was a comparable number of lettings and openings recorded here as in 2019.

TENANTS AND LANDLORDS INCREASINGLY COMING TOGETHER

• In contractual discussions both parties have now moved closer together in order to reach agreements and thus establishing the basic prerequisite for a new lease or an extension of the contract. 
• If the landlord is prepared to accommodate tenant wishes, this also increases the tenant’s willingness to compromise and, for example, to waive exit clauses, which can at best create a win-win situation for both sides.
   

OUTLOOK: HARNESSING IMPROVED PROSPECTS

• It would be completely wrong to claim that a turnaround has been accomplished and that transformation is a thing of the past. In general, the retail world is now so closely linked to changes that further development is unlikely without them – and that applies both offline and online.
• A forecast for the retail market in 2020 is comparable to looking into a crystal ball, given all that has been written about the positive and negative factors. Although the chances of a positive year for all participants are better than in previous years, it is essential to continue to take advantage of them.