Retail market in change: trends, opportunities and mixed future prospects

retail in Germany: Rental figures indicate positive development, space offering continues to grow

The German retail market shows a mixed picture in the first half of the year. There are both positive and negative indicators that determine the general mood. On the negative side, for example, the closure messages include numerous Galeria branches and shops of the Aachener fashion house. These developments are likely to increase the range of space in the city centers and challenge the search for sustainable reuse concepts. On the positive side, an increase in passers -by frequencies in German shopping streets can be determined, which benefits, among other things, from increased flows of visitors during the football European championship. Sales in the inpatient fashion trade compared to the previous year and the lower cost pressure due to the lower inflation rate also have positive effects on the retail sector [1]. In order to analyze the effects of these factors more precisely on the retail market, BNP Paribas Real Estate examined the rental figures for the annual convenience.

more degrees, but falling area sales

Compared to the previous year, more rentals and openings were registered in the first half of 2024. With around 450 contracts, the number is about 20% higher and reaches the best value since 2019. However, the area turnover was lower than in the middle of 2023, mainly due to the major degrees of the Aachener fashion house. Although these initially ensured a high area absorption in former Galeria department stores, they had to close again or have to go out. Minus these area sales, the current rental volume has reached the best value in five years. The starting point for the second half of the year is therefore: the demand is dynamic, but the range of space is growing even more dynamic. Investors, project developers and urban actors observe the situation closely and recognize the opportunities of the department store division for the inner cities, from which they should benefit from new developments and revival of assets. Compared to other object types, the retail division was able to best cut the investment side in the first half of the year [1].

Mixed future prospects, positive market entries

Overall, the mood on the German retail market is still mixed, but better than the headlines of the actors that have come into trouble. In the first half of the year there were increasingly market entries from abroad and online trading. In Berlin, for example, Arc’teryx (Canada), ON (Switzerland) and Highsnobiety (online player) were opened in Munich Purelei (online player) and Unisport (Denmark) and in Cologne Cabaia (France). This suggests a good rental dynamics in the next six months, although the scales between those who have to give up and those who want to strengthen their positioning in inpatient business continue to hold [1].

[1] Source: Textile industry, hystreet.com

Frankfurt/Main