Driven by large-scale lettings by textile retailers, the German retail rental market achieved take-up of 109,000 m² in the first quarter of 2022, exceeding the same quarter of the previous year, which was hampered by the lockdown, by more than ten percent. Clothing stores and young fashion providers in particular accounted for an industry share of a strong 41 percent, with around three quarters of the take-up being accounted for by deals of more than 1,000 m². On average, the textile industry had only achieved a 26 percent share of space take-up in the past five years and had to give up its traditional top position to the catering/food industry several times.
Dirk Wichner, Head of Retail Leasing: “The fashion trade is much more agile again because many used the government protective shield procedure of the pandemic phase to clean up their portfolio. Accordingly, less lucrative locations were sorted out and the focus was on clearly visible shops in central locations. The fact that, above all, large areas are rented is a further step in reducing the rental costs per square meter. In this respect, some fashion retailers have reorganized the cost side, but the concept must now also prove itself on the income side for the calculation to work out.”
The number of deals nationwide increased slightly by five percent to 213 rentals in the first quarter. The ten largest shopping metropolises were strong again, accounting for around half of the rental volume. The share of this group of cities had been around a third in the past two years and only showed an upward trend again in the final quarter of 2021.
Berlin contributed the most deals with 20 ahead of Cologne with 18. Hamburg and Düsseldorf follow at the same level with 13 rentals ahead of Munich (12) and Frankfurt (11). Stuttgart, Leipzig, Nuremberg and Hanover were significantly less dynamic at the beginning of the year.
The order of rented space is similar, although not identical, with Berlin currently leading the field with 13,200 m² ahead of Cologne with 10,400 m². In a year-on-year comparison, the cathedral city more than tripled its turnover. Hamburg (6,700 m²) and Munich (4,400 m²) also recorded a plus, which increased by 570 percent and 29 percent respectively compared to Q1 2021. “We are now observing some catch-up effects in the prime locations of many metropolises. At the latest when the restrictions are relaxed, people are drawn back to the city centers to shop, but above all to enjoy themselves. That is why retailers who have rethought and realigned their concepts over the past two years are particularly successful,” explains Dirk Wichner.
In an industry comparison, the textile industry has clearly set itself apart from the rest of the field for the first time in several years. At the same time, the strong fashion industry is benefiting from a breather in the supermarkets, which were no longer so expansive in the first quarter of 2022. Overall, the gastronomy/food industry accounts for around 20 percent, although this time only a good half of this is accounted for by the food retail trade. Health/beauty followed in third place with a good tenth, around half of which was in drugstores.
Dirk Wichner says: “In recent years, food retailers have expanded in central locations like hardly any other industry and have asserted themselves against online trade through their presence. If you always have the nearest local supplier in sight, you order less online. However, the location networks are now also very differentiated, and at the same time there are currently hardly any options in the top locations to continue renting with the dynamics you are used to.”
Meanwhile, prime rents for top locations have stabilized again in almost all city categories after a correction last year. The highest rent is still paid at 340 euros per square meter per month in Munich. Berlin (310 euros), Frankfurt (290 euros) and Düsseldorf (275 euros) follow. Hamburg achieves 265 euros and is thus ahead of Stuttgart with 260 euros and Cologne with 235 euros. Hanover (175 euros), Nuremberg (150 euros) and Leipzig (110 euros) follow at a distance.
Dirk Wichner sees a lot of potential for the current year – under certain conditions: “Basically, the market has the potential to return to pre-pandemic levels. However, it is currently difficult to predict how much the uncertainties caused by war, disrupted supply chains, inflation and energy prices will affect retailers and their customers.”
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