Post on 20-May-2020
Retail Market Overview
Germany | 1st quarter 2020Published in April 2020
2Retail Market Overview | 1st quarter 2020 2
With 102,600 sqm and 214 brokered leases signed, the beginning of the letting year in 2020 was restrained as expected. The volume of take-up reduced by around 13% compared to the first quarter of 2019, while the number of deals fell by almost 20%. With the commencement of the shutdown, all letting activities came to an almost complete standstill. Bricks-and-mortar retail is suffering the most from the Coronavirus crisis, with the first insolvencies reported including the Vapiano gastro chain and the Maredo steakhouse chain, both of which were already struggling before the pandemic, as well as the medium-sized clothing & textile company Appelrath & Cüpper. E-Commerce has also suffered considerable losses due to consumers’ general reluctance to spend. While the online segment continued to grow in January, sales across all categories fell by almost 20% at the end of the first quarter of 2020. Only the turnover of essential products that are currently in high demand increased, such as food, drug-store articles, medicines, and the DIY/Home Improvement segment. Permission to reopen shop units with up to
800 sqm from 20th April is an important first step towards alleviating the spiral of falling sales, non-payment of rent and liquidity problems on the part of landlords.The decisive factor will be how quickly turnover will reach sufficient levels to service not only rents, but also other
Retail lettings Germany in inner city locations
Availability rate Q1 2020 – Big 9
Coronavirus pandemic has a firm grip on retail
3Retail Market Overview | 1st quarter 2020 3
fi xed costs. The importance of merging online and off line channels will become apparent when numerous retailers are burdened with their ordered goods with the option, at least, of selling them via the internet - albeit at a discount.
Demand for large units is increasing again – but not major citiesIn the breakdown of lease contracts by store size, there was little change in the shares accounted for by the two smaller size categories (< 100 sqm and < 250 sqm) compared to the same quarter of the previous year. The two medium size categories (250-500 sqm and 500-1,000 sqm) accounted for 30% of activity. There has been renewed strong demand for large units greater than 1,000 sqm which has improved by 4 percentage points to almost 16%. Nonetheless, just nine of the 34 leases were concluded in the Big 10 locations. This had a corresponding impact on take-up which reached a cumulative fi gure of only 34,200 sqm across all the major cities, one of the weakest quarterly fi gures in the last three years. Only Düsseldorf recorded a respectable performance,
Number of deals
Q1 19 Q2 19 Q3 19 Q4 19 Q1 20
Total 263 309 313 266 214
Share Big 10* 39% 34% 33% 46% 39%
Share international concepts 53% 62% 54% 55% 54%
Take-up
Q1 19 Q2 19 Q3 19 Q4 19 Q1 20
Total (,000 sqm) 118.3 130.0 131.6 120.1 102.6
Share Big 10* 45% 28% 21% 38% 33%
Share international concepts 62% 71% 62% 67% 69%
* Berlin, Düsseldorf, Frankfurt, Hamburg, Hanover, Cologne, Leipzig, Munich, Nuremberg, Stuttgart
taking the lead with 11,800 sqm. Here, new tenants of the prestigious Kö-Bogen II development have now been con-fi rmed and contributed to the good result. There is a lack of momentum in the letting markets in the other metropolises; this suggests that the trend from last year, in which small and medium-sized cities are the main focus of expansion managers, also appears to be continuing.
Clothing & Textile segment loses its supremacy once again As was already the case at the beginning of 2019, the Textile sector lost its top position to the Food/restaurants segment in terms of take-up by segment. With 33,400 sqm and a clear lead of 6 percentage points, it took fi rst place. However, the eff ects of the Coronavirus pandemic are clearly refl ected within this segment: while the F&B seg-ment has come to a virtual standstill in the past quarter, 71% of the take-up volume was accounted for by food suppliers, principally Edeka and Aldi. The shares in take-up by the F&B segment (share of 27%) were divided between individual restaurants (13%), gastro chains (11%) and coff ee/tea concepts (3%), with all leases concluded in the weeks preceding the crisis. The Textile sector, which was responsible for an average take-up of around 48,000 sqm per quarter fi ve years ago, currently accounts for just 28,000 sqm. There have been signs for some time now that many chain stores are focusing not on expansion but on
Retail Market Overview | 1st quarter 2020 4
optimising their store networks and fl oor space. Clothing stores, young fashion suppliers and textile discounters account for over 80% of the space take-up, and the online retailer Zalando and textile discounter TK Maxx were particularly expansive with the renting of further outlets in Germany’s city centre locations. Health/beauty retained its third place with 15,500 sqm. The success of these seg-ments is primarily due to all segments continuing their focus on further growth: in the Fitness segment, the start-up Peloton reported fi ve new openings; in the Optician/Hearing Aids segment, Mr. Spex continued to expand its network of physical stores with three new locations; and the drugstore chains also continued to expand with nine leases.
Availability rate for Big 9 unchangedThe availability rate for the fi rst quarter of 2020 has stabilised since the previous year at 11.5% in terms of the number of available shops in the Big 9 locations and 7.1% for the availa-ble space. This means that tenants are still being sought for 260 shops with a total area of 140,200 sqm. In terms of the number of available units, the lowest rate of 7.1% was meas-ured in Hamburg; in terms of space availability, Hanover assumed the lead with just 3.3%. Cologne continued to record the highest rate in terms of the number of available shops at 18.7%, or 28 units. In terms of available space, Leipzig brought up the rear with 12.1%, but this fi gure has already improved considerably since the details of the conversion of the aban-doned Karstadt store became known.
Prime rents remain at a high level – but declines are likelyIn the Big 10 locations, prime rents have remained at the same high level since the fi rst half of 2017, with just Hanover and Cologne experiencing minor corrections of around 4% each over the past three years. In the fi rst quarter of 2020, prime rents in the retail sector remained stable until the onset of the Coronavirus pandemic. Since then, many retailers have pursued negotiations with their landlords as a means of defer-ring or suspending rental payments, which may also lead to a decline in prime rents as the year progresses. In principle, it is foreseeable that owners will have to prepare for a decline in
Lettings by size class
rents even aft er the end of the crisis, at least for some retail segments. Much will depend on how the easing of restrictions will be implemented by the state and how these measures can be implemented by the respective retailers and restaurant operators. Another important factor is whether all the new openings announced can take place within the originally planned time frame. Yields for commercial properties also remain unchanged, averaging 3.0% for the Big 10 cities. This asset class will be under particular observation by investors in the coming weeks and months, as the onset of the pandemic will accelerate the restructuring already underway in the retail sector. These developments will have a decisive impact on yield trends.
Prime yields unit shops
Prime rental index unit shops
* Berlin, Düsseldorf, Frankfurt, Hamburg, Hanover, Cologne, Leipzig, Munich, Nuremberg, Stuttgart** Pool: 185 cities
Retail Market Overview | 1st quarter 2020 5
6Retail Market Overview | 1st quarter 2020 6
Retail lettings (in sqm)
City Q1 2020 Q1 2019 Change Q1 2019 Average 2015-2019
Düsseldorf 11,800 600 1900% 18,300
Berlin 5,200 17,500 -70% 38,400
Hamburg 4,400 6,000 -27% 20,600
Cologne 3,300 4,400 -25% 21,700
Munich 2,500 3,600 -31% 18,700
Nuremberg 2,500 1,500 67% 6,100
Leipzig 2,400 3,400 -29% 11,400
Frankfurt/Main 1,300 13,300 -90% 19,600
Stuttgart 900 590 53% 14,800
Hanover - 2,700 -100% 5,400
Prime retail rents Big 10
City (street) Q1 2020 Q1 2019 Change Q1 2019
Munich (Kaufi ngerstraße-Marienplatz) 360 360
Berlin (Tauentzienstraße) 330 330
Frankfurt/Main (Zeil) 310 310
Düsseldorf (Königsallee) 290 290
Hamburg (Spitalerstraße) 280 280
Stuttgart (Königstraße) 270 270
Cologne (Schildergasse) 250 260
Hanover (Georgstraße) 185 185
Nuremberg (Ludwigsplatz-Hefnersplatz-Karolinenstraße) 160 160
Leipzig (Petersstraße, Grimmaische Straße) 120 120
Prime rent in Euro/sqm/month for a new letting, 100 sqm ground level with 6 m shop front
7Retail Market Overview | 1st quarter 2020 7
Retail high streets with key data
S
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Kurfürstendamm
Tauentzienstraße
Wilm
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€ 300 / 68 %
€ 330 / 83 %
€ 80 / 53 %
Leibn
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Neue Kantstraße
Suar
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Lietzenburger Straße
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€ 90 / 74 %
Schlo
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Düpp
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Leps
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Schildhornstraße
Bergstraße
Schl
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Feuerbachstraße
Walther-Schreiber-Platz
Schloßstr.
S
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Friedrichstraße
€ 100 / 77 %
Eber
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Friedrichstraße
Wilhelmstraße
Behrenstraße
Leipziger Straße
Spre e
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Bhf. Friedrichstrasse
Bhf. Potsdamer Platz
Unter den Linden
Mohrenstr.
Stadtmitte
Französische Str.
SU
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MarktHackescher Alexanderplatz
€ 170 / 85 %
€ 180 / 82 %
Münzstraße
Grunerstraße
Alexanderstraße
Karl-Lie
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Current lettings
Peloton
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Mr. Spex
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
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Flinger Straße
Mittelstr. Kö
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€ 290 / 83 %
€ 150 / 68 %
€ 260 / 81 %
€ 210 / 86%
Paul-Klee-Platz
Konrad-Adenauer-
Platz
Hofgarten
Karlstraße
Hofga rtenstraße
Blumenstraße
AmWehrhahn
Königstraß
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Steinstraße
Haroldstraße
Friedrich-Ebert-Straße
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Current lettings
Frittenwerk
TK Maxx
dm-drogeriemarkt
Mango
Düsseldorf
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
8Retail Market Overview | 1st quarter 2020 8
Retail high streets with key data
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Goethestraße
Bieber-gasse
Steinweg
Gr. Bockenheimer
€ 310 / 76 %
€ 90 / 50 %
€ 250 / 84 %
€ 220 / 54 % € 165 / 100 %
€ 175 / 86 %
Römer
DuFay-Garten
BockenheimerAnlage
Taunus-Anlage
Gallus-Anlage
EschenheimerAnlage
FriedbergerAnlage
Roßmarkt
Seilerstraße
Goeth
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Taunustor
Battonnstraße
Kaisers
traße
Börs
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Berliner Straße
Junghofstraße
Taubenstraße
Große Gallusstraße
Bockenheimer Anla geBleichstraße
Hochstraße
Neue Mainzer Straß e
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OpenStreetMap Contributors CC-BY-SA
Roßmarkt
BockenheimmAnlaggeBockenheimer Anla gge
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FrankfurtCurrent lettings
Klein und Fein am Dom
Peloton
ComeBuy
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€ 235 / 91 %
€ 280 / 84 %
€ 250 / 76 %
€ 80 / 62 % € 200 / 68 %
€ 210 / 76 %€ 110 / 63 %
€ 120 / 45 %
€ 130 / 62 %
Mönckebergstraße
NeuerWall
Spitalerstraße
PoststraßeJungfernstieg
Große Bleichen
Bergstr.
Gerhofstr.
Hohe
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Peloton
Rossmann
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
9Retail Market Overview | 1st quarter 2020 9
Retail high streets with key data
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€ 170 / 56 %
€ 185 / 68 %
€ 185 / 90 %
€ 185 / 76 %
Georgstraße
Bahnh
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Karm
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Gr. P
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Georgstraße
Am Steintor
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Opernplatz
Opernhaus
Karstadt
Königstraße
Osterstraße
Münz
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Goethestr aße
Lavesstraße
Prinz
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Schiffgraben
Joachimstraße
Kurt-Schumacher-Straße
SchmiedestraßeLeine
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Current lettings
Café Extrablatt
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€ 105 / 65 %
€ 260 / 91 %
€ 85 / 55 %
€ 70 / 58 %
€ 120 / 53 %
Ehrenstraße
Hohe
Stra
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Schildergasse
Breite Straße
MittelstraßeNeumarkt
PipinstraßeLindenstraße
Trankgasse
Pilgr ims traße
Neuk
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T unisstra ße
Komödienstraße
Burgmauer
Neumarkt
Magnusstraße
Zeughausstraße
Cäcilienstraße
Limbur ger Str a ße
Hahnenstraße
Habsburgerring
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CologneCurrent lettings
Juwelier Rüschenbeck
Salomon
Dille & Kamille
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
10Retail Market Overview | 1st quarter 2020 10
Retail high streets with key data
ÅÅDBS
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Petersstraße
Niko
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raße
Hainstraße
Grimmaische Str.
Markt
€ 120 / 63 %
€ 45 / 48 %
€ 120 / 85 %
€ 80 / 51 %
UniversitätLeipzig
Augustusplatz
Johannisplatz
Nürn
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Fr iedrich-Ebert-Straße
Käthe
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Prager Straße
Augu
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Martin-Luther-Ring
Roßplatz
Goer
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Willy-Brandt-PlatzTröndlinring
Dittrichring
Geo r
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Current lettings
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Mr. Spex
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€ 330 / 76 %
€ 280 / 48 %€ 290 / 72 %
€ 250 / 58 %
€ 360 / 79 %
€ 130 / 57 %
€ 360 / 69 %
Hofgarten
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Isartorplatz
Blumenstra
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Lenbachplatz
Maximilianstraße
Lindwurmstraße
Karlspl
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Frauenstraße
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Schwanthalerstraße
Bayerstraße
Steins
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12
OpenStreetMap Contributors CC-BY-SA
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Current lettings
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Marc Cain
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
11Retail Market Overview | 1st quarter 2020 11
Retail high streets with key data
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Kaiserstraße
Karolinenstraße Pfannenschmiedsgasse
Ludwigs-/
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Hefnersplatz
€ 100 / 47 %
€ 120 / 76 %
€ 75 / 67 %
€ 160 / 86 %
Kasper-Hauser-
Platz
City Point
WöhrlSt. Lorenz
Marie
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€ 90 / 41 %
König
straß
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Stiftstr.Schulstr.
Marien
straß
e
€ 120 / 69 %
€ 185 / 78 %
€ 270 / 71 %
KatharinenhospitalMittlerer
Schloßgarten
ObererSchlossgarten
Torstraße
Büchsenstr aße
Landhausstraße
Hauß
mann
straß
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Konra
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Hegelstraße
Rosenbergstraße Kriegsbergstraße
Rotebühlstraße
Alex
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Gerokstraße
Wagenburgtunnel
Seidenstraße
Fr itz-Elsas-Straße
Schloßstraße
Planie
Paulin enstraße
Charlottenstraße
Frie
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Theodor-Heuss
-Stra
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1
2
OpenStreetMap Contributors CC-BY-SA
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Current lettings
Zalando Outlet
Café Extrablatt
Current lettings
Fleiner Möbel by Architare
Mephisto
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
High street with Prime Rent(€/sqm/Month) / % of retail chains
Source: JLL Research 2020 Q1, OpenStreetMap Contributors CC-BY-SA
ContactsSandra Ludwig Head of Retail Investment Germanytel +49 (0) 40 350011 207sandra.ludwig@eu.jll.com
Dirk WichnerHead of Retail Leasing Germanytel +49 (0) 30 203980 118dirk.wichner@eu.jll.com
Helge Scheunemann Head of Research Germanytel +49 (0) 40 350011 225helge.scheunemann@eu.jll.com
Copyright © JONES LANG LASALLE SE, 2020. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.
jll.de Information regarding JLL and our servicesjll.de/research All research reports on current market figures and special topicsjll.de/immo Commercial real estate properties for sale or to let througout Germany
Jörg RitterMember of the JLL Operations & Strategy Boards Germanytel +49 (0) 69 2003 2316joerg.ritter@eu.jll.com