retail market overview - jll · 2019-11-01 · retail market overview | 3rd quarter 2019 2 in the...

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


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


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


Retail high streets with key data

S

U

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US

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Tauentzienstraße

Wilm

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€ 300 / 68 %

€ 330 / 83 %

€ 80 / 53 %

Leibn

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Neue Kantstraße

Suar

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Kai se r- Fr ied ri ch-S traße

Budapester Straße

Lietzenburger Straße

Kurfürstendamm

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2

3

S

S

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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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A 103

Feuerbachstraße

Walther-Schreiber-Platz

Schloßstr.

S

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S

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Friedrichstraße

€ 100 / 77 %

Eber

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Friedrichstraße

Wilhelmstraße

Behrenstraße

Leipziger Straße

Spre e

4

Bhf. Friedrichstrasse

Bhf. Potsdamer Platz

Unter den Linden

Mohrenstr.

Stadtmitte

Französische Str.

SU

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S

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€ 170 / 85 %

€ 180 / 82 %

Münzstraße

Grunerstraße

Alexanderstraße

Karl-Lie

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Current lettings

Peloton

Butlers

7 for all mankind

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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€ 290 / 83 %

€ 150 / 68 %

€ 260 / 81 %

€ 210 / 86%

Paul-Klee-Platz

Konrad-Adenauer-

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Hofgarten

Karlstraße

Hofga rtenstraße

Blumenstraße

AmWehrhahn

Königstraß

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Steinstraße

Haroldstraße

Friedrich-Ebert-Straße

Nord-West-Tunnel

Graf-Adolf-Straße

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Current lettings

Frittenwerk

TK Maxx

dm-drogeriemarkt

Mango

Düsseldorf





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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

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FrankfurtCurrent lettings

Klein und Fein am Dom

Peloton

ComeBuy

ÅÅDB

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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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Klos

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Steintorwall

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Uniqlo

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€ 170 / 56 %

€ 185 / 68 %

€ 185 / 90 %

€ 185 / 76 %

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Bahnh

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Karm

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Gr. P

ackh

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Georgstraße

Am Steintor

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Opernplatz

Opernhaus

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Königstraße

Osterstraße

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Goethestr aße

Lavesstraße

Prinz

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Fernr

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Schiffgraben

Joachimstraße

Kurt-Schumacher-Straße

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Current lettings

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€ 105 / 65 %

€ 260 / 91 %

€ 85 / 55 %

€ 70 / 58 %

€ 120 / 53 %

Ehrenstraße

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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

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Hahnenstraße

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Juwelier Rüschenbeck

Salomon

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Niko

laist

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Hainstraße

Grimmaische Str.

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€ 120 / 63 %

€ 45 / 48 %

€ 120 / 85 %

€ 80 / 51 %

UniversitätLeipzig

Augustusplatz

Johannisplatz

Nürn

berg

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Fr iedrich-Ebert-Straße

Käthe

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Prager Straße

Augu

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Martin-Luther-Ring

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Willy-Brandt-PlatzTröndlinring

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Current lettings

Thalia Mayersche

Subway

Mr. Spex

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Maximilianstraße

Kaufingerstr.

€ 330 / 76 %

€ 280 / 48 %€ 290 / 72 %

€ 250 / 58 %

€ 360 / 79 %

€ 130 / 57 %

€ 360 / 69 %

Hofgarten

AlterBotanischer

Garten

Isartorplatz

Blumenstra

ße

Lenbachplatz

Maximilianstraße

Lindwurmstraße

Karlspl

atz

Frauenstraße

SophienstraßeElisenstraße

Schwanthalerstraße

Bayerstraße

Steins

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traße

Sonnenstraße

Maximiliansplatz

Thomas- W

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AlltteeerrBotanischer

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Current lettings

Tegut

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Kaiserstraße

Karolinenstraße Pfannenschmiedsgasse

Ludwigs-/

Köni

gstra

ße

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

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€ 120 / 69 %

€ 185 / 78 %

€ 270 / 71 %

KatharinenhospitalMittlerer

Schloßgarten

ObererSchlossgarten

Torstraße

Büchsenstr aße

Landhausstraße

Hauß

mann

straß

e

Konra

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r-Stra

ßeHolzg

arten

straß

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Hegelstraße

Rosenbergstraße Kriegsbergstraße

Rotebühlstraße

Alex

ande

rstra

ße

Gerokstraße

Wagenburgtunnel

Seidenstraße

Fr itz-Elsas-Straße

Schloßstraße

Planie

Paulin enstraße

Charlottenstraße

Frie

dric

hst ra

ße

Theodor-Heuss

-Stra

ße

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Nuremberg

Stuttgart

Current lettings

Zalando Outlet

Café Extrablatt

Current lettings

Fleiner Möbel by Architare

Mephisto





ContactsSandra Ludwig Head of Retail Investment Germanytel +49 (0) 40 350011 [email protected]

Dirk WichnerHead of Retail Leasing Germanytel +49 (0) 30 203980 [email protected]

Helge Scheunemann Head of Research Germanytel +49 (0) 40 350011 [email protected]

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 [email protected]

retail market overview - jll · 2019-11-01 · retail market overview | 3rd quarter 2019 2 in the...

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