Retailers on German high streets are demanding more flexible terms, meaning the traditional 10-year lease will soon be a thing of the past, says one retail expert.
CBRE’s Frank Emmerich, head of retail transactions in Germany, said the trend was led by international retailers. ‘These retailers want break clauses and shorter leases. It is a learning curve for German landlords who have been used to letting shops for 10 years and then re-letting for another 10 at a higher rent.’
Emmerich said H&M for example, which has 465 leases in Germany, looks to renegotiate a three-year, rolling lease, or a lease with a break clause whenever a lease comes to an end.
He said the main exceptions are luxury goods retailers and supermarkets, which like 10-year leases because of the investment they make in their stores. Supermarkets are consequently highly sought-after by investors.
International retailers continue to focus forensically on the country’s 'big seven' cities, he said. New brands opening in Germany this year include Dyson, the British electrical goods manufacturer, which has taken a store in the Oberhauser regional mall. French ski brand Salomon opened its first German store this year in Munich, has one close to signing in Frankfurt and a third under negotiation.
