The retail sector has dominated the property investment market in Germany this year, representing around 35% of transactions as investors remain encouraged by the stable consumer climate, according to property adviser Savills.
The retail sector has dominated the property investment market in Germany this year, representing around 35% of transactions as investors remain encouraged by the stable consumer climate, according to property adviser Savills.
The international broker said the research suggests that the two main drivers for investors are the typically long-lease agreements and the relatively healthy consumer climate in Germany. In particular, Savills noted that multi-tenant retail properties in prime locations produce a stable return on investment with standard shopping centre units in Hamburg and Berlin reaching EUR 90 per m2/month.
Savills also reported that prime high-street rents topped EUR 250 per m2/month in Frankfurt with Berlin and Hamburg at EUR 230 per m2/month and EUR 190 per m2/month respectively. High street rents, Savills says, are driven by a scarcity of high-quality retail space in the attractive high street locations.
Matthias Pink, Savills research consultant in Germany, said: 'We have seen some stability in rents on the high street as young fashion brands and drugstores are still expanding. However, some department store operators have been casualties of the economy and this vacancy has increased the divide in the core cities between primary and secondary space as occupiers are less willing to take space outside prime locations.'
