Retail properties: German financers, operators and investors optimistic about the future

German financers, operators and investors in retail properties are optimistic about the future in a dynamically changing segment, despite challenging conditions. This was the conclusion of the expert discussion “upheaval in the retail sector – prospects for retail properties”, which was held yesterday at HSH Nordbank in Hamburg. Thanks to an upturn in retail sales both in shops and online, as well as successfully adapting strategies, the sector is well prepared for increasing digitisation in trade and changing trends in society.

On the one hand, consumer confidence in Germany is very high, with private consumer spending on the up. Not only have online sales climbed by almost 7%, sales in physical stores also rose by around 2.5% in the last twelve months. As a result of this surge in sales, especially in local amenities, the forecast is for increasing sales per square metre. On the other hand, challenges are mounting for the sector. There is little new construction going on, lease terms are decreasing, rent prices are trending sideways, modernisation cycles are getting shorter and the move towards digitisation is sparking an upheaval in retail that not all retailers and shopping centres are prepared for. Rising pressure from competition is also affecting properties in peripheral and city locations in particular.

Photo: HSH Nordbank AG