Retail Market Overview - JLL · Retail Market Overview | 4th quarter 2019 2 Despite the generally...

Retail Market Overview

Germany | 4th quarter 2019 Published in January 2020

2Retail Market Overview | 4th quarter 2019 2

Despite the generally subdued mood in the retail sector, the retail letting year 2019 closed with a good result of 500,100 sqm and the conclusion of a total of 1,151 con-tracts. Compared to the previous year, the volume of space and the number of deals even improved slightly by 4% and 7% respectively. This is the second-best result in the Ger-man retail letting market in the last 5 years; however, the average size of a brokered retail unit reduced once again to 430 sqm (for comparison: the average size 10 years ago was around 500 sqm). However, the geographical analysis shows significant diffe-rences. Just 33% (162,700 sqm) of the letting take-up occur-red in the Big 10 locations, around 40,000 sqm down on the previous year. Two-thirds of take-up is now generated in Germany’s small and medium-sized cities, which has had an effect on the results in the Big 10 cities. Five of the major cities registered lower results year-on-year including the front-runner, Berlin. Although the federal capital was unable to match the previous yearʼs level, it still managed to regis-ter the top result of 41,300 sqm. Around half of the space take-up was made up of lettings of units larger than 1,000 sqm. Frankfurt (25,800 sqm) and Munich (20,700 sqm) were also in the top group but although Frankfurt’s performance was particularly impressive, more than half of the take-up was generated in the first quarter. Munich can look back on

a balanced letting year, with Maximilianstrasse and Thea-tinerstrasse in particular once again enjoying stronger de-mand, accounting for 14 lettings. Among the cities with a weaker performance were Cologne, Düsseldorf, Leipzig and Stuttgart. Stuttgart’s results were especially disappointing with none of the 15 deals recor-ded larger than 500 sqm. The situation was similar in Leip-zig, where there was also a lack of large-scale lettings. Co-logne recorded an average letting year, but was unable to match the previous year’s result, which was one of the best

Retail lettings Germany in inner city locations

Availability rate by size classes – Big 9

Retail letting market surprisingly stable


in the last five years with 31,800 sqm. The Rhein metropolis Düsseldorf disappointed with weak take-up figures. Alt-hough there is no shortage of projects coming on stream, just 37 leases were reported, compared to 67 in 2018.

Clothing & Textile segment confirms leading positionDespite losing pole position to the Food/restaurants seg-ment for the first time at the beginning of the year, the Clothing & Textile segment has reclaimed its crown, leading the sector analysis with a share of 27% of take-up. Textile discounters made a significant contribution to this result. While the mid-price segment of Clothing & Textile retailers were struggling, discounters continued on their road to success. First and foremost was Ernstingʼs Family with 18 leases, followed by TK Maxx with 12 new stores. The Food/restaurant segment remained in second place. With 24%, it has increased its share of take-up by 4 percentage points since the previous year; however, it lagged behind the Tex-tile segment in terms of the volume of lettings concluded for units larger than 1,000 sqm. The leading trio is comple-

Number of deals

Q4 18 Q1 19 Q2 19 Q3 19 Q4 19

Total 276 263 309 313 266

Share Big 10* 40% 39% 34% 33% 46%

Share international concepts 58% 53% 62% 54% 55%

Take-up

Q4 18 Q1 19 Q2 19 Q3 19 Q4 19

Total (,000 sqm) 119.7 118.3 130.0 131.6 120.1

Share Big 10* 33% 45% 28% 21% 38%

Share international concepts 65% 62% 71% 62% 67%

* Berlin, Düsseldorf, Frankfurt, Hamburg, Hanover, Cologne, Leipzig, Munich, Nuremberg, Stuttgart

ted by the Health/beauty sector, which continued to ac-count for around 15% of take-up. At around 42%, most of the letting volume was accounted for by the drugstore chains, Müller, Rossmann and dm. The continued willing-ness of this segment to expand its market presence is evi-dent from the announcement by Budnikowsy, which has so far focused on Hamburg, to open new stores throughout Germany. The Department store segment, which played a rather mi-nor role last year, improved by 2 percentage points to 7% in 2019 and now leads the midfield. The Woolworth depart-ment store chain, which continued its expansion unabated, secured 22 new stores. Furnishing/décor and Sports/out-door followed with a 5% share each, but both lost some ground compared to 2018, by 2 and 3 percentage points re-spectively, although the Danish furnishing chain Søstrene Grene and the French sports goods supplier Decathlon have further expanded their presence in the country. The Shoes/leather goods segment recovered slightly, achieving a share of 4% in 2019. The announcement by the shoe retailer Görtz of its plans to take over 45 stores from the dissolved Roland Group has certainly contributed to this optimism. Although the Telecommunications/home electronics, Books/stationery and Banking/insurance segments were unable to expand their market shares, they remained at a consistent level of between 1% and 2%.

Retail Market Overview | 4th quarter 2019 4

Higher availability in the lower size categories In the second half of 2019, there was a slight shift in the retail space available to the market for the Big9. Although demand for retail space in the two lower size categories < 100 sqm and up to 250 sqm was highest in both Germany and the Big 9 locations over the past letting year, the analy-sis of the availability ratio by shop size shows an increase of 5 percentage points in the available space in these two size categories. This means that in the smaller category, the mar-ket has 17 more units available than a year ago. In contrast, the mid-size categories (< 250 sqm – 1,000 sqm) and larger unit sizes (from 1,000 sqm) improved their share of take-up by 3 and 2 percentage points respectively.Despite the high demand, the market appears to have suf-ficient space in the smaller category, and so preference is gi-ven to units where the location, layout, rent and fit-out spe-cification perfectly match the requirements of the retailers.The Textile segment continued to account for the highest number of retail units taken up with 91, followed at some distance by the Restaurant/Food sector with 21. However, both segments were able to improve their results by 12% and 16% respectively compared to the same period in the previous year.

Prime rents continue to fallOn average, prime rents in the Big 10 locations fell slightly by 0.4% by mid-2019. The decisive factor here was the con-firmation of the rental price forecast for Cologne, where the prime rent fell by 4% to its current level of €250/sqm/month. Rents remained stable in the other nine cities and are not expected to change in the first half of 2020. In terms of all 185 retail locations surveyed by JLL, rents are expected to fall by 1.3% in the first half of 2020. Within the respective population size categories, moderate rental decreases of 0.4% are expected for cities with more than 500,000 inhabi-tants, and by 1.5% and 1.3% in cities with populations of 100,000 – 250,000 inhabitants and below 100,000 inhabi-tants, respectively. Only medium-sized cities with 250,000 – 500,000 inhabitants, which have so far proved to be the most stable, are forecast to experience a more significant decline of 3.2%.

Lettings by size class

The decline in prime rents and the impending structural changes in bricks-and-mortar retail are not expected to have an impact on investor demand for inner-city retail properties. Due to the continuing scarcity of supply, a lack of investment alternatives and stable yields in six major German cities, office and retail buildings in prime locations continue to be highly sought after by investors. The average prime yield for the Big 10 was around 3.0% at the end of 2019. Among the four cities experiencing continued yield compression were Berlin and Munich, each with falls of 10 bps, Nuremberg with 15 bps and Leipzig with 5 bps.

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 | 4th quarter 2019 5


Retail lettings (in sqm)

City 2019 2018 Change to 2018 Average 2014-2018

Berlin 41,300 43,700 -5% 41,900

Frankfurt/Main 25,800 16,500 56% 20,500

Munich 20,700 19,800 5% 18,600

Hamburg 20,600 16,700 23% 23,500

Cologne 19,300 31,800 -39% 21,800

Düsseldorf 12,600 22,500 -44% 17,600

Hanover 8,300 6,000 38% 5,400

Leipzig 7,700 20,800 -63% 11,000

Nuremberg 3,500 3,000 17% 6,600

Stuttgart 2,900 19,600 -85% 19,600

Prime retail rents Big 10

City (street) 2. Hj. 2019 2. Hj. 2018 Change 2. Hj. 2018 Forecast 1. Hj. 2020

Munich (Kaufingerstraße-Marienplatz) 360 360 360

Berlin (Tauentzienstraße) 330 330 330

Frankfurt/Main (Zeil) 310 310 310

Düsseldorf (Königsallee) 290 290 290

Hamburg (Spitalerstraße) 280 280 280

Stuttgart (Königstraße) 270 270 270

Cologne (Schildergasse) 250 260 à 250

Hanover (Georgstraße) 185 185 185

Nuremberg (Ludwigsplatz-Hefnersplatz-Karolinenstraße) 160 160 160

Leipzig (Petersstraße, Grimmaische Straße) 120 120 120

Prime rent in Euro/sqm/month for a new letting, 100 sqm ground level with 6 m shop front


S

U

U

U

U

U

U

U

S

S F

Kurfürstendamm

Tauentzienstraße

Wilm

ers-

dorfer Str.

€ 300 / 68 %

€ 330 / 83 %

€ 80 / 53 %

Suar

ezstr

aße

Lewishamstraße

Neue Kantstraße

Budapester Straße

Kurfürstendamm

Lietzenburger Straße

Kantstraße

3

S

S

U

U

U

€ 90 / 74 %

Schlo

ssstr

aße

Düpp

elstra

ße

Leps

iusstr

aße

Schildhornstraße

Bergstraße

Schl

oßst

raße

A 103

Feuerbachstraße

Walther-Schreiber-Platz

Schloßstr.

S

U

UU

U

U

U

US

U

FFriedrichstraße

€ 100 / 77 %

Friedrichstraße

Wilhelmstraße

Behrenstraße

Leipziger Straße

Unter den Linden

Spree

Bhf. Friedrichstrasse

Unter den Linden

Mohrenstr.

Hausvogteiplatz

Stadtmitte

Französische Str.

SU

U

U

U

S

F Markt

Hackescher Alexanderplatz

€ 170 / 85 %

€ 180 / 82 %

MünzstraßeAlexanderstraße

Karl-Lieb

knec

ht-Stra

ße

Spree

1 245

Bhf. Alexanderplatz

Hackescher Markt

Weinmeisterstr.

ÅÅDBS

®U

®U®U

®U

®U

®U

®U

®U

®U

®U

F

F

F

Köni

gsall

ee

Schadowstraße

Flinger Straße

Mittelstr.

Köni

gsall

ee

€ 290 / 83 %

€ 150 / 68 %

€ 260 / 81 %

€ 210 / 86%

Paul-Klee-Platz

Konrad-Adenauer-

Platz

Hofgarten

Festwiese

Karlstraße

H ofga rte nstraße

Blumenstraße

AmWehrhahn

Königstra

ße

Kölner Straße

Steinstraße

Haroldstraße

Friedrich-Ebert-Straße

Nord-West-Tunnel

Graf-Adolf-Straße

Ersatzstraße

Immermannstraße

Kase

rnen

straß

e

Breit

e Stra

ße

Berlin

er A

llee

Ostst

raße

Rhei

n

1

2

3

4

DüsseldorfHbf

OpenStreetMap Contributors CC-BY-SA

Retail high streets with key data

Berlin

Made.com Happy Socks

Current lettings

Red Wing Shoes Granit Lush Hema

Current lettings

Kapten & Son Mitte Garten (H&M) Old Rose Coffee

Düsseldorf

Counting place with Pedestrian Flow (Ø p. h., Survey on Saturdays from 1:00 p.m. to 4:00 p.m.)

High street with Prime Rent (€/sqm/Month) / % of retail chains

Source: JLL Research 2019 Q4, OpenStreetMap Contributors CC-BY-SA





SS

®U

®U

®U

®U

®U

®U

F

FF

FZeil

Schi

llers

tr.Goethestraße

Bieber-gasse

Steinweg

Gr. Bockenheimer

€ 310 / 76 %

€ 100 / 50 %

€ 250 / 84 %

€ 220 / 54 %€ 165 / 100 %

€ 175 / 86 %

Römer

DuFay-Garten

Rothschildpark

BockenheimerAnlage

Taunus-Anlage

Gallus-Anlage

EschenheimerAnlage Friedberger

Anlage

Roßmarkt

Taunusanlage

Fried

enss

traßeTaunusstraße

Stoltz

estra

ße

Battonnstraße

Kaisers

traße

Börs

enstr

aße

Seilerstraße

Taunustor

Berliner Straße

Junghofstraße

Taubenstraße

Große Gallusstraße

Bockenheimer AnlageBleichstraße

Hochstraße

Neue Mainzer Straße

Taunusanla

ge

Kurt

-Sch

umac

her-

Stra

ße

Konr

ad-A

dena

uer-S

traße

1

2

34


Roßmarkt

ÅÅDB

S

S

S

®U

®U

®U

®U

®U

®U

®U

®U

F

F

F

F

€ 235 / 91 %

€ 280 / 84 %

€ 250 / 76 %

€ 80 / 62 % € 200 / 68 %

€ 210 / 76 % € 110 / 63 %

€ 120 / 45 %

€ 130 / 62 %

MönckebergstraßeNeuer

Wall

Spitalerstraße

PoststraßeJungfernstieg

Große Bleichen

Bergstr.

Gerhofstr.

Hohe

Blei

chen

2

3

Rödingsmarkt

Gänsemarkt

Rathaus

Mönckebergstr.

Steinstr.

Hbf.-Nord

Stadthausbrücke

Jungfernstieg

Klos

terwa

ll

Meßberg

Domstra

ße

Caffamacherreihe

Steintorwall

Ferdi

nandstor

Gänsemarkt

Steinstraße

Glockengießerwall

Valentinskamp

Neue

r Jun

gfern

stieg

Kaiser-Wilhelm-Straße

Wallr ing tunne l

Ballindamm

Deichtortunnel

Willy-Brandt-Straße

1

2

3

4

Hamburg Hbf


ABC-Str.

Gäns

emarkt


Current lettings

SØstrene Grene + Görtz Karstadt Sports Levi’s Riccardo Retail

Current lettings

The Body Shop Anthropologie Benetton Landage & Oelke

Frankfurt

Hamburg








ÅÅDBS

®U

®U

®U

®U

®U

F

F

F

F

€ 170 / 56 %

€ 185 / 68 %

€ 185 / 90 %

€ 185 / 76 %

Georgstraße

Bahnh

ofstra

ße

Karm

arsc

hstra

ße

Gr. P

ackh

ofst

raße

Georgstraße

Am Steintor

Kröpcke

Opernplatz

Opernhaus

Ernst-August-Galerie

Karstadt

Osterstraße

Königstraße

Lister

Meile

Münz

straß

e

Herschelstraße

Goethestraß e

Gose

riede

P ri nz

enstr

aße

Lavesstraße

Fernr

oder

Straße

Schiffgrab

en

Joachimstraße

Kurt-Schumacher-Straße

Schmiedestraße

Leine

1

23

Hannover Hbf


4

®U

®U

®U

®U

®U

®U

®U

®U

FF

F

F

€ 200 / 82 %

€ 105 / 65 %

€ 250 / 91 %

€ 85 / 55 %

€ 75 / 58 %

€ 120 / 53 %

Ehrenstraße

Hohe

Stra

ße

Schildergasse

Breite Straße

MittelstraßeNeumarkt

Pipinstraße

Pilgrims traße

Venloer Straße

Neuk

öllne

r Stra

ße

Tunisstr aß e

Komödienstraße

Burgmauer

Neumarkt

Magnusstraße

Zeughausstraße

Cäcilienstraße

Limbur ger S tr a ße

Hahnenstraße

Tunisstraße

Hohenstaufenring

No rd -S üd-Fahrt

Hohe

nzo l

lern

ring

1

2

3

4



Current lettings

Pylones Vaund (Showroom f. luxury goods)

Hirmer Five Guys

Current lettings

Parfümerie Pieper Kapten & Son Parfümerie Meller Intimissimi

Hanover

Cologne








ÅÅDBS

S

S

F

F

Peters straße

Niko

laist

raße

Hainstraße

Grimmaische Str.

Markt

€ 120 / 63 %

€ 45 / 48 %

€ 120 / 85 %

€ 75 / 51 %

UniversitätLeipzig

Augustusplatz

Johannisplatz

Nürn

berg

er S

traße

Friedrich-Ebert-Straße

Käthe

-Kollwitz-S

traße

Prager Straße

Augu

stus

plat

z

Ro ßplatz

Martin-Luther-Ring

Brandenburg er Straße

Goer

dele

rring

Willy-Brandt-PlatzTröndlinring

Dittrichring

Geor

g iri

ng

Ranstädter Steinweg 1

23

Leipzig Hbf


S

S

S

®U

®U

®U

®U®U

®U

®U

F

F

F

F

Tal

Sendlinger Str.

Neuhauser Str.

Wein

str.,T

heat

iners

tr. D

iener

straß

e,

Maximilianstraße

Kaufingerstr.

€ 330 / 76 %

€ 280 / 48 %€ 320 / 72 %

€ 250 / 58 %

€ 360 / 79 %

€ 140 / 57 %

€ 360 / 69 %

Elisenhof

Hofgarten

AlterBotanischer

Garten

Isar torplatz

Blumenstra

ße

Len bachplatz

Maximilianstraße

Lindwurmstraße

Karlspl

atz

Frauenstraße

Sophiens tra ße

Elisenstraße

Steins

dorfs

traße

Bayerstraße

Sonnenstraße

Maximiliansplatz

Schwanthalerstraße

Thomas- W

immer-

R ing

Isar

1

2

34


Resid

enz

stra

ße


Current lettings

Rocketʼs Burger Riccardo Retail JD Sports

Current lettings

Restaurant Anoki Brunello Cucinelli Zalando Outlet Anna Inspiring Jewellery

Leipzig

Munich








®U

®U

F

F

F

KönigstraßeBreite Gasse

Kaiserstraße

Karolinen straße Pfannenschmiedsgasse

Ludwigs-/

Köni

gstra

ße

Hefnersplatz

€ 100 / 47 %

€ 120 / 76 %

€ 75 / 67 %

€ 160 / 86 %

Kasper-Hauser-

Platz

City Point

WöhrlSt. Lorenz

Marie

ntorgr

aben

Kontumazgarten

Spittlertorgr

abe n

Wes

ttorg

rabe

n

König

storg

rabe

n

1

2


S

S

S

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

®U

F

F

FF

€ 100 / 41 %

König

straß

e

Stiftstr.Schulstr.

Marien

straß

e

€ 140 / 69 %

€ 185 / 78 %

€ 270 / 71 %

Katharinenhospital MittlererSchloßgarten

ObererSchlossgarten

Torstraße

HerdwegBüchsenstr aße

Landhausstraße

Hauß

mann

straß

e

Konra

d-Ade

naue

r-Stra

ßeHolzg

a rten

straß

eRosenbergstraße Kriegsbergstraße

Rotebühlstraße

Alex

ande

rstra

ße

Hegelstraße

Ger o

kstraß

e

WagenburgtunnelSeidenstraße

Fr itz-Elsas-Straße

Schloßstraße

Planie

Paulinenstraße

Charlottenstraße

Frie

dric

hst ra

ße

Theodor-Heuss

-Stra

ße

1

2

3



Current lettings

The Body Shop Ulla Popken

Current lettings

Teufel Soundsysteme Home24.de Five Guys

Nuremberg

Stuttgart







Jörg RitterManagement Board Germany, Retailtel +49 (0) 69 2003 [email protected]

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

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