Highlights
Retail space in strong demand again
Letting performance in Germany 2024
Research view
Letting performance in Germany 2024: retail space in strong demand again
The market for retail spaces in Germany is showing a marked recovery in 2024. After a challenging period, leasing activity is beginning to stabilise, indicating a positive trend in the retail sector. Especially in the prime locations of Germany's major cities, new trends are emerging that could have a lasting impact on the market.
Sentiment among German consumers recovers significantly
The mood among German consumers has improved noticeably in 2024. According to a recent survey by market research institute GfK, consumer sentiment rose by +3.2 points in August compared to the previous month. Thanks to the recovery in consumer sentiment and the expected economic upturn, the German Retail Association (HDE) is forecasting an increase in retail sales of around 3.5% for 2024 as a whole.
The author: Olaf Janßen
Head of Real Estate Research @ Union Investment
Date: September 2024
Letting performance for retail space: Significant increase in the first half of 2024
According to brokerage firm Jones Lang LaSalle, around 246,000 m² of retail space was newly let in the first half of 2024. This corresponds to an increase of around 16% compared to the same period last year. The second quarter of 2024 in particular contributed to this positive result, as the letting of large spaces over 1,000 m² increased significantly.
Newly let retail space 1 HY 2024
International chain stores drive demand for retail space
More than half of the demand for retail space in the first half of 2024 came from international chain stores. For example, the Canadian outdoor retailer Arc'Teryx opened its first German shops in Berlin and Munich. Italian fashion label Dondup also expanded to Munich, while French bag label Cabaïa opened its first German shop in Cologne.
Retail rents 2024: Stable development in prime locations
Thanks to the high demand for retail space in prime locations in major German cities, prime rents stabilised in the first half of 2024. Rents are expected to move sideways in the second half of the year. Moderate rental growth is forecast for most cities in 2025 due to the positive sales forecasts.