Retail Property - Buying Or Selling Real Estate Properties In The Intra-Urban Retail Sector Of Germany

Retail Property to Buy or Sell

The generic term “commercial real estate” refers to areas intended for retail use. These include the classic retail stores and department stores, particularly pedestrian areas of cities as well as department stores and shopping centres. Stores and department stores in pedestrian zones of large cities are generally most desirable for retail property investments. The initial returns for retail properties of all property types are lowest, because the availability of retail properties that are not in pedestrian zones is low. Demand from tenants is very high and primarily focused at the ground floor, therefore the rents for this type of retail property have strong potential but poor levels of risk in terms of loss of rent or vacancy. It is, however, important to note that location is the most critical factor in determining the value of retail property. Central locations and adequate customer access are essential for viability. The retail property must be located in a busy area/street, otherwise above-average rents and purchase prices are not obtainable. If the retail space is already in a side street off the busy pedestrian zone, a significant loss in revenue and earnings can be expected. The shops and department stores in the most central location of the city with high pedestrian traffic are in demand as office space, mainly by institutional investors such as real estate funds, closed-end real estate funds, real estate investment trusts, corporations, foundations, insurance companies or pension funds, and enjoy high purchase prices. The share of private ownership, however, is also significantly high. This is due to the fact that commercial real estate or retail space in downtown real estate with poor levels of risk are often not sold, and therefore remain in the family fortune. The plots compared to office buildings also significantly smaller. Buyers of rental space or retail space in the pedestrian zone are predominantly national and international chain stores with high sales/returns enabling them to pay the higher rents. In addition, there are often well-established local family businesses with a long history.

The subdivisions of retail properties are generally as follows:

1location: principal business location in the centre of the city with high pedestrian traffic

1a-location: section with the highest footfall and largest retail stocks

1b-llocation: on the border of 1a-location, with less foot traffic and fewer road linkages

1c- and 2a-location: significantly reduced footfall, primarily retail and service, stock loosened with retail space.

City-periphery location: intensive forms of business areas, especially shopping malls and specialty stores. Located outside city’s core-areas.

Local district: catchment area of an established residential environment.

Scattered location: individual retail and service establishments, Special Offers.

The 1a-location of retail real estate can be divided further according to convenient location and consumption. The difference lies in the quality of passers-by foot traffic. Most known convenient shopping locations in Germany are, for example, Königsalle in Dusseldorf, Hohenzollernring in Berlin, Goethestraße in Frankfurt, the Neuer Wall in Hamburg and Maximilianstraße in Munich. Similar conditions occur nationwide, for example in Zeil in Frankfurt-, Königsstraße in Stuttgart, Kaufingerstraße in Munich, the Westhellweg in Dortmund, the Shadowstraße in Dusseldorf, Spitaler Straße in Hamburg, Tauentzienstraße in Berlin, and the Hohe Straße or Schildergasse in Cologne.

When selecting the location for a retail property, you also need to consider the

• Purchasing-power index
• Turnover possibilities
• Real estate index
• Chain stores
• Pedestrian traffic
• Quality of passers-by
• Whether centrally located

Buying Guides for retail properties, warehouses and stores in Germany

KARODI - The Investment Property Specialist and real estate agent from Germany is available for buying and selling of shopping centres, retail properties, warehouses and retail stores nationwide, helping you every step of the way. In particular, we are active in the cities of Aachen, Bergisch Gladbach, Berlin, Bonn, Dortmund, Dusseldorf, Essen, Hamburg, Frankfurt, Koblenz, Cologne, Leverkusen, Mainz, Munich, Munster, Neuss, Stuttgart, Solingen, Wiesbaden, and Wuppertal, and in the territory of the federal states of North Rhine-Westphalia (NRW), Hessen and Rhineland-Palatinate.