Germany’s city centres are changing. Highstreets such as Königsallee in Düsseldorf or Maximilianstraße in Munich are confronted with various challenges, starting with the trends of sustainability and entertainment to vacancies and the future of large department stores. To talk about the status quo and the future of the German highstreets, we invited an external guest: Olaf Kreyenhagen from Aachener Grundvermögen. He is responsible for the purchase of commercial real estate for the real estate investment company. Also on the microphone today are Managing Director and Head of Retail Services Christoph Scharf and Managing Director Andreas Völker.
Three facts about the episode “BNPPRE meets Aachener Grund: The Future of the Highstreets”
Retail is change: What is the significance of high streets?
Retail has experienced many issues and crises in recent years; from the boom in online shopping to Corona. Nevertheless, it became clear in or precisely because of the crises that brick-and-mortar retail and also the high streets are still needed. “The importance of the highstreets is particularly evident in the investment figures: Over 60 percent of transactions in the first half of 2024 were made in the top locations,” says Christoph Scharf at the beginning of the podcast episode. Olaf Kreyenhagen adds: “An asset class as old as ours, namely a thousand years, has a great future – in the centers of cities.”
Retail investment: Attractiveness scores, but you can’t get past the top 7
“It is no longer the size of the city that determines whether you invest or not. It’s much more about how attractive a city centre is,” explains Kreyenhagen. Nevertheless, there is still no way around the top 7. The investor is concentrating primarily on the Berlin, Cologne, Düsseldorf and Hamburg locations.
In addition, there are some smaller towns that are attractive. Heidelberg, for example, is a city that both retail experts name independently of each other. “Lüneburg and Lübeck also have an individual charm,” says Kreyenhagen.
For retailers, international players usually set the direction: Where is an Inditex, an H&M or a UNIQLO? That’s where the retailers want to go, too.
New roles for retailers and landlords in the retail market
“Retailers have clearly emancipated themselves from the landlord. They have to do more and invest, for example in construction cost subsidies. In addition, many terms have become significantly shorter,” says Scharf. Kreyenhagen points out: “From our experience, not two or years, but rather 5 years are the rule. And even after the expiry of the contract period, the dealers are not looking for new space. They are often loyal to their location and remain in a position for decades.”
In the current episode, you can find out what else has changed in the high streets, how Aachener Grund is helping to shape them and what special offers they are relying on to make the locations more attractive. So listen in now!
