Retail in Germany: German retail property remains popular

Both national and international investors still hold German retail property in high esteem as shown in the new BBE + IPH brochure "Retail in Germany 2016".

According to Angelus Bernreuther, Head of Market Research & International Affairs at BBE Retail Consulting, "supply in Germany is scarce and the competition immense." Although there is sufficient liquidity in the market, there is an acute lack of core retail property. In particular, international capital investors value the stable macroeconomic conditions in Germany. Bernreuther commented: "The mood in the market is good, but increasingly tense. Investors’ risk appetite for properties with value add and opportunistic components is still high.

"Investors would be prepared to take more risk to find the right assets. However, according to Bernreuther "dark clouds are gathering on the commercial real estate horizon". International crises, the Brexit threat and the challenges posed by the refugee crisis are giving rise to "some underlying feelings of uncertainty and nervousness amongst many investors but this is hardly affecting current investment activity". Add to this the impact of booming online-retail, which is putting the industry "under tremendous pressure as sales are not growing in physical retail formats making rent negotiations and the search for suitable tenants more difficult."

The brochure "Retail in Germany 2016" can be downloaded for free here.

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