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High Streets Report 2018

28.03.2018

COMFORT analysis reveals in-depth high street insights: growth in rents at premium locations is the exception to the rule

- A substantiated market analysis of premium shopping locations in 148 cities

- in Germany, Austria and  Switzerland

- Reliable information on retail, store, rent and consumer trends at a glance

- COMFORT City Ranking rates future viability of the 70 top shopping cities  

- Charts and location portraits in German and English.

Although the German retail sector’s turnover is higher than it has been for a long time, retailers aren’t generating every cent on the sales floor. Many retailers have embraced the digital transformation by introducing digital sales strategies and linking high street stores to digital sales channels. This has impacted the high streets because tenant requirements are now changing at a much faster rate, they often want to pay lower rents and, in some cases, they are demanding shorter lease terms. This pressure to adapt isn’t just perceptible, it’s also measurable: there has been a continuous decline in the number of cities where retail rents are rising.

This is one of the findings of the COMFORT High Streets Report 2018, which assesses rents in 148 German, Austrian and Swiss cities. In 2017, the retail framework in Germany was in better shape than it had been for a long time. According to the German Retail Association (HDE), the retail sector generated a total volume of sales in excess of EUR 500 billion in 2017 – corresponding to growth of 3 percent versus 2016. If you add price inflation into the equation, nominal growth in retail sales was more than 4.5 percent. Germany hasn’t seen growth rates like this since the 1990s. High street retail sales are still increasing, partly due to a number of brands that have made a successful transition from the online to the offline world. Despite this, retail space providers are coming under increasing pressure, not only in shopping centres, secondary and tertiary locations, but also in prime locations in Germany, Austria and Switzerland, where rents are declining.

“The rental business has become more fast-paced and complex. For years now city retail rents, especially in prime locations, have only been moving in one direction: up. That’s now changing. Today it’s the retailers who are pulling the strings,” said Olaf Petersen, Managing Director at the COMFORT Group in charge of the Research & Consulting unit, summarising the trend. Expressed in numerical terms, an upward trend in high street rents is only evident in 5 of the 148 surveyed cities. Although 60 cities managed to maintain rent levels, more than half of all the surveyed cities – 83 in total – experienced rent declines (see the following chart). In 2016, by comparison, rents increased in 8 cities, conditions remained stable in 93 cities and only 45 cities had experienced a negative rent trend.

 

Read more and Download: News Release High Streets Report 2018

 

 

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