Only one third of the retail parks in Germany are in need of revitalisation

The most important result of this year’s edition of the report “Retail Parks in Germany. Competitive Factor Revitalisation.”, published by MEC METRO-ECE Centermanagement together its the partners Corpus Sireo, Dr. Lademann & Partner, GfK and TIAA Henderson Real Estate , is that only approximately one third of the retail parks in Germany are in need of revitalisation. The 100-page report on the retail park market in Germany was presented today to the public at Expo Real in Munich.

Of the more than 350 retail parks in Germany, 151 centers with over 3.2 million m² of sales area were assessed on-site by experts from GfK using a complex method and evaluated according to standardised criteria. The evaluation of the random sample brought to light a revitalisation requirement in 32% of the retail parks. “The findings were a real surprise to us, as a much higher rate has been assumed in the sector,” says the Head of Real Estate Consulting at GfK, Manuel Jahn. “This report therefore provides an important contribution to the transparency of the market,” adds COO at MEC, Christian Schröder, and goes on: “investors in particular should be pleased because this low rate means that the investments in retail parks are lower on average than was previously thought”.

Revitalisation from the perspective of Asset Management
The market report also highlights the topic of revitalisation from the perspective of investors. For this, it presents the early indicators of asset management on the one hand, on the basis of which it is possible to identify the need for revitalisation at an early stage. “In order to ensure the long-term profitability of a property, the Asset Management has to respond in good time and flexibly to a market environment that is constantly evolving,” says Thilo Wagner, Director of Property (Europe) and Fund Manager of the Henderson German Retail Income Fund.
A further article deals with the advantages of investing in a revitalised center. “Against the background of stable long-term income from a retail center, it has also been found that a good investment approach is to give preference to established locations over new project developments, whose location acceptance is still uncertain,” explains the Executive Director and Fund Manager at Corpus Sireo, Hans Stuckart.

Courts basing their decisions on a 10% presumption threshold
The report also deals with the framework conditions for revitalisation under building and planning law. During the preparation of a revitalisation, experts and jurists are playing an increasingly important role, e.g. dealing with Section 34 paragraph 3 of the German Building Code (BauGB). The Managing Director of Dr. Lademann & Partner, Uwe Seidel, explains: “During the initial phase after the introduction of Section 34 paragraph 3 BauGB it was considered that impacts, which were expected to be harmful, had to be more serious than the threshold or guide value of 10% for local authority development planning. This has changed in practical terms, since our recent experience has shown that the courts are also increasingly basing their rulings on the 10% presumption threshold also with respect to Section 34 cases.”

A summary of the most important results you will find here.