exporeal.net - SPECIAL REAL ESTATE

The need for new developments is not just in Central and Eastern Europe, but also in the Western European countries, there is still a large undersupply with modern spaces, as well as some large regional differences within each country.

High quality, modern retail space is less focused on traditional stores, and more on shopping centres. DEGI Research notes the share as two-thirds of the total. Particularly a shift in the inner-city shopping centre can be seen in the more mature Western European markets. The long preferred principle of putting a number of smaller stores between two crowd pullers is losing significance, since it is becoming more difficult to find the respective companies who have this kind of long-term magnetic effect on customers. A newer option is the cluster solution (two or three mid-sized companies work as a magnet). Another is the triangle form with a number of retail offers along the outer edge of the triangle. However, this form requires large properties that are hard to find in city centres.

Generally, the change in retail is accelerating. Consumers are becoming more unpredictable, and it is becoming more difficult to approach them in a targeted way. Consumer is called the “hybrid consumer”, who expects high quality products and good service, and is willing to pay more for it. He also, however, is not opposed to hunting down good deals at discounters. Other aspects that play an important role in planning and investments, which PricewaterhouseCoopers notes in a study “Retail Real Estate in Germany – Return Opportunities or Grave of Billions?” are the demographic shift and migration of the countryside to the economic prospering large cities. Both of these are not just “German” issues. These affect the increasingly ageing society, the rural exodus of all European countries, albeit in varying degrees and at different times.

Other trends are the increasingly shorter rent contract terms and short intervals in restructuring space for new tenants. In other words, today, modern retail spaces are getting older faster. Concepts of tomorrow could become outdated the day after tomorrow. Add the current debate about global warming on top of that, the requirements of an environmentally friendly and resource-efficient development and maintenance will increase the requirements of retail real estate.