EW Marktbericht 187 x 305 engl - Comfort

Annual Market Report
2007/2008

Your contacts in Germany
Nationwide
COMFORT Holding GmbH · Kaistrasse 8A · 40221 Düsseldorf
Tel.: +49 (0) 211/95 50-0 · Fax: +49 (0) 211/95 50-155
eMail: duesseldorf@comfort-gmbh.de
Berlin, Brandenburg, Mecklenburg-Western Pomerania, Saxony
Saxony-Anhalt, Thuringia
COMFORT Berlin-Leipzig GmbH
Office Berlin · Kurfürstendamm 216 · 10719 Berlin
Tel.: +49 (0) 30/78 09 61-0 · Fax: +49 (0) 30/78 45 01-5
eMail: berlin@comfort-gmbh.de
Office Leipzig · Goethestrasse 1 · 04109 Leipzig
Tel.: +49 (0) 341/33 96 81-0 · Fax: +49 (0) 341/33 96 81-10
eMail: leipzig@comfort-gmbh.de
Nationwide
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Tel.: +49 (0) 211/95 50-0 · Fax: +49 (0) 211/95 50-175
eMail: duesseldorf@comfort-gmbh.de
Hesse, North Rhine-Westfalia, Rhineland-Palatinate, Saarland
COMFORT Düsseldorf GmbH · Kaistrasse 8A · 40221 Düsseldorf
Tel.: +49 (0) 211/95 50-0 · Fax: +49 (0) 211/95 50-150
eMail: duesseldorf@comfort-gmbh.de
Bremen, Hamburg, Lower Saxony, Schleswig-Holstein
COMFORT Hamburg GmbH · Mönckebergstrasse 31 · 20095 Hamburg
Tel.: +49 (0) 40/30 08 58-0 · Fax: +49 (0) 40/30 08 58-5
eMail: hamburg@comfort-gmbh.de
Baden-Württemberg, Bavaria
COMFORT Munich GmbH · Rindermarkt 6 · 80331 Munich
Tel.: +49 (0) 89/21 99 88-0 · Fax: +49 (0) 89/29 69 48
eMail: muenchen@comfort-gmbh.de
4
Publisher:
COMFORT Holding GmbH
Kaistrasse 8A
40221 Düsseldorf
Responsible for contents:
COMFORT Holding GmbH
Editor:
Annett Ehrbarth
Source for centrality indices and
purchase power data:
BBE Handelsberatung
www.comfort-gmbh.de
Idea, Concept, Design, Production:
DMG
Deutsche Marketing Gesellschaft mbH
Niedenau 78
60325 Frankfurt am Main
Print run (1.000 copies):
mt Druck
Walter Thiele GmbH & Co
Carl-Friedrich-Gauss-Strasse 6
63263 Neu-Isenburg

CONTENTS
Editorial
Location hierarchy as a success factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sustained upsurge in the letting market . . . . . . . . . . . . . . . . . . . . . . . . . 9
The German investment market:
Prices for retail real estate have peaked . . . . . . . . . . . . . . . . . . . . . . . . . 17
The renaissance of the East German city centres . . . . . . . . . . . . . . . . . . 20
Due diligence for shopping centres
now only viewed as a summary process? . . . . . . . . . . . . . . . . . . . . . . . . . 23
Project developments in prime business locations
- internal reports from a niche and insider market . . . . . . . . . . . . . . . . . 27
Federal States
Baden-Württemberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Bavaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Brandenburg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Bremen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Hamburg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Hesse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Mecklenburg-Western Pomerania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Lower Saxony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
North Rhine-Westfalia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Rhineland-Palatinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Saarland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Saxony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Saxony-Anhalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Schleswig-Holstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Thuringia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Note on graphs:
The information listed on rents in prime locations refers to new leases signed in 2007 and a standardized,
typical, ideal (fictitious) shop location of 80 to 120m 2 of pure ground-floor retail sales area with at
least six meters of display window frontage, access at ground level and without steps, right-angled
layout as well as high-end and high-quality structural furnishings and fittings.The survey included the
data from 147 different cities. The enclosed booklet on maximum rents also contains information on
rents for shop locations with retail sales area of between 300 and 500m 2 . The average rent progression
of all German cities surveyed was applied in principle as a benchmark to the rent levels of the respective
city or Federal State under examination in order to be able to better illustrate, from a graphical
viewpoint, whether the rents at the location in question had performed below- or above average in
comparison to the development for Germany as a whole.
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6
Editorial

Location hierarchy as a success factor
The dynamism with which many retail chains that have been successful at national and
international levels are expanding is impressive. Despite space surpluses – mainly in the wrong
locations, or where the locations are less in demand – and a number of competing concepts
for uses, some of which nobody needs, the demand for retail space in prime locations in
Germany is higher than it has ever been since the country’s reunification. New international
providers are rushing to the German market, system providers are suddenly perceiving
themselves as retailers and expanding into retail space, and even manufacturers who
previously viewed their role as solely that of producers are now striving to sell their goods
directly in stationary retail operations.
Our experience has taught us that in this highly competitive market, some retailers will be
unable to sustain their service concepts, but others will operate successfully. This often leads
to the question of what the secret to their success could be. What – aside from sales volume
– sets a successful retailer apart from a less successful one, if all of them are selling goods
that are similar, or even the same? They are fighting for the same customers and operate
in the same locations.
One thing all successful retailers have in common is that they operate the company as a
brand. And they do so no matter whether that company is just the big fish in a little pond
or a chain with worldwide operations. In situations in which consumers are faced with a
dizzying array of monotonously similar choices, only high brand identity makes individual
retailers (brands) noticeable and identifiable. The brand serves as a stabilizing factor in an
unstable world of choices; it is the one thing that remains the same even while it adjusts
for current developments. Thus brands generate confidence and recognition without
missing out on current trends.
The way to develop a brand leads from the development of a uniform appearance (corporate
design) all the way to a so-called corporate identity, which goes beyond the outward
features of the brand, illustrating what makes the company special and thus what
differentiates it from the competition. In the ideal case, the consumer or customer thus
forms the desired view of the company in question.
The level of satisfaction with a retail company, on the other hand, is derived on a completely
practical basis, toward the day-to-day experiences the customer has with the provider. If
the customer’s expectations are met, his or her brand affinity increases. If not, the
disappointment is all the worse. Companies that are successful over the long term have
recognized that their sales locations also serve as the company’s outward face. At this point,
the brand is no longer virtual, but rather becomes tangible. Accordingly nationally and
internationally successful retail chains set great store by the design of their shops.
While the introductions to our market reports in previous years correctly returned each
time to pointing out the essential decision-making criteria for the right location and a
successful expansion policy – namely, figures regarding purchasing power, sales volume,
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and centrality; centre hierarchy, socio-demographic data, market shares, cost synergies, the
situation with respect to competition, quality of public space, level of chain activity, etc. –
in 2007/2008 we aim to turn our readers’ attention also to the fact that, with respect to
having a strong brand, there is also a hierarchy of location that supports the brand process
over the long term. Taking into account the effects of the various functions that locations
fulfill in the development of a brand is of essential importance, particularly to retailers who
wish to expand or move into a market that is foreign to them.
Brands are created in the minds of customers, so it is necessary for customers to be able to
perceive them accordingly. The flagship stores that more and more major retail chains
have opened in recent years should be viewed against this background above all. They offer
the best opportunity to bring the entire spectrum of the brand experience to life. Flagship
stores are effective because of their size and importance. They transmit the company’s brand
message and therefore play a crucial role, particularly when a company is entering a new
market. Nike deliberately chose Manhattan as the first location for Nike Town, just as Sony
opened its first flagship store in Germany in the Sony Centre in Berlin. Vertical concepts
such as Esprit, s. Oliver, and others are also deliberately deciding in favour of locations in
major metropolitan areas such as Frankfurt, Hamburg, and Munich. Even a company like
the Hamburger Sparkasse savings bank now has an updated image, occupying a high-profile
location on the Jungfernstieg in Hamburg in order to dominate the scene in the public eye.
The cosmopolitan city buildings designed for department store Peek & Cloppenburg, each
of which is conceived as a unique world of experience that takes both the company’s
tradition into account as well as taps into new customer groups and sources of income, are
also to be understood against this background. Flagship stores function as lighthouses in
a retail company’s location policy.
Successful retailers choose locations where their clientele is to be found in particular. In
general, they locate where the brand echo is greatest due to the presence of their customers.
These image or scene locations are generally more tightly focussed than the flagship
locations because they are tailored exactly to the needs of their customers. Thus the few
true luxury locations in Germany – Neuer Wall in Hamburg, Kurfürstendamm (near
Bleibtreustrasse) and Friedrichstrasse in Berlin, Königsallee in Düsseldorf, Goethestrasse in
Frankfurt, and Theatinerstrasse and Maximilianstrasse in Munich – are naturally preferred
by luxury providers and fashion designers. Even in major cities such as Stuttgart, Cologne,
and Hanover, true luxury locations are rather more rudimentary and do not, on the whole,
play a major role among prime locations in these areas on the whole. On the other hand,
trendy, scene-oriented brands view locations such as the Hackescher Markt in Berlin,
Ehrenstrasse in Cologne, Schwabing in Munich, or the Karolinenviertel in Hamburg as true
image locations that are accordingly in demand. A presence in such locations reinforces
the brand and transmits and multiplies its image via the audience that is there.
The most important stores are located in the top locations/supporting pillars. These stores
are placed where there is sufficient demand, meaning, depending on the form of their
offerings, in prominent city centre locations with high traffic, purchasing power, and
centrality. These top locations/supporting pillars are intended to merely create an anchor
8

for the locations falling in the flagship or image/scene location categories without competing
with them. These are the locations where the retailer has the greatest sales potential.
Locations in shopping centres and “shop-in-shop” spaces in large-format retail stores should
be seen from the point of view of retail agglomeration. “Everything under one roof”
attracts a corresponding number of customers, thereby also making full use of the benefits
of this environment. Here, the retailer does not work on its own, but rather as a member of
a larger team. Every company must decide for itself to what
extent its brand is compatible with this kind of presentation.
The location hierarchy is therefore of great significance to
the positioning of a brand in the market. In the long term,
careful selection of locations can contribute a building
block for a company’s success. As we have shown, something
can be a good fit for one company but not necessarily for
another. Many domestic and foreign concepts have failed
when faced with the German market because they did not
take this into account when selecting their locations. Here,
too frequently, speed was prioritized over quality.
Sustained upsurge in the letting market
Günter Rudloff,
Managing Director
In parallel to the lasting upsurge in the investment market for real estate used for retail,
the letting market is also continuing to grow. Particularly the market for retail space in
traditional prime locations in German city centres is developing dynamically and benefiting
from both the real estate boom and a stable upward trend in the retail sector. The main
reasons that should be mentioned for this first are rather “soft” factors, such as a clear
improvement in business prospects and peak values in consumer sentiment and confidence.
The head of the market research institute, GfK (Gesellschaft für Konsumforschung), Klaus
Wübbenhorst, is even expecting further improvement in consumer sentiment in the second
half of 2007. “We don’t need to worry,” he says,“consumer sentiment will be pleasing to
us.” And considering the pull of the overall growth of the economy and the positive
development in all hard consumer-related data, the upward trend in the retail sector will
also undeniably be sustained. In detail:
1. Sustained economic growth
After several interim upward corrections, experts currently assume an economic growth
for 2007 of 2.5% and above. More and more economists also see a robust long term trend
that could level off at about 2.0 to 2.5%. Increasingly, the recovery is being supported by
domestic demand.
2. No shocks:
None of the many dark scenarios predicted in the run-up to the increase in value-added
tax have come to pass. Although the retail industry overall sustained slight losses of a nominal
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0.8% at the beginning of 2007, retail trade in textiles, clothing, shoes, and leather goods
posted a nominal increase of 2.7% (source: HDE). There is a general upward tendency across
the industry. In addition, the German economy is booming despite the high euro exchange
rate and high price of oil.
3. Budget consolidation:
Current estimates assume an increase in government revenue of approximately 180 billion
euros by the year 2011. The Federal government, Federal States, and municipalities should
therefore be capable of acting again in the future.
4. “Job miracle”:
One of the most pleasing effects of the overall economic upsurge is the drop in
unemployment, which could fall next year to less than 3.5 million people, the lowest level
in ten years. By comparison, the number of unemployed was still above five million in
February 2006. Conversely, it should be noted that one million more employed people brings
the retail industry about 1.5% growth in sales!
5. Development of sales in the German retail industry:
Negligible sales growth of about one percent nominally in 2006 as well as a considerably
lower savings rate balance out the fact that in 2006, as in previous years, the retail industry
overall lost additional market share to private consumption.
Rents in prime locations are rising:
Broken down to the letting market for retail-use
properties in classic prime locations, all of this has
resulted in rents having risen substantially in nearly every
area throughout Germany. After carrying out a survey
of current rents, COMFORT has determined that rents
in the classic prime locations in the 147 most important
cities in Germany have risen by an average of more than
8 percent over the previous year. Not since the country’s
reunification has there been an increase of this
magnitude.
Concentration on chain stores:
Ultimately, the rent increases that have taken place are
naturally also the result of markedly increased
competition for vacant retail space in prime locations. The strongest demand originates
with nationally and internationally successful chain stores. As for as the industries are
concerned, textile-related concepts make up the lion’s share of the demand; within this
field, in turn, the “young fashion” providers lead the way. Following them are sectors such
as small-area telecommunications providers, chemist shops, chain bookstores, and,
increasingly, organic supermarkets. The rest of the demand is split among providers of shoes,
luxury goods, and accessories. The major national and international fashion brands, in
particular, are further fuelling the demand for stores in top locations, and with it rents for
10
Development of rents in the metropolitan cities
in comparison to the entire country
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006 2007
Metropolitan cities 80–120 square meters
Metropolitan cities 300–500 square meters
Germany 80–120 square meters
Germany 300–500 square meters

these kinds of properties, because these brands are not
deterred even if landlords charge rates that, viewed
objectively, are exorbitant.
Traditional chain stores and newcomers
Hennes & Mauritz is a traditional representative and a
newcomer at the same time. The Swedish market leader
has successfully launched its premium brand, COS, on the
German market. The first six stores are located on
Kurfürstendamm and Hackescher Markt in Berlin,
Weinstrasse in Munich, Neuer Wall in Hamburg,
Königsallee in Düsseldorf, and Königstrasse in Stuttgart.
At the same time, traditional H&M stores are increasingly
setting their sights on smaller and medium-sized cities.
H&M is additionally reinforcing special concepts such as
“H&M Men” and the “Beauty” stores, and other special
concepts are in the preparation process.
The reinvigorated textile provider, C&A, is also on course for expansion, planning to increase
the number of its German branch locations to over 400 in the medium term – and to do so
both with locations offering full assortments as well as with “small family” and “kids”oriented
stores, which is why the company is increasingly also seeking out smaller and
medium-sized locations.
Munich, Weinstrasse 3, COS
“The new luxury brand of Hennes & Mauritz”
Berlin, Tauentzienstrasse
Frankfurt a. Main, Zeil
Hamburg, Spitalstrasse
Cologne, Schildergasse
Munich, Kaufingerstr./ Neuhauser Str./
Marienplatz
0 50 100 150 200 250 300
2002 2003 2004 2005 2006 2007
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Despite the announcement by the Spanish commercial group, Inditex/Zara, that a further
five Zara stores would open in Germany in the second half of the year – to date, it operates
57 Zara stores and six Massimo Dutti stores in this country – the group’s expansion in
Germany is somewhat restrained in comparison to its extremely ambitious worldwide
expansion goals. We can currently do no more than speculate as to reports that a number
of additional concepts from Inditex are about to be launched in Germany.
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The young fashion
specialist, New Yorker,
plans to open 20 new stores
in Germany in the short
term. Women’s clothing
concept, Ann Christine,
opened its highly anticipated
pilot store in the best
location in Braunschweig
with a retail area of
approximately 900m2 .
Douglas Holding AG is
expanding in Germany,
Munich, Kaufingerstrasse 13, C&A
particularly with the Thalia
“A tradition-rich chain which is expanding strongly”
Group. As of July 1, 2007,
the company split from
four of the total of six branch locations of jewellery brand, René Kern. With the sale, Douglas
is focussing its activities in the jewellery segment on the brand Juwelier Christ, which
currently has about 200 specialist shops in Germany. Men’s clothing chain Pohland is still a
question mark. As for the Appelrath & Cüpper concept, modernization or consolidation is
probably the next step that is called for.
Telecommunications providers such as O2, e-plus, and Deutsche Telekom, but also The
Phone House and Arcor, are once again expanding strongly. While their shop areas are
typically relatively small, this sector is, however, a clear leader when it comes to the sheer
number of new leases signed.
The major drugstores remain active. Rossmann plans to open another 120 new stores in
Germany this year. Drugstore group, Müller, intends to expand its network of chain stores
by another 70 branches. Another company that is on course for very strong expansion is
dm. Schlecker, which with its frequently small, poorly arranged stores, could come under
some pressure.
The shoe chain, Görtz, is going on a large-scale offensive, particularly with new “Görtz”format
stores, some of which occupy more than 2,000m2 of space. The “Görtz 17” concept
has been given a new shop design; as flagship stores, spaces of more than 400m2 are
possible for this format, as in the store on Hohe Strasse in Cologne. Market leader Deichmann

plans to open more than 60 new stores and modernize 100 existing branch locations in
Germany in 2007. At the same time, however, it plans to close more than 30 stores in favour
of improved locations.
s. Oliver, Mango, Esprit, Mexx, and Gerry Weber are also on the rise with their mono-brand
stores. The same also applies to the young fashion specialist, Bestseller, with its brands, Vero
Moda and Jack & Jones. After a year without opening any new stores, textile chain Xanaka
is also expanding again, with plans to add 45 stores to its network in Germany by 2012.
Alongside the aforementioned traditional tenants, predominantly from the textile industry,
some other chain stores sometimes get short shrift. And yet, for example, the success of
Ernsting’s family, which now has more than 1,240 stores, making it one of the largest
fashion chains in the world, is worthy of note, as is the success story of men’s fashion specialist,
Engbers, which has plans for 350 to 400 new stores in Germany in the long term.
New demand may come again from abroad. According to reports, Brooks Brothers and Urban
Outfitters are thinking about entering the German market. After its opening in London,
Abercrombie & Fitch is right on the doorstep of Continental Europe, and rumour has it that
expansion in Germany by Banana Republic, a distribution channel of the Gap group of
companies, which has not been very successful in Germany thus far, is not ruled out. Apple
is already active in Germany and has found an appropriate location on Rosenstrasse in Munich
for an Apple retail store. Additional metropolitan areas are due to follow.
Newcomers and new concepts from abroad:
The lasting boom in demand for retail space in Germany is thus not only – as in the past –
driven by the traditional, established chain stores, many with vertical structures. The large
number of foreign newcomers also stirs activity.
• Filippa K, from Sweden, has plans for three to four additional stores after the openings
in Düsseldorf.
• Camel Active plans to open additional stores of its own via master licensee CMLC.
• The French fashion label, Comptoir des Cotonniers, after renting premises in Nuremberg
and Berlin, is further expanding its network of branches and shop-in-shop locations. The
mother/daughter concept constitutes the spearhead of the Japanese commercial group
Fast Retailing, in Germany (its best-known concepts or brands are Princesse tam.tam and,
above all, Uniqlo).
• Swedish fashion provider, Nudie-Jeans, plans to open its first store in Germany shortly.
• The new label from couturier Wolfgang Joop, Wunderkind, is expanding in Germany. The
first Wunderkind boutique has opened on the Gendarmenmarkt in Berlin.
• Italian fashion label, Guess, is now represented in Germany by locations in Cologne,
Stuttgart, Frankfurt, and two in Munich.
• Marlies Bekkers, the Dutch lingerie designer, is looking for appropriate locations, preferably
in the major cities.
• The Danish fashion provider, Blend, plans to open an additional five franchise stores by
the end of this year.
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• An important new player is the chain, TK-Maxx, which belongs to the U.S. group, TJX.
The chain’s first store in Germany is located in the former Harburg-Centre, which has been
converted to the Ring-Galerie, and occupies about 2,800m2 of retail space.
The french section continues to strengthen:
• 1.2.3./Etam, like the leather and sportswear label Redskins, is planning to expand in
Germany.
• Clothing chain, BCBG Max Azria, hopes to conquer Germany with its brands, Manoukian
(via partners) and BCBG (with stores of its own).
• Soleil Sucré, a lingerie chain, is due to open its first store in Germany in Cologne.
Other noteworthy newcomers include:
• Lily und Lex, a provider of ladies’ fashion and accessories, has found an area on Mittelstrasse,
in Cologne, for its first German shop.
• The accessory chain concept, Accessorize, which belongs to the British Monsoon Group
• Belgian sportswear label, Riverwoods, (after the opening of two pilot stores, one in
Oberhausen and one in Frankfurt, an additional ten stores in prime locations, preferably
in metropolitan areas, are due to follow by 2009)
• Fossil, the manufacturer of watches, sunglasses, small leather goods, fashion jewellery,
and accessories, opened its first German flagship store on Hohe Strasse in Cologne in the
Spring of 2007; further new openings have been announced
• Noukie’s, from Belgium
• Balizza, from Turkey
• Change of Scandinavia, from Denmark
• Chicoree, from Switzerland
• Noa Noa, from Denmark (the fashion provider has opened its seventh mono-brand store
in Germany, at Ettlinger Tor in Karlsruhe)
• Friis & Company (after the opening of the pilot store in Hamburg, about 25 franchise stores
are scheduled to be added in the next two years),
• American Apparel (which is now represented by ten chain stores throughout Germany)
Added to this are a number of new retail chains from Poland. Also not to be forgotten in
this context are the Dutch chains, which are represented on the German market by names
such as Score, Cool Cat (the fashion provider is beginning its German expansion in Essen),
Gaastra (following the opening of its pilot store in Husum, the sportswear label plans to
expand further, especially in the north of Germany), and The Sting (the young fashion
provider has now leased various locations, laying the foundations for its market entry
in Germany).
New concepts and demand drivers from Germany:
Spurred on by the strong competition from abroad, a variety of German companies are
also active in the market for the first time or with new concepts. The men’s clothier, SØR,
for example, is testing a new store concept for women in Berlin. There are plans to expand
on the concept if the pilot store is successful. The Otto Group is practically placing one
stationary concept after another; the current one is the lingerie concept, Lascana, whose
14

first flagship store opened on Flinger Strasse in Düsseldorf, with approximately 450m2 of
space. Added to this are the premium brand concept, Brandneu, and the high-end ladies’
wear concept, Apart. Following the opening of its pilot store in Bocholt, Zaffiri, a new concept
from Heidemann GmbH, plans to open three to five additional stores by the end of 2007.
The Heidelberg company, Trend Trading, plans to expand further on its women’s wear line,
Art to be, after opening its first store in Mannheim; its preferred locations are Munich,
Nuremberg, and Düsseldorf. The Berlin young fashion chain, Picaldi, plans to expand
throughout Germany with its own stores. It aims to have over twenty stores of its own within
the next ten years, preferably in prime locations in the top cities. The chain currently
operates four franchise stores outside of Berlin, in Hamburg, Bremen, Hanover, and
Braunschweig. And lastly, premium lifestyle bags from Jost are now also being sold at the
new pilot store on Hackescher Markt in Berlin.
Restaurant chains also expanding:
A variety of foodservice concepts, some of which have already been introduced and some
of which are completely new, are also continuing to expand. Along with nearly every
coffee house chain, companies such as Aran (the Rosenheim franchise chain now has over
14 locations in Germany), Australian Homemade (8 chain stores throughout Germany),
Suppenküche (the Munich company plans to expand throughout Germany on the franchise
system), Zeiss, the bistro chain Cento, Subway, Kochlöffel, Bagelstation, various pizza chains,
high-end chain restaurants such as Vapiano, and last but not least, steak houses such as
Maredo, are also worthy of mention.
Banks once again seeking retail locations:
The banking sector is also once again active in prime locations. Along with the Dutch/Belgian
finance group, Fortis, which has been expanding strongly with its Fortis Credit4me shops
since 2006 and plans to extend its network of locations to about 100 by the end of 2007,
the following providers who are already present, are also looking for commercial space in
the city centres.
• Citibank, which is planning new branch locations, especially in Berlin and in the suburbs
of major cities;
• HVB, which is increasingly expanding in the Rhine-Main Region;
• Commerzbank, which is planning new branch locations in Hamburg;
• Volksbank, which is looking for 20 new locations in Berlin;
• the Karlsruhe Badische Beamtenbank, which plans to expand its network of branch
locations from 92 to 107 by 2010;
• Sparda-Bank, which intends to open five new branch locations in Berlin; and
• Norisbank, recently renamed Teambank, whose expansion agenda includes 60 new
branches in Germany.
Sustained boom among the vertical chains:
To make the actual magnitude of the current expansion boom clear, the vertical partnerships
between industrial companies and the retail trade must also be mentioned in this context.
Self-operated stores are becoming more and more important in the verticalization process,
15

particularly in the fashion industry. Many brands or manufacturers are only at the beginning
of their retail activities and use their stores not only to boost sales and reinforce the brand,
but also to accumulate experience and be able to develop partnership concepts. There are
numerous examples of the increasing verticalization that is taking place:
• the Italian label, Geox
• the Danish shoe producer, Ecco
• the fashion producer, Seidensticker (which initiated its expansion with the first store of
its own, at the Nova Eventis centre)
• the fashion brand, Brax (after the opening this Spring of the first chain store of its own,
in the Alstertal shopping centre in Hamburg, two to three additional stores are to follow)
• women’s wear provider, St. Emile (which has completed its entry into the retail business
with its own stores in Frankfurt and Cologne)
• the clothing company, Eterna Excellent (which is starting with its own brand shops in
Cologne)
• the classic fashion producer, Delmod (three Delu stores have been operated jointly with
Lucia so far and six new stores are due for opening by the end of this year)
• the jeans wear producer, Mustang (which intends to have opened 19 stores by the end
of 2007)
• the shoe producer, Gabor
• the fashion provider, Daniel Hechter (intends to invest massively in new shop-in-shop
locations and stores)
• the textile specialist, Carlo Colucci (which currently operates twelve stores of its own).
Exitees:
Alongside the broad front of advancing newcomers and new concepts, the number of
companies exiting the business carries hardly any weight, at least as far as demand is
concerned. Some prominent examples:
• Helly Hansen (the Norwegian sporting goods provider is closing all its German stores)
• Lindex (the Swedish clothing chain has now withdrawn completely from the German
market)
• Wal-Mart (all 85 self-service large-format retail stores have been taken over by Metro AG)
• Werdin (taken off the market by Spanish parent company, Cortefiel; all 34 stores will be
closed or converted to Springfield or Women’s Secret locations)
• in addition, a number of collections are being discontinued; examples include Joseph Janard
and shoe provider, Stephane Kélian.
Conclusions:
1. The widely expressed fear that, as PricewaterhouseCoopers (PwC) put it at the 2007 German
Commercial Real Estate Congress, whole shopping streets and city centres will become
interchangeable through the progressive advance of chain stores, losing their identity and
consequently also their draw, is baseless in this form in light of the numerous, differentiated
new demand drivers that are present. In the long run, the developments outlined above
will hardly give rise to the risk that premium locations will lose their attractiveness.
16

2. The focus on highly desirable areas of prime locations
that has been noted in the past continues. Now, however,
there is once again increasing demand for outlying sections
of prime locations, where there is a real possibility of
transformation into true prime locations if suitable tenants
move in subsequently. The large number of new providers,
combined with the enhanced efforts that companies
already established in these locations are making toward
expansion, is leading to numerous new leases in such
locations. Examples of this are mentioned in the report on
the Munich market.
3. Trends, tenants, and concepts in the retail industry are
shifting more and more quickly. The result is that the cycles
for modernization, refurbishment, or possibly even demolition and reconstruction of a retail
property are becoming shorter and shorter. Especially in the case of new construction, it is
therefore necessary to ensure that the property built is flexible and can be adjusted to the
requirements of a new tenant or concept without great effort and expense.
4. Another sustained trend that is increasingly observed among many providers is trading
up. This has sometimes led to completely new concepts and brands. Noteworthy examples
of this are COS (Hennes & Mauritz) and Ann Christine (New Yorker).
The German investment market:
Prices for retail real estate have peaked
In 2006 and 2007, retail real estate took another step forward in its career. Investment
properties, which are always sought after by both private and institutional investors,
experienced a demand boom of unprecedented proportions. Supported by a capital market
environment that continued to be favorable, with interest rates hovering at historically
low levels, an improved labour market situation, clear
economic growth, and a significant positive development
Development of real estate investments
in Germany from 1996 through 2005
of the retail industry’s sales volume, institutional
Total return, in percent
investors with globally oriented portfolio strategies are 6
once again focussing on German retail real estate. The 5
transaction volume for German commercial properties 4
easily doubled in 2006 over 2005. Where the figure for
3
2005 was still 21.3 billion euros, the volume rose to 43.7
2
billion euros in 2006. According to the findings from the
1
first half of 2007, a further increase of 10 to 15 percent
0
can be expected.
It is worth noting that 2006 marked the first time that
more retail properties (19.5 billion euros) than office
Manfred A. Schalk,
Managing Director
as per
3 years
p.a.
Commercial space
Offices
as per
5 years
p.a.
as per
10 years
p.a.
Shopping centers
All properties
17

properties (19.0 billion euros) changed owners. The fact that about 65 percent of all major
commercial investment deals reviewed in 2006 were realized by foreign financial investors,
such as private equity or opportunity funds, seems less astonishing. About 21 percent of
the volume in the commercial investment segment is allocated to other foreign investors,
and only about 14 percent of the capital invested is attributable to German groups of
investors. (DIP analysis, 2007)
Demand remains high among UK and U.S. investors, and in this respect above all among
British investors, whose focus in Germany is predominantly on shopping centres, specialist
stores, and consumer goods and grocery stores. But the traditional commercial building
located in a city centre also remains paramount for the majority of foreign investors,
including, in particular, English, Dutch, Scandinavian, and Irish investors. Along with the
positive interest difference, the purchase prices that are asked for German retail real estate
still seem extremely favorable to investors from the United Kingdom, Ireland, and the United
States. Along with traditional portfolio real estate, project developments involving new
construction and new leases are also among the preferred properties in this segment.
Due to the improved economic development in Germany and to the rise in rents that has
accompanied it, retail real estate is considered one of the safest, most lucrative investments.
The calculations still work out, and the gap in revenues formed by the difference between
real estate revenue and financing rates is closing only slowly. Revenues from rent income
make up for rising multipliers and purchase prices, still compensating in most cases for
borrowing costs even at indebtedness rates of nearly 100 percent. After the increase in
financing interest rates within the Eurozone to a good 5 percent in 2007, the positive revenue
spans for top real estate are dwindling in many markets. Most of the foreign purchasers
who invested in Germany early, such as private equity funds, opportunity funds, investment
banks, and hedge funds that, viewed from a practical standpoint, actually did not conduct
real estate transactions, but rather financial deals, have already parted from their real estate
again. In extremely short periods of just two to three years, Morgan Stanley, Lonestar,
Cerberus, Corpus, Fortress, Babcock & Brown, Blackstone, Goldman Sachs, and others were
able to reap substantial profits from the development of the German market.
Investors under extreme control from borrowed capital are now also focussing on the
countries in Eastern Europe. Because further interest rate increases are expected both in
the United Kingdom and in the Eurozone, the short term development in this direction is
foreseeable.
However even if investors financed through borrowing are less competitive in a market with
rising interest rates, there are still a number of other investors who could fill this gap directly.
Indirect funds are still accumulating equity and have immense sums of capital that need to
be invested. In 2006 and 2007, indirect investments by insurance companies, pension funds,
and capital investment institutions via special funds, real estate companies, and REITs
continued to rise. These institutional investors are becoming increasingly important. In the
medium term, this trend will be augmented by capital from China, Japan, and the Middle
East as well as from funds that manage, for example, Asian and Russian government monies.
18

In light of the considerable sums of capital in Germany and abroad, in conjunction with a
clear surplus of demand, purchase prices remain at a high level despite rising interest rates.
Particularly sought after are large-volume properties and homogenous portfolios. Smaller
packages with non-homogenous structures, on the other hand, are no longer considered
among the highly prized additions to a portfolio; instead, investors prefer to separate these
items and accept them only on a selective basis.
Acceptance of the bidding process, which lately had become rather the rule, is also dwindling.
Non-transparent, poorly managed bidding processes involving several steps, in particular,
frequently do nothing more than tie up resources and incur audit expenses. By contrast,
we are once again increasingly seeing targeted sales of individual properties in competitions
that are professional and restricted at the same time, and in some cases also, strategic offmarket
deals that foster long term customer contact once more instead of only being
concerned with the bottom line.
For a number of German institutional investors, approval from experts is absolutely necessary
for purchases of top real estate that is sold at the highest pricing level due to the competition
with foreign investors. In competition, this, of course, means an additional hurdle to be
overcome, because depending on the type of real estate, local experts cannot in good
conscience consider all of the investments sought as being sustainable. In particular, the
level of pricing for the specialist, consumer, and grocery stores that are in heavy demand
on the international side is currently extremely overheated and must be viewed critically
when it comes to the long term. High demand notwithstanding, not all retail real estate
automatically stands for quality and sustainability. Even if the average performance of retail
real estate shows relatively low volatility as compared to other types of real estate, such as
office properties, the traditional investment in a prime location in the right city still remains
probably the safest and most lucrative investment.
The renaissance of the city centres as retail locations, which has been ongoing for several
years now and is evidently a sustained trend, bolsters and supports the purchase prices asked
by owners as well as the level of acceptance of those prices on the part of purchasers and
their experts, who generally view investments with a critical eye. The return of shopping
centre developers to the city centre, which has been observed for several years, also does
not necessarily have to be detrimental to traditional properties located on pedestrian
areas. Of the nearly 50 shopping centres in the planning or construction stages from 2007
through 2010 in Germany, about 80 percent will be located in city centres.
Depending on a centre’s structure (open or closed), they way in which it is connected to
the traditional retail locations, and above all, its dimensions, such a project can either be
a retail-specific complement to the city centre and thus have a stabilizing effect on
property values or – as is frequently the case with closed ECE projects – bring about crushing
declines in property value for whole swaths of the city centre. For long term success,
it is therefore absolutely necessary for buyers to obtain dedicated, comprehensive
advice and analysis from a retail real estate professional before purchasing traditional
prime properties.
19

In summary, it can be presumed that the dynamics in the retail real estate investment market
will remain in place throughout 2007 and probably in 2008 as well. Among purchase price
factors, which easily grew by a factor of one again from mid-2006 through mid-2007, no
further significant increases can be expected at this time. With sustained high demand from
foreign investors, and increasingly once more from German investors as well, investments
will be made more selectively again in the future, while
pricing remains at the same high level. The quality, location,
and structure of a retail property will once again become
increasingly important. However the search for properties
that do not yet offer upscale potential also remains exciting
and will maintain its status as the primary task of all project
developers in this field. The competition for top city-centre
properties and properties with added value will continue
to dominate the retail real estate market in Germany in
2008. It is, however, rather unlikely that purchase prices
and factors will continue to rise as they did in 2005 and
2006; increases of this nature will be observed only in
Jürgen Kreutz,
isolated cases.
Managing Director
The renaissance of the East German city centres
In the Gold Rush-like period of euphoria which followed the collapse of Communism in the
east of the country, specialist store centres rose up in outlying urban and suburban areas.
Most of these centres are now oversized with respect to the current demographic
development and compete massively with the trade structures that have emerged in the
city centres. It is well known that in terms of per capita supply of shopping centres to the
population, Germany as a whole is imbalanced. In the east, there is still a clear surplus supply
of centre retail space, while purchasing power remains markedly below the countrywide
average. The centre boom in the states of the former East Germany is now, however, a thing
of the past. New shopping centres are being developed almost exclusively in integrated
city centre locations.
The best-known recent examples are the Kröpeliner Tor Centre, in Rostock
(Tenkhoff/20,000m2 of retail space), the Alexa, on Berlin’s Alexanderplatz (Sonae/35,000m2 of retail space), the Centrum-Galerie, in Dresden (MDC/40,000m2 of retail space), and the
Brühl-Arkaden, in Leipzig (mfi, 24,500m2 of retail space), all of which are under construction.
Investments have been made in the city centre of Magdeburg as well, with the expansion
of the Allee-Centre (ECE) by 10,000m2 to its current 30,000m2 of retail space.
In the city centre of Cottbus, likewise in an integrated location and just a stone’s throw from
the pedestrian area, Gepro Projektentwicklungsgesellschaft is developing its project Carl-
Blechen-Carré, with about 15,000m 2 of retail area. This project is also tremendously important
to the revitalization of the city centre of Cottbus, because customers currently still prefer
to drive to the Lausitz Park and Cottbus Center shopping centres located on the outskirts
20

of the city and to the Spree Galerie, which is located in
the city centre, but too far from the pedestrian area.
Average shop rents in prime locations
in Eastern Germany for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
With only a few exceptions, many East German city
centres that are regionally significant as retail industry
50
locations and were largely spared serious destruction
40
during the Second World War, were also spared the
30
blight brought on by project development in outlying
20
urban areas. This applies particularly to the cities of
10
Rostock, Erfurt, Halle an der Saale, and Potsdam. Leipzig
0
also bears mention in this context, because although
2002 2003 2004 2005 2006 2007
large areas of the city suffered in the war, its historic
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
construction and urban structure remained intact.
Leipzig, with its many large-scale building projects, is
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Eastern Ostdeutschland Germany
currently the site of the most significant revitalization of a city centre location in eastern
Germany. With the completion of the new Karstadt building, Galeria Kaufhof, and the
Breuninger department store, Leipzig has risen to become the top ranking location of all
the retail cities in eastern Germany.
Following extensive modernization, Zwickau, with Innere Plauensche Strasse, and Weimar,
with its Schillerstrasse and Wielandstrasse, have also established nearly the entire commercial
portfolio of extraordinarily attractive city centres.
Locations that were more severely destroyed in the war, such as Dresden and Magdeburg
in particular, are still somewhat behind the locations mentioned above, because it has not
yet been possible to complete the full extent of the necessary repair measures to the city.
This is the case with Dresden, with the enormous construction site for the so-called Centrum
Galerie, but also with the construction that has been taking place on the Wiener Platz for
many years now. It also applies to Magdeburg, where the “Blauer Bock” project, at the
intersection of Breiter Weg and Ernst-Reuter-Allee, has been waiting for years for the
green light to start construction work. And still, the Marietta-Quartier, with its 10,000m2 of retail space, is an important construction project that has been completed here, on the
east side of Breiter Weg.
Jena, also, after suffering widespread destruction during the war, has established a new
prime location through the complete reconstruction of the Löbdergraben, which now
connects the Holzgraben and Markt traditional shopping locations.
The willingness of numerous local and regional investors to invest in city centres in eastern
Germany is also impressively evident from the situation in locations such as Stralsund,
Görlitz, Stendal, Wernigerode, and Halberstadt. The volume of demand for retail space in
Stralsund is currently significantly greater than in Schwerin, for example, where a completely
oversized shopping centre located in the city centre has for a long time quashed demand
for spaces in the pedestrian area. The impending construction on the Rathausplatz in
Stralsund will close the last gap in construction in the city centre prime location of
60
21

Ossenreyerstrasse, with the result that the old city will soon be presented to customers as
a self-contained retail location with a great deal of charm.
The city centre of Halberstadt has also been reconstructed in full to its historic measure
after extensive destruction during the war. The city has succeeded in upgrading the
traditional commercial space surrounding the market with attractive businesses, department
stores, and a shopping centre. Cities with shopping flair, such as Stendal and Mühlhausen
in the Federal State of Thuringia, which also have a high level of centrality, draw numerous
customers from broad surrounding areas and are also subject to high demand for space,
which is reflected in rising rents.
Rostock and Potsdam provide impressive examples of the development of rent pricing. While
rents for small shop spaces were only 51 and 36 euros, respectively, per square meter in
these cities in 1999, rents have now climbed to 80 euros per square meter in Rostock and
70 euros per square meter in Potsdam. The development of purchase price factors in this
period was also extraordinarily dynamic. In 1999, commercial buildings in Leipzig and
Dresden sold at factors of between 11.0 and 11.5, but now factors of between 14.0 and
16.0 can be realized in these locations.
On the whole, therefore, the city centres of eastern Germany have developed remarkably
well for the retail business. However, we should not neglect to mention serious errors in
development, such as the construction of an ECE shopping centre in Schwedt an der Oder,
as well. The centre in Eisenhüttenstadt is another example of how an absolutely dominant
shopping centre in a non-integrated location (in this case a specialist store centre from Metro)
hampers the development of the city centre.
In summary, however, the case remains that most of the retail shopping cities of eastern
Germany have succeeded in recent years in applying the right policies and making major
investments to create attractive city centres that draw
numerous regional and national commercial enterprises
and satisfied customers. Owners of commercial space in
locations such as Dresden, Leipzig, Erfurt, Potsdam, Rostock,
and even medium-sized towns such as Stralsund, Stendal,
Weimar, Jena, Zwickau and Mühlhausen (Thuringia) can
expect values to continue to rise in the future as well. The
often-underestimated locations of Chemnitz and Halle an
der Saale are currently on the upsurge when it comes to
decisions to invest and open locations there. The moderate
growth that took place in the past and good overall
economic conditions mean that the potential for value
Ronald Steinhagen,
increases is particularly high in these areas.
Managing Director
22

Due diligence for shopping centres now only viewed as a
summary process?
Shopping centres of all levels of quality and sizes are among the investment properties most
highly sought after by national and international investors. In a market that is at least hot
or, depending on one’s point of view, even overheated, more or less anything even vaguely
resembling a shopping centre is being bought – and at factors that no one would have
believed remotely possible just two or three years ago. More than a few of the properties
that were bought in the past 12 to 18 months at factors that were high for the German
market at the time have, in the meantime, been resold at a further mark-up, in some cases
a mark-up equivalent to several years’ rent.
This run on shopping centres follows less from endogenous and more from exogenous
demand. There is actually no reason to assume that shopping centres today are better
products than in the past. The sales of even problem-ridden shopping centres that often
languished, unsaleable and unloved, in large real estate portfolios are rather an indication
that purchasers, faced with pressure from high investment sums and extremely hot
competition for properties to purchase, put speed somewhat before a solid examination
of the property to be purchased. In several cases, investors were even knowingly willing to
assume incalculable risks in order to meet the specifications for the monies invested to any
degree at all. The strategic focus of many investors on shopping centres is doubtlessly also
reflected, however, in such centres’ markedly lower volatility as compared to office real
estate. The anticipated positive trend in consumption among the German population,
which has already materialized in part, is also conducive to demand.
Lucrative times for sellers, tense times for investors. While the bulk of the transaction
properties will probably continue to meet buyers’ expectations in the future, the risk of
mispurchases and incorrect assessments rises drastically in fast markets like the current one.
Because a shopping centre is one of the most complex forms of investment and a complete
overview of a shopping centre is possible only at great effort and expense, we wish to address
a few of the essential points that must be addressed in evaluating these properties and
must not be allowed to vanish from view even when the due diligence process is necessarily
shortened.
Because real estate is the original kind of immovable property, location plays an essential
role for shopping centres as well. One of the most important factors in this is not at all the
location itself, but how accessible it is. Locations that, despite signposting, can be found
only by applying every ounce of directional sense or with the aid of a navigation device
after waiting at five traffic lights in a row should be rejected right away. If customers can
reach a destination only with difficulty, even the best offerings will not manage to bring
in the sales volume necessary for operations that are successful in the long run. Despite the
mainly overwhelming importance of individual traffic, locations must also have an attractive,
rapid connection via public transport. Locations served only by taxis or buses that run only
at long intervals cannot under any circumstances be said to have sufficient transport
23

connections. In addition, locations that are free of planning and zoning problems are
beneficial in any event. If every change or market adjustment of the property necessitates
formal passage of new planning or zoning laws, the increasingly labour-intensive process
involves a substantial risk that planned and necessary measures will not be approved or
will be approved only subject to restrictions. A location in a core area provides considerably
more planning security in this respect. These locations also typically do not present any
problems if, in the extreme case, they are switched from retail to other uses.
Another crucial factor in a shopping centre’s value is its legal structure. While full owners
can base change decisions on the needs of the property, partial ownership leaves open the
possibility that just one co-owner can massively impede or even prevent necessary changes.
If commerce truly means constant flux – and it does – a co-owner that blocks changes means
that the centre cannot react appropriately to changing requirements. Even in the case of
full ownership, however, the owner’s freedom of motion can be restricted to an intolerable
degree. Easements and land charges can be so restrictive that despite full ownership, the
freedom of disposition that is necessary for the changes can hardly be granted. Particularly
for reasons of economy, or where high one-time settlements apply to rights granted to
neighbours on the owner’s own piece of property (emergency exit routes, rights of way,
etc.), the later possibilities for construction are severely restricted.
Of course, the existing concept for the shopping centre also plays a role in determining its
success. Only if all tenants are connected to routes that are frequented by sufficient
customers for their lines of products can the tenants generate the sales volume necessary
to sustain cost-effective operations in the long run. Unclear routes, parallel malls, and blind
alleys or dead ends should set off alarm bells. The existing presence of several well-known
chain stores, which typically – by contrast to individual entrepreneurs – have professional
expansion management policies, is one indication that the routing is functional. Counting
passersby in comparison to the local pedestrian area can also be helpful for an assessment.
Understandably, some developers are inclined to optimize the development result, but not
always the real estate, by utilizing the land to its fullest capacity. There is a clear connection
here. The higher the level of capacity utilization (use for several-story retail business) of
the property, the lower the level of certainty that it will be fully leased over the long term.
Unfortunately, there are hardly any concrete values that have been obtained in practice in
this respect, but there are all the more projects that are in desperate straits on their upper
and lower levels. In the retail industry, it is simply not the case that everything can be leased
– and certainly not sustainably.
Other substantial criteria for success are appropriate parking opportunities and the existing
use mix. Should the shopping centre be an integrated component of a city centre, it is crucially
important that the city centre as a whole has sufficient, easily accessible car parking spaces.
This does not mean that the centre can do completely without parking spaces of its own.
Enterprises selling such items as consumer electronics make their decision whether to open
a location dependent on whether there are directly accessible parking spaces. Considerably
fewer parking spaces are, however, necessary in this case than for standalone shopping
centres which need to have the number of parking spaces absolutely necessary for their
24

individual modal split (ratio of individual traffic to public transport). With respect to the
use mix, it is also certainly not the case that every combination yields the desired synergy
effects. For example, apartments at the roof level of a shopping centre offer only limited
quality of life even if the shopping centre meets all its emissions requirements. During the
summer, when residents need to open windows, it can become necessary to run the centre’s
ventilation systems even at night (within the permitted limit values). Discotheques and similar
entertainment uses also have rather more negative effects on shopping centres. Because
of their different operating hours, the operating expenses and costs of cleaning and security
rise disproportionately, encumbering even a healthy ratio between rent and ancillary
expenses. And consequently, the relationship between the tenants and the owner.
Naturally, a good mix of industries among the tenants present also has a major bearing on
the success of the shopping centre. The answer to what constitutes a good mix of industries
would require more discussion than is possible here; under no circumstances, however, should
we forget that the mix of industries can be optimized on an ongoing basis upon the
expiration of any and every lease, but also in the context of active centre management, as
long as the other factors described here are still “all ok.”
Not only the functional aspects of the concept that have been addressed above, but also
the structural circumstances, which can establish or impede the necessary flexibility for future
changes, should be reviewed. A support grid that is no longer up to date, a large number
of non-flexible partition walls, or too little height between floors can necessitate
total demolition and reconstruction. A sensible reserve in the technical infrastructure makes
it possible to react relaxedly to future requests from tenants.
Aachen, Shopping centre Kaiserplatz Galerie, View south-east
COMFORT: Center Consulting
25

The notion is frequently
Investment development of shopping centres in Germany
bandied about that buyers
in comparison to selected metropolitan cities.
Total return, in percent
of shopping centres are
10
9
actually “only buying
8
leases.” But anyone who
7
6
deals seriously with this
5
topic will recognize quickly
4
that the “bricks and
3
2
mortar” and function are
1
also of essential importance,
at least with respect
to the sustainability of the
investment. Naturally, the
leases must be examined
thoroughly even if the
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Berlin, Hamburg, Munich
Germany without Berlin, Hamburg, Munich
as per
3 years
p.a.
as per
5 years
p.a.
as per
10 years
p.a.
review is reduced in scope. After all, these agreements form the basis for the expected cash
flow. Good creditworthiness on the part of the major tenants in particular provides security.
But the image of the main tenants can also contribute to the attractiveness, and thus the
stability, of the mix of industries. Without a legal review of the validity and binding nature
of the existing leases (key idea: is it all in writing?), leases that were assumed to have terms
of many years can rapidly become contracts subject only to the short terms permitted under
statute. A legal review is absolutely necessary. Professional centre management also makes
an essential contribution to a shopping centre’s long term success. Important fundamentals
as to this point lie in the leases. Provisions on consistent opening hours, required participation
in shared advertising (advertising collectives), obligations to operate the business, and
other provisions such as those requiring the landlord’s consent to structural alterations and
other major changes secure the ability of the centre management, which is ultimately
responsible for ensuring that the operation of the centre is successful for all concerned, to
intervene in the centre’s operations. A clean, consistent structure for the lease agreements,
which renders any deviation from a standard lease developed for each property easily
recognizable, makes this aspect of management substantially easier.
For the long term consideration of a centre, the degree to which the existing leases provide
for rents in line with the market is also significant. In the
best case, subsequent letting can be associated with the
potential for increases in value. Far more often, however,
there is a danger that leases are “prettied up” for the sale
and that it is therefore highly likely that in the event of
subsequent letting, the buyer will have to accept a lower
rent irrespective of the changes that may have taken place
on the market – which in turn results in a collapse in the
hoped-for revenue curve. As one sees, even at the minimum
review times required by the market and probably also at
reduced sensitivity to risk, a number of factors remain that
Thomas Doerr,
should not be left unconsidered when acquiring a shopping Managing Director
26

centre, if buyers want to have any security at all that they will not be forced to concede
after a few years that the prince they thought they had bought was nothing more than a
frog after all.
The complexity of shopping centres as a product is reflected in the complexity of the review
process that is necessary for purchase. Only very few investors are able to maintain the necessary
expertise in-house. Investors are, in the truest sense of the word, well advised to consult not
only lawyers, but also competent shopping centre specialists during the purchase process.
Frequently, it is precisely the identification of unused potential in a property that then gives
an investor the critical edge over the competition in the bidding process. But only specialists
who are experienced in dealing with, or indeed even involved in the design of, shopping centres
can be expected to provide this kind of advice. COMFORT is happy to assist in this respect.
Project developments in prime business locations
- internal reports from a niche and insider market -
The “biggest boom of all time” that has been ongoing in the local real estate sector since
the beginning of 2006 has particularly stimulated the business of developers of business
space in prime city centre locations.
Although the improvements in the overall economy have thus far made barely any noticeable
difference to the retail industry’s bottom line, the retail chains that operate in Germany are
looking ahead with greater optimism, expanding their networks of branches, and increasingly
looking for retail space again. Driven by the positive business conditions in their home
countries, new retail concepts from abroad are also, at the same time, becoming interested
in prime locations in Germany. And not only, as is usually the case, in the metropolitan regions,
but rather also in medium and regional centres. This demand from domestic and foreign
tenants, taken all in all, yields a significant surplus of demand for prime city centre locations.
This demand is expected to continue to grow, not reaching its climax until 2008.
Even somewhat prior to the quantitative increase in demand from tenants, demand from
international investors for real estate for all kinds of uses, but particularly for newly
constructed or remodeled commercial buildings with fresh leases and internationally
oriented tenants, began to take shape in Germany at the beginning of the second half of
2005 to an extent never before seen in this form.
The investor boom was triggered on the one hand by the low interest rate in this country,
and on the other by the realization that German real estate, as compared to other locations
in Europe, is undervalued and thus can be acquired at relatively low prices. The wave of
investors began in England and was quickly followed by investors from the United States,
the Netherlands, Israel, Ireland, and Scandinavia. French, Spanish, and Austrian investors
came later, and at the end, German investors also joined the demand as well. The latter
had formerly had the impression that the economic situation in Germany was difficult and
were therefore interested primarily in foreign investments, simply overlooking the
27

undervaluation of real estate in their own country. The large number of potential investors,
and particularly their massive sums of capital, led to curiosities never seen before. For
example, the discount that had previously been a fixture of package sales shifted to a markup,
because in particular, large volumes of 300 million, or better 500 million, or even just a flat
billion euros were in repeated demand and are still sought after.
This run, predominantly on commercial buildings in prime locations, led – following the
rules of the market – to the rapid dwindling of supply and a rise in purchase prices. It achieved
new dimensions nearly every day, and because too much astonishment is tiring in the long
run, the industry agreed that the “Toyota motto” applied: “nothing is impossible.”
Lucrative times for project developers as well, because they were able to sell properties
faster than they could lease them to tenants and currently achieve equivalents of between
three and five years’ rent more for their products as compared to the end of 2005. The flip
side of the coin, naturally, is that purchasing products now also comes with similar price
mark-ups, and even in secondary locations such as Castrop-Rauxel, purchase prices equivalent
of 20 times the annual rent are now being asked in all seriousness – which would bring us
back to the topic of “curiosities for the industry’s record books.” In addition to the rise in
real estate prices, construction prices also rose by about 20 percent from the beginning of
2006 onwards, with the result that of the added proceeds upon sales of these projects, not
much necessarily remains in the developer’s hands as profit margin in the individual case.
Although interest rates and purchase prices rose in 2007, the record level of demand among
investors continues undiminished. It is to be assumed that if interest rates continue to rise,
some investors will move to other markets, such as Eastern Europe, in 2008, which would,
however, have hardly any influence on the “sold-out” market for commercial properties.
Good, low-risk objects will still be marketable at good conditions even at that point.
If one takes as a basis the approximately nine percent increase in average rents for commercial
premises that COMFORT has determined took place over the previous year, it becomes clear
that the international end investors’ accounts seem to be balancing out. Higher purchase
prices, as these investors’ creed goes, are justified by future rent increases. Because rents
for commercial space are directly linked to the sales volume of retailers and the economic
institutes are finally predicting greater consumption – and therefore more retail sales – again
in 2008, the trend toward continually rising rents will remain unbroken in 2008 as well.
The market for developers of retail real estate located in city centres therefore remains
exciting. As previously, it continues to offer a wide field of activities, because the existing
spaces, most of which are small in structure, fall far short of the needs of modern retail
concepts, where units can range from 1,000 to 3,000 square meters in size. Simply remodelling
a building is not typically enough to establish the desired sizes. The structure that has grown
up over the history of our old cities, with their small parcels, can frequently only be
circumvented by consolidating several plots of land. Because most of the main commercial
locations are located in the old city centres and are viewed as prestige locations by the
public anyway, project developers must also manage the balancing act between historic
28

preservation, ensemble protection, urban-planning requirements, and the needs of modern
commercial spaces. They are unfortunately not always successful in doing so, and in
consequence, contemporary retail concepts cannot expand into cities with highly dense areas
subject to historic preservation or with overly restrictive interpretations of historic
preservation laws and regulations. As a result, the amount and range of goods offered
declines, and with it the attractiveness of the location, and consumers take up the alternative
offers extended by neighbouring cities or shopping centres.
A prime example of this development can be seen in Heidelberg, where the prime location,
Hauptstrasse, is lined almost exclusively with properties that are under historic preservation
and are located on relatively small parcels of land. The majority of consumers long ago
began travelling to the bustling retail hub of Mannheim, which is just 15 minutes away by
car. To halt this flight on the part of consumers, the city is now forced to establish largeformat
commercial units as quickly as possible – on a scale possible only through new
construction. And yet if these spaces are established too far from Hauptstrasse, there is the
risk that even more people will turn away from them and instead visit the new shopping
centre. The question of what concept can be applied to include appropriate properties in
such a way that they achieve the desired effects, and do not simply bleed the previous prime
location dry, remains open. This is one of the most delicate, sensitive tasks faced by project
developers and requires a high level of know-how, even for “simple” commercial buildings.
One critical factor in achieving a successful solution is specialization in a single use, which
makes it possible to place the interests of the primary use in the forefront of the
conceptualization for the project planning process, while at the same time establishing the
structural conditions for a second or third-party use, without incurring heavy expenditures
all over again. The secondary use of these commercial buildings, often treated as equivalent
to the primary use, for residential purposes, offices, or professional practices, is not at all
related to the overall rents charged in the top commercial locations and should be treated
accordingly during planning. The residential and office markets are saturated in many
locations, achieve lower revenues, and at the same time substantially increase the
administrative expenses of the property. The specialization that is necessary is probably one
of the main reasons that this segment of the real estate sector is served on a professional,
inter-regional basis by only a comparatively low number of project developers.
In summary, the prospects for developers of retail real
estate in city centres can be considered promising for 2008
as well. The bottleneck in real estate purchasing that is
already taking shape now will intensify at the same time.
The tension will not begin to ease until the end of 2008
and during the course of 2009 at the earliest, when major
investors will sell some individual properties acquired as
parts of packages after determining that they cannot keep
up in-house, without sufficient qualifications, the required
development know-how necessary for the mass of their real
estate holdings.
Matthias E. Bechtle,
Managing Director
29

30
Federal States

BADEN-WÜRTTEMBERG
The title win by VfB Stuttgart last season was rather surprising to one expert or another.
Less surprising to experts, however, is the fact that the retail trade in Baden-Württemberg
is doing exceedingly well in comparison to the rest of Germany. The economy of southwestern
Germany, from which retail chains profit in particular in great measure, is plowing ahead
at full steam, providing a steady boost in demand for retail space. The traditional prime
locations in the cities of Baden-Württemberg, which have high purchasing power and are
especially strong in terms of centrality, are particularly in focus. According to current
information analyzed by COMFORT, two-thirds of the 21 top cities in Baden-Württemberg
have experienced rent increases, the majority of them substantial.
For smaller shop locations with sales areas of between
80 and 120 square meters, top rents increased by an
average of 7.2% year-on-year. The rate of increase for
larger store locations of between 300 and 500 square
meters in area is about 5%. The pivotal factors in the
amount of real estate purchase prices (multipliers for
annual rents) have also advanced, in some cases by a
considerable amount. Irrespective of the high prices,
prime retail locations in Baden-Württemberg are still at
the top of the expansion and purchase lists for nearly
all chain stores and investors.
Baden-Baden
Average shop rents in prime locations
in Baden-Württemberg for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
Baden-Baden, city of baths, is known above all for its therapeutic mineral springs and as a
vacation destination, city of the media and the arts, and host to international performingarts
festivals. In 2006, the city achieved international fame during the football World Cup
due to the excessive luxury shopping tours taken by wives of the English players, led by
style icon Victoria Beckham. But upon closer inspection, what at first glance drew an
uncomprehending headshake from many turns out to reflect one of the main strengths of
the city of Baden-Baden. Due to the historical development of the city, it has always borne
the stamp of various royal and princely houses. The nobility perceived Baden-Baden, with
its inviting landscape of baths and springs and its mild climate, as the ideal location for rest
and relaxation. Magnificent, well-maintained structures with lavish gardens still remain as
evidence of this era. Thus Baden-Baden developed into a sophisticated, cosmopolitan city
that is still a preferred retirement location among well-heeled people from all over Germany.
This is not without its consequences; in terms of age structure, the city is considered
“overage.” But at the same time, it is accordingly well off. The purchasing power index of
110.3 speaks for itself. But the sales volume figure of about 127 and the centrality level of
more than 115 also signal the robustness of the retail trade in Baden-Baden. (Forecast values
for 2007, source: BBE)
100
90
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Baden-Württemberg
31

The retail offerings in the prime locations of the city centre tend to be oriented more toward
an older, more-solvent class of buyer than toward the young, “stylish” generation. The
assortment of offerings is clearly differentiated from the mix of sectors present in “normal”
shopping cities. The main shopping street, Lange Strasse, which is on a pronounced hill, is
distinguished by its fragmentary nature and a disproportionate number of owner-operated
shops, with large-format retail establishments few and far between. A corresponding,
contemporary example is the newly developed Wagener Galerie, with the two main tenants,
Mode Wagener and Drogeriemarkt Müller. In principle, there is still untapped potential in
Baden-Baden. For the expansion managers at various chain stores and project developers
of modern retail spaces, there is a broad field available for activity. Thus rents for both smaller
shops and the sparsely strewn larger stores have not changed in years. A retailer will
currently pay a monthly rent of about 60 euros per square meter for a new lease for a smaller
shop location.
Freiburg
The metropolis in the southwest of Germany is and remains a sought-after location for
national and international retailers. Freiburg features a healthy economic structure, which
is also expressed in the fact that this is the location with the lowest proportion of recipients
of social benefits in Germany. At the same time, the city has the highest proportion of
scientists and academics, the majority of whom are dedicated to groundbreaking fields in
research. All of this ensures that the city’s acknowledged good quality of life and the high
standard of living of its residents will continue in future. The number of residents has
increased by more than 20% since the mid-1980s.
The city’s location near the French and Swiss borders is also increasingly showing itself to
be a plus for Freiburg, because many Swiss and French residents have discovered Freiburg
as a shopping destination. For the Swiss, the gap between Swiss and German prices is
particularly attractive, and shopping tour packages from central Switzerland to Freiburg
are already being offered.
This results in a sustained high level of demand for retail space in the city’s classic prime
locations. This demand is met by only a very limited supply: first, because the old city, which
is proportioned on a medieval scale, offers only very little room for manoevring for modern
retail, and second, because the healthy economic structure of the existing retail trade in
Freiburg results in hardly any tenant turnover. This is also reflected in the level of chain store
presence in the Freiburg city centre, which is very low in contrast to that of other cities;
here, Freiburg is still at the low end of the scale by comparison to other cities in Germany.
The city’s land use plan heralds new developments in the train station area (freight depot
station site) and the Fahnenberplatz area, but these seem hardly apt to provide much help,
because they are rather more oriented toward specialist stores or are too far away by foot
from the traditional prime locations of Kaiser-Joseph-Strasse, Rathausgasse, and
Bertholdstrasse.
32

To the great pleasure and relief of locally
based retailers, there are also no plans in
sight for a major shopping centre in
Freiburg. In summary, it can be stated
that the situation has not changed over
the previous year in terms of retail
demand. Space is rarely available, if at all.
As a result, rents have risen again as in
the previous year. For a well laid-out retail
space of between 80 and 120m2 , tenants
now have to pay about EUR 125/m2 ,
about 4% more than last year.
And yet there are also new chain
locations to report. The company
Freiburg, Kaiser-Joseph-Strasse 186-188, Sparkasse
Fielmann took over the former Cafe “The reconstructed savingsbank/finance Centre
Steinmetz some time ago and has has been readily accepted”
remodelled the space on a grand scale.
O2 will be offering its telecommunications
services at the Modehaus Herr in the future. In a transaction brokered by
COMFORT Munich, both Fortis Bank for its retail banking concept, Credit4me (at Kaiser-
Joseph-Strasse 225) as well as New Yorker (at Kaiser-Joseph-Strasse 168) found new locations.
Heidelberg
In terms of demand for retail space, the city of Heidelberg remains one of the most highly
sought-after cities in Baden-Württemberg. This results in further rent increases, particularly
in Heidelberg’s prime location, Hauptstrasse. Thus an excellently laid out small store space
in the top prime location, between Bismarckplatz and Brunnengasse at Akademiestrasse,
attracts rents of up to 105 euros per square meter per month.
In 2006 and 2007, there were once again numerous changes in the top location. For example,
the property at Hauptstrasse 4, once occupied by upscale men’s outfitter, Sportiv
Männermode, will in the future be the site where Puma presents its highly successful sporty
lifestyle concept. Leo’s Jeans and Back-Factory have opened down the street at No. 25, and
Colloseum, with its concept, Forever 18, took over the space at No. 27 from Eram Schuhe.
More than a simple change of tenants is planned for Hauptstrasse 23, a space currently still
being used by the regional newspaper, Rhein-Neckar-Zeitung, and a Lufthansa travel
agency. Here, the Müller chain of drugstores is said to have scored a tremendous coup. After
countless international chain stores and project developers had knocked at the door of the
property’s owners as well as that of the Rhein-Neckar-Zeitung itself and came away from
discussions empty-handed, the Müller drugstore chain ultimately succeeded in proposing
a concept to the owners that met with their approval. The property is not being sold; instead,
33

Müller will receive a long term lease. After the very likely demolition or at least core
rehabilitation of the building, it is planned that a Müller Galerie, a concept familiar from
a number of cities in southern Germany, will be constructed here. According to reports,
Müller is to invest a sum in the high millions.
Down the street at No. 42, mobile phone service provider, O2, has secured the space from
Yves Rocher. Another change on Hauptstrasse that is worthy of mention is the replacement
of Billy’s with T-Punkt and American Apparel. Other new leases are in the pipeline. Basically,
supply here can hardly keep up with demand, particularly for spaces of between 400m2 and 2,000m2 in these buildings, most of which are divided into smaller spaces and are
moreover subject to historic preservation orders.
The sustained pressure of demand, particularly for large-scale, modern retail spaces (which
spills over not least onto project developers as well) has led in turn to discussions, which
have been ongoing for a fairly long time, of various locations and project plans for a
shopping centre. We reported on these developments extensively in our 2006/2007 market
report. For the good of the city and its prime real estate
location, a central area connected to the prime location
Average shop rents in prime locations
should be given precedence as a fundamental principle.
in Heidelberg for shop locations
with retail sales area of 80–120 square meters
This is also the view of the Heidelberg retailers’
in comparison to the average development
of shop rents in Germany
association, “Pro Heidelberg.” We are eagerly waiting
to see what direction the discussions of location for a
shopping centre in Heidelberg will take.
At all events, Hauptstrasse, as the traditional prime
location, is rated as higher than average, by investors
also. This is shown in particular by the recent purchases
made by institutional buyers. For example, Hauptstrasse
4 (future tenant Puma) and Hauptstrasse 37 (tenant
H&M) have both changed hands. The top prices paid
range up to 18 times the annual net rent.
Heilbronn
Two major sites currently under construction already dominate and influence the top prime
location in Heidelberg and will continue to do so in the future. The first is the Stadtgalerie,
from ECE, and the second is the Klosterhof department store complex, from ITG. Both will
make lasting changes to the retail scene in Heilbronn’s city centre and will very likely
improve it.
Construction work on the Stadtgalerie Heilbronn, located in the Landerer area between
Deutschhof and Götzenturm, with a direct connection to the pedestrian area at Fleiner
Strasse, is in full swing. Following the completion of the work, which is scheduled for the
first quarter of 2008, ECE indicates that about 70 specialist stores, cafés, and restaurants,
34
120
110
100
90
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Heidelberg

with a combined total of about 13,000m2 of retail space spread over three levels, and 660
parking spaces should be available to the public. This additional shopping centre developed,
planned, and constructed by ECE will be a success for the Heilbronn location, including from
an architectural and urban-planning standpoint. From the retail point of view, the site’s
direct connection to the top prime location, Fleiner Strasse, will create a new magnet in the
city centre that will very likely also have positive effects on the traditional prime location.
The second major construction site is only about 100 meters away, on Kiliansplatz. Here,
the Klosterhof area will be home to a department store complex, planned by Düsseldorf’s
ITG Immobilien-Treuhand, with about 10,500m2 of retail area for a department store and
two textile businesses. One of the two spaces will house international young fashion chain,
New Yorker, which will open a new flagship store there with about 2,600m2 of space.
According to local press reports, other potential tenants in talks with ITG concerning the
space that is still to be allocated include C&A, Müller-Drogerie, or also the textile specialist,
Madison, which already has a location on Fleiner Strasse in Heilbronn. The latest date set
for completion and move-in for these retail spaces is Spring 2009.
Taken together, these two developments can be evaluated as positive and necessary
measures for the city centre of Heilbronn. Until now, Heilbronn suffered from a reputation
of having a not very attractive retail setting due to the absence of popular brands and chains.
As a result, the city and surrounding area ran the risk of losing purchasing power in the
future to Stuttgart or to the Breuningerland location on the A 81 autobahn. The new projects
in the city centre, however, will provide a much-needed, tangible boost to Heilbronn’s draw
and centrality as a shopping destination for the region.
In the reporting year 2006/2007, only two new leases were added in Heilbronn’s top location,
Fleiner Strasse. In a transaction brokered by COMFORT Munich, Fortis Bank, with its Fortis
Credit4me concept, took over a location at Fleiner Strasse 5 formerly used by Douglas. In
addition, mobile telephone service provider, Arcor, leased the former e-plus space at Fleiner
Strasse 3. These changes in tenants were only possible, however, because the previous
operators were able to lease larger spaces in the Stadtgalerie Heilbronn.
In summary, the following conclusion can
be drawn: The demand for retail real
estate in the top location is declining, as
measured by the number of potential
tenants, due to the total of
approximately 23,500m2 of new space
being added. Nonetheless, finding
tenants for vacant space on Fleiner
Strasse should also not be problem in the
future, because the location is becoming
more attractive on the whole. Despite
the increase in space, rents have
remained stable.
Heilbronn, Fleinerstrasse 7, Fortis
COMFORT: Letting
35

Karlsruhe
More than two years after the opening of the Ettlinger Tor shopping centre, with about
130 businesses in 33,000m 2 of space, it is clear that the traditional prime location, Kaiserstrasse,
did not – as many predicted – in fact go to the dogs, but is rather, on the contrary, enjoying
excellent health. The reason for this is the integration of this centre into the classic prime
location, Kaiserstrasse. This increases the attractiveness of the retail trade in Karlsruhe on
the whole, which is clearly expressed in the rise in the city’s centrality level. While this figure
still lay at 129.4 in 2005, a value of 135.8 was determined for 2007 (source: BBE).
Another particularly noteworthy development is that the proportion of all retail space in
Karlsruhe made up by retail space in the city centre has increased over the past 14 years,
from about 37% to about 38%. The ECE Ettlinger Tor shopping centre naturally plays a
significant role in this trend. The increase may appear marginal at first glance, but should
be considered an outstanding figure. The development in many cities is namely running in
precisely the opposite direction. A value of 30%, for instance, in this context is already to
be viewed as a sign of a fundamentally healthy city centre. Weaker cities have lower values,
some of them considerably lower. So from this point of view in particular, there should be
potential for future value increases for rental space and properties on Kaiserstrasse. Of
particular interest in this respect is the area of Kaiserstrasse from about Waldstrasse to
Kreuzstrasse, just past the Marktplatz, which is reaping
Average shop rents in prime locations
above-average benefits from this development. In the
in Karlsruhe for shop locations
with retail sales area of 80–120 square meters
view of COMFORT, the planned project development
in comparison to the average development
of shop rents in Germany
from Hamburg developer, Newport, in the preferred
120
110
location of Kaiserstrasse at the intersection with Karl-
100
90
Friedrich-Strasse will, for the reasons outlined above,
80
meet with particularly great interest. Newport finally
70
60
obtained the approval of the previous owner, Volksbank
50
40
Karlsruhe, and will now – with the support of COMFORT
30
20
Munich – add modern, highly attractive, high-
10
performance retail space to the market. On the whole,
0
2002 2003 2004 2005 2006 2007
further potential for rent increases can be affirmed. The
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
survey of this year’s top rents showed increases of nearly
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Karlsruhe
6% for small shop spaces and 10% for larger ones.
Konstanz
The retail trade in Konstanz continues to benefit both from tourism in general and, notably,
from the many visitors and consumers who come to the city from just across the border in
Switzerland in particular. This ensures sustained strong demand on the part of national and
international chains for appropriate retail space in the prime locations in the city centre.
When the Lago-Centre shopping centre, with sales area of about 15,000m2 and
approximately 70 businesses, opened its doors in Konstanz more than three years ago, the
36

situation was a bit different. Now it
appears that the traditional prime
location has regained its former vitality.
It is, however, evident that the Lago-
Centre resulted in a certain displacement
among the shopping streets of Konstanz.
Parts of Wessenbergstrasse and Hussenstrasse
have declined in the quality of
their location, while at the same
time Kanzleistrasse, Marktstätte, and
especially Rosgartenstrasse have increased
in importance. This is also
reinforced by a series of current project
developments that are playing out nearly
exclusively in the formerly outlying area
of Rosgartenstrasse toward Bodanstrasse:
On the former grounds of the Sparkasse
savings bank between Bodanstrasse and
Rosgartenstrasse, a new commercial
building with more than 6,000 m2 Konstanz, Rosgartenstrasse 21, x-bags
of COMFORT: Letting, Investment
usable space is under construction and
due for completion by Spring or Summer of 2008. Three tenants are already certain: C&A,
Deichmann, and an Edeka grocery store on the lower level. The developer responsible for
the project, Hamburg’s B&L, is also carrying out an additional project development diagonally
opposite the first, in the former Sport Bredl location at Rosgartenstrasse 27. A young
fashion provider is in talks as a potential tenant. Prompted by these development measures,
it is by no means impossible that the owners and tenants of the immediately adjacent
buildings will come under pressure to invest and remodel as well. In the long term, this
would certainly be the right decision. Rents for both smaller and larger shop spaces in top
locations have risen in each case by more than 15% for the second consecutive year.
Ludwigsburg
Ludwigsburg, initially only the site of a pleasure and hunting palace planned by Duke
Eberhard Ludwig, gradually developed at the beginning of the 18th century into one of
the baroque centres of Germany, with the construction of the 450-room, 18-building
Ludwigsburg Palace (Residenzschloss), then the Schloss Favorite hunting château, and the
Monrepos lakeside palace. It then naturally became the seat of the dukes and kings of
Württemberg. Today, the palaces are used for both official receptions and cultural events.
Ludwigsburg Palace, for example, serves as the backdrop for the popular television talk
show “Nachtcafé” (Nighttime Café), produced by German broadcaster, SWR.
At present, although Ludwigsburg has a population of 86,000 in one of the strongest
economic regions of Germany, between Heilbronn and Stuttgart, the city still does not have
37

much to offer from a retail point of view. To go shopping, residents of Ludwigsburg prefer
to travel to the Breuningerland location that is directly on the A 81 autobahn and just a
ten-minute drive from the city centre, or right into the neighbouring city of Stuttgart, which
can be reached by car in just 15 to 20 minutes.
The Wilhelm-Galerie, which is currently under construction, should change this. The property
is a shopping center that is located right at the heart of the city and has a direct connection
to the Ludwigsburg pedestrian zone. The project is being planned and implemented by
Hochtief. With about 30 specialist stores spread over two retail levels and a total of about
15,000m2 of retail space in a historic building (the Wilhelmsbau), this shopping mall will
be a true magnet, bringing new tenants to Ludwigsburg and thereby also lending
Ludwigsburg as a location greater draw and attractiveness.
What is more, this additional shopping centre in the region is directly connected with
Ludwigsburg’s prime location, Kirchgasse, and will therefore reinforce the traditional prime
location overall for a long time. Leases for large retail spaces have already been signed
with H&M, C&A, REWE, and the drugstore chain Müller.
As in Heilbronn, the highest priority in Ludwigsburg was to strengthen the retail location
and stand up to the surrounding competition (in this case, Stuttgart and Breuningerland).
Both cities, Heilbronn and Ludwigsburg, suffered from a dull, unattractive retail landscape
in their prime locations, which is now being alleviated through the opening of the shopping
centres in the first quarter of 2008. This must be seen as being quite positive, even if the
cities are joining the competition for new clients under different starting conditions. While
the shopping centre in Heilbronn has no competition to fear within a radius of 30 to 40
kilometers, Ludwigsburg, as we have mentioned, is just a few minutes’ drive from
Breuningerland and from the city centre of Stuttgart. The well-connected new centre in
Ludwigsburg should, however, place the city on a better footing in this hotly contested
market. We are eagerly awaiting future developments.
In the prime location of Ludwigsburg, Kirchgasse, demand for retail space is declining, with
the construction of the Wilhelm-Galerie one of the causes of this trend. The maximum rents
for retail space continue to lag at a relatively low level.
Mannheim
With top rents of up to 130 euros/m2 for smaller ground-floor store space, the city of
Mannheim asserts both its top position in the Rhine-Neckar metropolitan region and its
status as one of the top 15 most expensive retail locations in Germany. The main retail
activities in Mannheim take place in the area known as the “Mannheim Retail L,” whose
shape is formed by the Planken and Kurpfalzstrasse/Breite Strasse pedestrian areas. The
extensive assortment of retail offerings, ranging from the high-end to consumer goods,
has become broader and deeper still in recent years due to a number of new locations opened
for various concepts and chain stores, especially in the Planken pedestrian area, which has,
38

in turn, ensured a high level of customer acceptance. The good parking space situation and
ease of accessibility via public transport also support this trend.
The absolute highlights of the Planken pedestrian area in 2007 came from dominant local
firm, Engelhorn, and from the Düsseldorf Peek & Cloppenburg Group. After demolishing
the existing structure and putting up a new building in Mannheim, the fashion chain from
Düsseldorf is starting out with its tenth “Weltstadthaus” (cosmopolitan city building),
which has more than 11,000m2 of sales space. The investment costs for the project are
estimated to be about 50 million euros. A standalone Esprit store is also included. Two weeks
earlier, local top dog, Engelhorn, had once again clearly marked its territory, presenting its
completely redone fashion store, which had also been expanded to include a standalone
accessory shop called “acc/ess,” located in a new building with an almost avant-garde look
and feel. The total costs for these two measures are estimated to have amounted to
approximately 13.5 million euros. In addition, there were also other changes at Engelhorn.
A Boss Orange store that occupies about 400m 2 , which is operated by Engelhorn as franchisee,
now directly connects the Trendhouse, a progressive, young concept situated to the rear,
with the Planken top location. Over the next few years, it will be exciting to watch the
duality between the Düsseldorf chain, which draws primarily from the middle in terms of
both fashion and price, and the Mannheim’s local top dog, which has put serious effort
into trading up.
Mannheim, O3, 2-8, Peek & Cloppenburg, Esprit
“Now the Rhine-Neckar area also has a cosmopolitan city building”
39

With Peek & Cloppenburg’s departure
from its previous interim rental space,
the way is open for the second CENTRUM
project development in Planning Zone
O7 after the completion of remodeling
for Zara and s. Oliver, which has taken
place in the meantime. New tenants that
are already certain are the young fashion
specialists, New Yorker and Bestseller,
along with Vero Moda and Jack & Jones.
In addition, existing tenant H&M will
open in an optimized, expanded space.
A total of nearly 6,000m2 of state-of-the
art retail space will be created here by the
end of 2008. All three leases were
brokered by COMFORT Munich.
Other new locations that must be
mentioned include Snipes, a street culture concept that will use the Hallhuber space in future,
and chain restaurant, Vapiano, which has secured about 850m2 of foodservice space at
Friedrichsplatz 1.
Basically, the city of Mannheim wants to ensure that it does not lose out in this year’s
celebrations of its 400th anniversary, and plans to upgrade the Planken area. The city’s central
strolling area, between the Wasserturm (Water Tower) and the Rheintor (Rhine Gate), is
due to be renovated for an estimated 10 million euros. An open architectural competition
is scheduled to be held for this urban planning initiative at the end of the year.
Mannheim, S1, 1, Müller Drogeriemarkt
COMFORT: Investment
40
Mannheim, O7, 11+12, Zara, s. Oliver
CENTRUM: Project development
COMFORT: Letting, investment
The redesign of the Kurpfalz axis at Breite
Strasse has now been completed and has
visibly profitted this location. Unfortunately,
the plans of Swiss project
developer, Unimo, for a shopping centre
at K1 in and around the Karstadt building
seem to have been put on hold or to be
nearly off, because the necessary purchase
of neighbouring plots of land has not yet
taken place.
In the investment area as well, the
traditional prime locations of Mannheim
are among the most expensive locations in
Germany. Demand is concentrated
particularly in the absolute top location
of Planken, which draws interest from both

private and institutional investors. However, Kurpfalzstrasse or Breite Strasse is also of
great interest to investors. Thus COMFORT Munich successfully brokered the sale of the
dominant corner building at Planning Zone S1, the main tenant of which was Drogeriemarkt
Müller, to the institutional buyer, EC-Advisors.
With the numerous new developments and openings outlined above, Mannheim is putting
its neighbour Ludwigshafen in its place again at the right time. When it comes to key
economic data and the attractiveness of the retail landscape, Ludwigshafen is far inferior
to the city centre of Mannheim, and by contrast, cannot build on a large number of
individual development measures in the city centre itself. Instead, as in other cities,
Ludwigshafen is working away with the help of its political scene. ECE plans to build the
new shopping centre, Rhein-Galerie, with about 30,000m2 of retail space and about 120
businesses, at the Zollhafen area. The centre is scheduled to open at the end of 2009 and
plans to offer “worlds of high-end shopping” that should
help to bring lost purchasing power back to
Ludwigshafen. It is interesting to note that in the
immediate area, ECE already operates the somewhat
smaller Rathaus-Center, likewise in Ludwigshafen, and
the Rhein-Neckar-Zentrum, which offers about 60,000m2 Average shop rents in prime locations
in Mannheim for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
140
120
100
of retail space in the neighbouring city of Viernheim.
80
The draw of the mature, stable structure of the
Mannheim city centre will certainly not suffer any ill
effects due to these three developments or to the
existing centres, even taken together, either in the
medium or the long term. Mannheim is, and will remain,
the number one location in this region.
Pforzheim
The “Golden City” of Pforzheim is located between the retail metropolitan cities of Stuttgart
and Karlsruhe and enjoyed the presence of a soccer club in the premier league as long ago
as in 1906, although at that time the final game for the German championship was lost to
VFB Leipzig by a score of 1 to 2. Now, the city wants to rejoin the top league, if not
necessarily in soccer; it wants to be once again one of the top players in the league of the
most attractive retail cities in Baden-Württemberg.
With this in mind, the city paved the way for the Schlössle-Galerie, with approximately
16,000m2 of retail and foodservice space, which opened in the Spring of 2005, as well as
for 3,500m2 of retail space on Westliche-Karl-Friedrich-Strasse at the intersection with
Poststrasse for the so-called “Schmuckwelten” (Worlds of Jewellery), which almost exclusively
present the classic top exports of the city of Pforzheim. The goal of these measures was
and is to retain purchasing power within Pforzheim and draw in further purchasing power
from the surrounding area.
60
40
20
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Mannheim
Mannheim
41

As a result of these two measures, the attractiveness of Pforzheim as a retail city has made
significant gains. As we reported in our 2005/2006 market report, a significant location
displacement took place as early as the opening of the Schlössle-Galerie. Although the chain
stores had previously concentrated almost exclusively on the area of Westliche-Karl-Friedrich-
Strasse, between the Marktplatz and Leopoldstrasse, the interest is now focussed on the
section between Leopoldstrasse and the Schlössle-Galerie. Two years after the centre’s
opening, the signs of this trend are even more evident. Foot traffic in the area between
Leopoldstrasse and the Schlössle-Galerie is many times higher than in the aforementioned
area.
Additional new leases for attractive concepts in the “new top area,” such as those for K&L
Ruppert (in the space previously used by Breuninger at Westliche-Karl-Strasse 68, right next
to the Schmuckwelten), as well as Footlocker and Madonna (which moved into the former
Quelle building at No. 41 when Quelle moved into the Schlössle-Galerie) support and
reinforce this development. Despite the Schlössle-Galerie’s having added approximately
16,000m2 of retail space all at once, the fact that the centre has given the city centre of
Pforzheim a sustained boost as a retail location means that there is still a high level of interest
among various chain stores, particularly in the top section of Westliche-Karl-Friedrich-
Strasse. Pforzheim’s high key figures underscore this statement; in particular, its centrality
level of 149.2 is impressive (forecast values for 2007; source: BBE).
In conclusion, it can be stated that the retail trade in the city centre of Pforzheim, particularly
in the traditional prime location with the well-integrated, well-connected Schlössle-Galerie,
is better positioned than ever. At the same time, the city could still use certain upgrades,
particularly in the area of Westliche-Karl-Friedrich-Strasse up to the Marktplatz. Initiatives
on the part of the city to boost its attractiveness in this area are currently being discussed.
However, in the “new top section” of Westliche-Karl-Friedrich-Strasse as well, the owners
need to invest more heavily in their own buildings in order to create modern retail spaces
on a generous scale – spaces that are in demand among attractive, interesting rental
concepts and for which top rents, according to the latest data gathered by COMFORT, range
up to 69 euros/m2 for smaller spaces (an increase of nearly 5%) and up to 37 euros/m2 for
larger ones (an increase of nearly 6% over last year) per month.
Stuttgart
Demand for retail space in Stuttgart continues to grow. This naturally also influences rents
in the city centre’s top locations. At the top of the scale, optimally designed spaces of
approximately 80 to 100m2 on Königstrasse, Stuttgart’s top prime location, rent for up to
220 euros per square meter. This represents an increase of 10% over last year’s rates.
Irrespective of the large number of project developments, remodels, and new leases that
have taken place in the past two to three years in Stuttgart’s traditional retail locations,
the supply of top prime locations still cannot keep up with demand. Our 2006/2007 market
report contained extensive reporting on project developments such as the “Weisse Haus”
42

(White House) of Phoenix Real Estate Development GmbH at Königstrasse 43b, the
Königsbau-Passagen – the shopping centre located at the centre of Königstrasse, on
Königsplatz – the Phoenix building at Königstrasse 5, also under the auspices of Phoenix,
and the Kronprinz building on Kronprinzstrasse, which runs parallel to Königstrasse.
Since January 2007, there have been only a few new openings on Königstrasse in Stuttgart
– strictly speaking just one between then and June 2007. The new concept COS, Collection
of Style, from the Swedish fashion chain, Hennes & Mauritz (H&M), successfully opened a
new location in the former Oettinger space at Königstrasse 46. Beyond that, the only leases
signed were those whose effects will become evident only later; that is, the spaces have not
yet been turned over to the new tenants. Examples of tenants who have not yet moved in
include New Yorker and Geox at Königstrasse 19a and dm-drogeriemarkt at Königstrasse 2.
The connecting streets between Königstrasse and the Marktplatz, Stiftstrasse, and
Schulstrasse continue to enjoy high demand. On Stiftstrasse, for example, which is considered
Stuttgart’s sole true luxury location, Escada has opened a new site at the corner of Kirchstrasse
and Stiftstrasse. New openings on Schulstrasse are also scheduled for the first quarter of
2008.
Only on the streets that run parallel to the “upper” Königstrasse, Hirschstrasse and Calwer
Strasse, have there been few to no changes. Calwer Strasse is increasingly developing into
an area that supports foodservice exclusively. As a result of the outside seating maintained
by the foodservice establishments located there, which interrupts the flow of foot traffic,
passersby are no longer able to view the display windows of the retail stores there. At least,
many chain stores fear that this is the case, and have distanced themselves accordingly from
this location.
On the Marktplatz, near Breuninger, Breuninger CEO, Willem G. van Agtmael, is pushing
for a luxury area on Karlsplatz, at the rear of the main Breuninger building, following the
remodelling of the space in 2006. The well-known Dutch architect, Ben van Berkel, who is
especially well known in Stuttgart for his architectural achievement with the Mercedes
Museum, which opened in 2006, is already preparing initial drafts for this luxury area. The
plans call for businesses and office spaces, restaurants and a luxury hotel. It is also planned
that the Federal State government offices will make their new home here as well. The project
is being conducted under the name “Da Vinci” and could be completed as early as in
September 2012. The pressure being exerted by the head of Breuninger should also be viewed
against the fact that after 13 years of planning and discussion, the starting signal has finally
been given for the Stuttgart 21 project. The German Federal government and the Federal
State of Baden-Württemberg came to an agreement in July 2007 on the financing of this
mega-project, which consists of several partial projects and involves a total volume of
approximately 4.8 billion euros. Now the previous rail terminal is to be relocated to below
ground and redesigned to accommodate traffic in both directions starting in 2010. The surface
areas that are freed up as a result are planned for use as a new neighborhood, including a
large new shopping centre (working title to date: Galeria Ventuno). Added to this are massive
investments in the reorganization of the entire Stuttgart hub, including laying over 30 km
43

of new tunnels and expanding the high-speed rail line to Ulm. Breuninger CEO, Willem G.
van Agtmael, like many other retailers already present, fears negative effects on the
established Stuttgart retail landscape through a displacement of location toward the “lower”
area of Königstrasse, triggered especially by an oversized new shopping centre.
This fear is entirely justified when one considers that in the context of Stuttgart 21, the
Galeria Ventuno project would bring with it additional growth of an estimated 50,000m2 in retail space on top, so to speak, of the new main train station. The initiation of bankruptcy
proceedings in April 2007 concerning the project company of the Düsseldorf company
Mediconsult, which had been the main company dealing with the giant shopping centre
until then, does, however, leave unanswered the question of who will be the partner
responsible for the project in the future. It is possible that other project development
companies, such as ECE or mfi, will now get involved.
Should the shopping centre truly come to pass on the scale that is planned, Breuninger
CEO, Willem G. van Agtmael, will not be the only one issuing warnings. Nearly all retailers
in Stuttgart share his view. With retail space in the city
centre totaling 320,000m2 , the consequences of
managed growth to the tune of about 16% all at once
are simply incalculable.
But we have not yet reached that point, and the city of
Stuttgart is still the unchallenged leader in Baden-
Württemberg when it comes to demand and rent levels.
In fact, in the latter respect, it even occupies the third
highest rank in a comparison of all locations in Germany
in the hit list of retail rents. Naturally also noteworthy are
the sustained positive key figures for purchasing power
(107.98), centrality (10.06), and sales volume (140.44),
which will underscore Stuttgart’s superior position in the
future as well (forecast values for 2007; source: BBE).
Tübingen
Tübingen doesn’t just have a university, it is a university. That is the slogan by which the
city of Tübingen introduces itself on its own homepage. The city on the Neckar River has
approximately 85,000 inhabitants, 20,000 of whom are enrolled at the university, and is
located at the geographic heart of Baden-Württemberg. Tübingen is neither one of
Germany’s traditional industrial locations nor one of its major shopping metropolises. And
yet more and more companies from the IT, biotech, and nanotech sectors are opening
locations there. Nationally and internationally oriented chain stores from the textile sector
are trying to lease larger retail spaces. Not far from Tübingen, only about 29 km, is the
well-known teaching institution of the German retail textile trade, LTD Nagold, which in
turn supplies an up-and-coming workforce in the field of retail textiles.
44
Average shop rents in prime locations
in Stuttgart for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
240
210
180
150
120
90
60
30
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Stuttgartof
shop rents in Stuttgart

In Tübingen, one goes to the historic city centre to shop. Retail flourishes against a medieval
backdrop. In the traditional prime location, the Holzmarkt, Kirchgasse, and Neckargasse, one finds
companies with national and international operations, such as Hennes & Mauritz, Orsay, Xanaka,
Fielmann, and Tchibo, to name just a few. Starting in the Summer of 2007, the international textile
chain, New Yorker, in a transaction brokered by COMFORT Munich, will open its doors on about
1,300m2 of new space in the former Haidt fashion department store and offer the residents of
the city of Tübingen an even broader textile assortment in the young fashion field.
Predominantly regional retailers have settled in the city’s narrow, winding historic streets,
such as Marktgasse, Collegiumsgasse, and Hirschgasse. Here, the interested buyer can
browse retail spaces that are mainly small to very small, ranging from 10 to 100m2 in size,
offerings ranging from antiques to records – everything one can no longer find, in fact, in
the slickly styled modern temples of consumption. Interspersed among the small boutiques
and shops are foodservice establishments that give the ancient district, which nonetheless
appears young again thanks to its customers, a very pleasant, cozy touch.
Shopping in the university city of Tübingen is accordingly characterized by a broader
assortment than is the case in comparable cities. The variety of shopping possibilities offered
could, however, be expanded even further if enough space in the prime location were
available and if large-format modern retail spaces could possibly also be established, even
behind the historic façades, and adjusted to the needs of chain stores. In this respect, it is,
above all, the officials in charge of historic preservation who need to be appealed to, because
without the possibility of a skillful interplay of old and new, or without façades that are
subject to historic preservation orders but are still coaxed into yielding sufficient transparency
for optimum presentation of goods, it is difficult or impossible for modern concepts to create
and operate corresponding large-format retail spaces.
Demand for ground-floor space ranging from 100 to 200m2 in size currently far outstrips
supply, as does demand for retail space ranging in size from 600 to 800m2 over a maximum
of two levels. Rents for smaller spaces remain stable for this year as well, at 45 euros/m2 .
For larger spaces, retailers should allow for prices of 30 euros/m2 .
Ulm/Neu-Ulm
The “twin cities” of Ulm and Neu-Ulm have approximately 170,000 inhabitants between
them and are located between the two strongest economic regions in southern Germany,
namely Munich and Stuttgart. Dominated by the Ulm Münster, which has the tallest church
tower in the world, the city also boasts record numbers in terms of demand for retail space
in its top prime location, Hirschstrasse and Bahnhofstrasse.
For this reason, PEG Projektentwicklungsgesellschaft mbH and the city of Ulm, in cooperation
with various service providers and interest groups, have been in talks for quite some time
concerning the development of an area adjacent to the pedestrian area, in the area of
Bahnhofstrasse, Friedrich-Ebert-Strasse, Sedelhofgasse, and Keltergasse. The area planned
45

involves a shopping centre with about 20,000m2 of retail space. A feasibility study has been
commissioned and discussions with all the owners of the properties that are involved within
the planned area are due to take place.
In addition, the Hamburg’s Procom group of companies plans to use the premises of the
former Neu-Ulm main train station to construct a shopping centre with about 24,000m2 of
retail space plus office and foodservice space. Construction is scheduled to begin in October
2008 and it is planned that the centre will be complete after about 18 months.
In the top prime location in Ulm, Hirschstrasse and Bahnhofstrasse, only one change has
taken place since January 2007. In future, Deichmann will sell shoes in the former Tack
building at Bahnhofstrasse 1. The availability of space in this location is so scarce that even
chain stores that have already been present there for years prefer to deal with full remodeling
and optimization of their existing leased properties instead
of – as is usual in other locations – achieving the goal of
optimization by changing locations.
Additional retail locations in the city centre, such as
Platzgasse and Münsterplatz, remain primarily
characterized by local business and are settled by only
isolated chain stores. In the future as well, these locations
will hardly offer any competition for, or alternatives to, the
top location, Hirschstrasse and Bahnhofstrasse. It is to be
assumed that rents and purchase prices will continue to rise.
Top rents for both small and larger shop locations rose by
more than 11% over the previous year.
46
Maximum rents in Baden-Württemberg in 2007
Thorsten Kruczyna,
Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Aalen 67,066 106.4 121.3 45 30
Baden-Baden 54,581 110.3 115.1 60 35
Esslingen am Neckar 92,091 113.1 110.4 60 35
Freiburg im Breisgau 215,966 96.8 155.1 125 75
Friedrichshafen 58,068 107.0 121.5 40 25
Heidelberg 142,993 99.9 132.9 105 60
Heilbronn 121,613 100.5 146.4 80 40
Karlsruhe 285,263 103.2 135.8 90 55
Constance 81,217 102.8 128.9 60 35
Lörrach 47,026 103.8 140.9 40 25
Ludwigsburg 87,673 110.5 167.0 35 25
Mannheim 307,900 98.4 140.1 130 75
Offenburg 58,793 103.2 141.1 40 25
Pforzheim 119,021 101.3 149.2 68 37
Ravensburg 48,994 107.1 172.7 50 28
Reutlingen 112,252 107.0 136.9 75 40
Schwäbisch Gmünd 61,350 103.5 112.3 45 28
Singen 45,366 99.0 176.1 40 25
Stuttgart 592,569 108.0 130.1
Königstrasse 220 110
Schulstrasse 150
Stiftstrasse 170 100
Hirschstrasse/Calwer Strasse/Marktplatz 90 45
Tübingen 83,496 102.1 84.7 45 30
Ulm 120,625 103.5 143.1 100 50

BAVARIA
According to a recent study conducted by HypoVereinsbank, the two southern German
Federal States of Bavaria and Baden-Württemberg are ahead when it comes to the question
of which regions in Germany have the best prospects for the future. The result is not
surprising, nor was it unexpected. For years, both regions have been relied upon in particular
to achieve above-average increases with respect to economic performance and business
activity. So it is also no wonder that retail space and commercial buildings in the prime
locations in Bavarian cities are still at the top of the expansion and purchasing lists of chain
stores and investors looking to expand. The data
collected for the annual COMFORT rent survey showed
Average shop rents in prime locations
in Bavaria for shop locations
that rents in traditional prime locations in the top twenty
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
cities in Bavaria have increased, some of them
80
considerably, in 60% of all locations. Smaller shop spaces
70
with retail areas of between 80 and 120 square meters
60
in size, posted an average increase of 4.8% in top rents
50
over last year. Among larger shop locations of between
300 and 500 square meters of retail space, the increase
40
30
20
is even 5.6%. At the same time, rents in the regions of
10
southern Germany were already in previous years at a
0
level markedly higher than the national average. One
2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
of the main causes of this is the superior centrality of
shop Ladenmieten rents throughout in Deutschland Germany
average durchschnittliche development Entwicklung of der
even smaller cities in Bavaria.
shop Ladenmieten rents in in Bavaria
Bayern
Augsburg
Augsburg’s traditional prime location remains on the upswing. The era of stiff competition
from the City-Galerie seems long gone and customers have rediscovered Annastrasse,
Bürgermeister-Fischer-Strasse, and Bahnhofstrasse as traditional shopping streets. The City-
Galerie and the city centre have struck a balance and can once again coexist harmoniously.
Higher foot traffic and new retail concepts in the city centre have triggered additional
demand for new, modern retail space. As a result, companies such as Hunkemöller, Buddelei,
e-plus, Olymp & Hades and Bestseller have opened new stores in Augsburg. Nationally and
internationally successful retail chains continue to signal their interest in space, especially
along Annastrasse, where a Thalia bookstore and the American fashion designer, Tommy
Hilfiger, have already leased the former Kaufhalle space, which was most recently
underutilized, and have thereby perceptibly improved the attractiveness of Annastrasse.
The former Attinger-Passage, where the final selection of a letting partner is expected soon
after the change in ownership, is also an exciting area. The top rent for smaller spaces in
prime locations in Augsburg has increased by nearly 10% compared with last year. It is to
be assumed that the positive economic conditions in Germany, and particularly in the
economic region of Upper Swabia, in conjunction with the demonstrably increased
47

attractiveness of the Augsburg city centre, will continue to boost the upward trend in this
location. This also becomes clear when one considers that locations such as Maximilianstrasse
and Philippine-Welser-Strasse, which in the past were viewed as less attractive and given
lower rankings, are now the subject of intense scrutiny and demand among various retailers.
With respect to the investment market, it can be concluded that demand for appropriate
properties in the top locations is above average, and purchase prices have once again risen
accordingly. The top purchase prices now being paid range up to 18 times the annual net
rent, and in isolated instances even reach slightly higher values.
Coburg
A city occupied with itself: That is the impression the European university city in the north
of Bavaria gives the outside observer. It seems here as if political aspects contend with large
economic sections. One incident that embodies this attitude is the ballot initiative of April
22, 2007, in which the majority spoke in favour of the so-called “New City Centre Concept.”
This concept was presented by a group of local entrepreneurs headed by Michael Stoschek
(Brose Group). In some areas of the city’s political life, this concept met with no approval
at all, instead igniting heated arguments. These debates culminated in the secession of part
of the CSU political party’s council fraction after the ballot initiative turned out in favour
of the New City Centre Concept.
At the same time, everything could be so simple in Coburg. The city has a good income
situation due to its strong financial sector companies (Brose, HUK-Coburg, etc.). Thanks to
historical developments – for instance its renowned status as the city of residence of the
Dukes of Saxe-Coburg until 1918 – the city is equipped with breathtakingly opulent buildings
in very good condition and a stunningly beautiful palace square with adjacent palace that
is ideal for open-air events. The high point of any tour through the city’s history is surely
the Veste (Fortress) of Coburg, which rises above the city and is the second-largest maintained
fortress in Germany. All of these points draw large numbers of tourists each year.
The city clearly shows that it is healthy. For example, the Marktplatz, which is lined by historic
buildings and represents the starting point for the Spitalgasse prime location, was refurbished
at considerable effort and expense last year. Cafés, restaurants, and so on invite visitors to
linger and stroll at leisure. A visitor walking down Spitalgasse toward the Spitaltor notices
the renovated Müller drugstore and WEKA department store, a local full-range retailer.
Next to the WEKA department store, one then arrives at a truly distinctive location for
connoisseurs of the retail trade. An H&M store with a small entry area and large sales floor
on the first upper level, which can be reached only via a stairway from the ground floor
and runs across three buildings (!).
Chains such as McDonalds, New Yorker, and Orsay round off the picture. Passing through
the Spitaltor onto Steinweg, which is home to K&L Ruppert, among others, one quickly
determines that both Steinweg and Mohrenstrasse, with its Galeria Kaufhof, are no longer
48

to be considered true prime locations, but are rather outlying Class A or B locations instead.
Strictly speaking, only the short stretch from the Marktplatz to the Spitaltor can truly be
considered an absolutely prime location.
The key economic figures for the city of Coburg must also be viewed separately. First, it is
clear that Coburg has a very poor infrastructure connection. While it is true that there is a
certain level of activity at the moment and that stretches of an autobahn are being built
in the direction of Erfurt, all in all, visitors to Coburg are confronted in some cases with
approaches of about 80 kilometers via A-roads rather than autobahn. This, however, also
leads to the fact that purchasing power remains for the most part where it is, because Coburg
residents also consider driving to other cities bothersome.
And that also explains why the entire area surrounding Coburg relies very strongly on the
city itself as a shopping location. Alternatives are simply too difficult to reach. A sales volume
figure of 138.1, paired with a purchasing power figure of 103.5 and a centrality level of
133.4, speak for themselves. (Forecast values for 2007, source: BBE)
And yet Coburg as a retail location needs to pay attention to ensure it does not let time
pass it by. It would be desirable for the city’s economic and political sectors to pull together
to push the historic city of Coburg forward again. Rents in Coburg pay tribute to the
leisurely pace of commerce and have lingered at about the same level for years.
Erlangen
The city of Erlangen, home to Siemens, is bracing itself for an upheaval of the entire retail
landscape due to the opening of the Erlangen Arcade, in the fall of 2007. The effects of
the new centre should not be underestimated, but unfortunately cannot yet truly be
estimated. At the same time, the question being anxiously asked is whether the arcade, a
project of the Essen’s developer mfi, will strengthen the city centre’s retail trade on the
whole as opposed to the surrounding area by increasing the level of centrality, or whether
the purchasing power will simply be spread throughout the location, leaving the city centre
facing a corresponding downturn in its own retail trade.
The majority of Erlangen residents believe that the arcade will bring the city both new jobs
and greater purchasing power and shopping quality. Otherwise, the fact that about 60%
of Erlangen voters decided in favour of construction of the shopping centre in two
referendums on the subject cannot be explained. In Würzburg, on the other hand, the
majority decided against mfi’s arcade plans just a short while later. The high purchasing
power and very high level of centrality of the city of Erlangen permit us to hope that no
negative scenario will come to pass and that the city can absorb the growth in retail space
and cope with the newly opened businesses.
The design of the Erlangen Arcade, with a direct connection to the Werner-von-Siemens-
Hochstrasse and thus linkage to the A 73 with its micro layout in the Nürnberger Strasse
49

pedestrian area, does, at any rate, offer a good likelihood that the existing centrality will
be enhanced and Erlangen’s capability as a shopping city will be further improved.
If the city additionally succeeds in drawing new groups of buyers from the surrounding
areas, the retail trade in the city centre and the shopping centre will be able to coexist well
alongside and with each other. However, this task won’t be easy. The retail trade in the
neighbouring city of Nuremberg is not sitting idly by; instead, it is attracting customers
with its many attractive new operators.
Some of the changes currently to be seen on Nürnberger Strasse are primarily attributable
to the opening of the Arcade. For example, K&L Ruppert is moving into the Arcade and
will be replaced at its old location by Müller Drogerie. In a transaction brokered by COMFORT
Munich, Fortis-Bank will soon implement its Credit4me concept at Bonita’s previous location
on Nürnberger Strasse. These changes will also be followed by others here and there.
Another effect is that the rents for traditional prime locations have been subject to pressure
due to the additional space offered, with the result that Erlangen has not been able to
participate in the general trend toward rising rents throughout Germany.
Ingolstadt
“Peace, Joy, Shopping Mile“ was the Süddeutsche Zeitung’s headline on October 4, 2006.
It’s hard to find a more fitting way to describe the current situation in Ingolstadt. The
“dreaded” factory outlet, Ingolstadt Village, has validated its existence over the past few
years, having successfully opened its second stage of construction with approximately 5,000
square meters of additional space. The third phase of construction, also measuring
approximately 5,000 square meters, is in the planning stage. WestPark, the second large
shopping agglomeration outside the city centre, also had reason to celebrate in 2006. More
than 100,000 visitors came during the week of its 10-year anniversary celebration, and anyone
who thought the city centre would be bled dry by these external shopping centres was
completely mistaken. The city centre, with its excellent Ludwigstrasse location, Bavaria’s
first pedestrian area, is still attractive and extremely popular.
Redevco was able to report the opening of an approximately 1,500 square meter retail space
for Esprit in its Ludwigstrasse 12 project development. K&L Ruppert will give up its old location
on Theresienstrasse, and is already showing off its modern look in a new building at the
former Wöhrl site, in an excellent and very dominant corner location, also in the middle of
the best part of Ludwigstrasse between Moritzstrasse and Kaufhof. The City Arcades, which
opened in the Fall of 2005 in the former Wagner building, have retail space on five levels
and seem to be doing better than many had expected. But even in the supposedly weaker
area between Kaufhof and Paradeplatz, Ludwigstrasse has recently experienced an increase
in offerings with interesting new – and now established – renters, including Jack Wolfskin
and Glenfield. As a result, pedestrian numbers on Ludwigstrasse have also increased
significantly overall. Along with the developments mentioned above, rent prices for retail
50

spaces have not only remained stable, but have even
increased by about 15% in the last two years. For smaller
shops, rates currently remain at a rate of about 80
Euros/square meter.
Since 2006, the market for real-estate investments has
paralleled this positive development. Potential investors
are more interested in buying real estate in Ingolstadt
than ever before. For example, the properties at
Ludwigstrasse 18 and at the corner of Ludwigstrasse
and Schmalzingergasse have found a new owner in the
last year. Here it can be mentioned that sale prices for
existing properties were paid at up to 17.5 times the
annual net rental price.
The underlying data for Ingolstadt remains positive. In addition to a sales-volume index of
151.6 and a buying-power index of 106.1, the city has a centrality index of 142.9, which
impressively underscores the strength of this city within Bavaria. (Prognosis values for 2007,
source: BBE)
Munich
Average shop rents in prime locations
in Ingolstadt for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
Munich and its suburbs remain the greatest growth region in the nation. Traditionally, the
Bavarian state capital takes the top place in all kinds of rankings – usually by a wide margin.
The variety of companies and the mix of large and small businesses give the city a fair degree
of independence from economic cycles. With the Linde Group’s move from Wiesbaden to
Munich, the Bavarian capital has further solidified its position as the DAX capital, the seat
of eight DAX-listed companies. Munich’s citizens also have the most money at their disposal.
With a retail-relevant buying power of 6,778 euros per resident (BBE, prognosis value for
2007), Munich is unique at the top of all large German cities and metropolitan cities. And
Munich continues to grow. In May 2006, a record number of more than 1.3 million residents
were registered. In addition, according to a current study by the Feri economic research
institute, by 2013 the city’s economic power will increase by 26%. During the same timeframe,
more than 56,000 new jobs will be created. Not to mention the tourists. After an all-time
record year with 8.9 million overnight stays in 2006, 2007 looks to be the year in which the
figure will reach 9 million for the first time. 2008, too, the year of the city’s 850th anniversary,
should continue setting tourism records.
But first it is worth mentioning three outstanding Munich icons celebrating important
birthdays this year: the Hofbräuhaus turned 400, the Weisswurst (Bavarian veal sausage)
turned 150, and Karl Valentin would have been 125 years old. And a “Store of the Year
2007” is also located in Munich: Manufactum, in the “Alten Hof” revitalized by Bayerische
Bau and Immobilien Gruppe, was recognized by the Association of German Retailers
(Hauptverband des Deutschen Einzelhandels) in the “Living” category.
90
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Ingolstadt of
shop rents in Ingolstadt
51

Of course, all these data and facts have just as positive an effect on the local property market
as on the specifically retail-oriented property market. In particular, retail in Munich’s city
centre, and here above all in the classic prime locations, traditionally have the strongest
business volume as well as the highest rents nationwide. In comparison with last year’s already
very high level, a further increase can be seen of at least 3.5% for smaller spaces, as well
as almost 6% for larger units between 300 and 500 square meters.
An important reason for the traditionally excellent position of Munich’s city retailers is the
concentration of sales and locations in the city centre. In Munich, more than 28% of the
total retail-related space is downtown. This is an extremely high value, particularly for a
capital city where neighbourhoods generally play a very important role (Berlin, for example).
Corresponding reference values are sometimes markedly lower. Hamburg has 13% and
Frankfurt 23%. It therefore follows that the prime locations in Munich also traditionally
record the greatest frequency of pedestrian traffic. Various frequency measurements
confirm, independently of one another, that this is the case, and that at its peak, pedestrian
traffic totals more than 20,000 passersby per hour.
Many consumers also appreciate the variety of offerings, which among other things may
be a result of the still relatively low numbers of chain stores among the retailers, in
comparison to other capitals and large cities.
Munich, Rosenstrasse 1-5, Sporthaus Schuster
“The new Sport Schuster has an impressive shopfront”
52

Munich’s classic top prime locations are the only German ones to be consistently listed among
the world’s most upscale shopping streets with the highest sales-volume rates. It is therefore
not surprising, and perhaps even logical, that existing tenants in top locations have been
offered and paid key money by national and international chains wanting to secure one
of the sought-after locations. Particularly desirable are the absolute top prime locations at
Marienplatz, Kaufingerstrasse and Neuhauser Strasse, but also the somewhat more
significant locations at Weinstrasse and Theatinerstrasse as well as Rosenstrasse, and –
more popular once again – Sendlinger Strasse, especially the front section. The same goes
for the luxury locations of Maximilianstrasse and Perusastrasse, and Residenzstrasse and
Dienerstrasse are also gaining interest for upscale products.
It is noticeable that existing large-scale
retailers in particular are announcing
plans for modernization or remodelling,
probably in order to compete with the
numerous new residents and openings
of chains and concepts in recent years. A
few examples: Hertie in Munich is being
modernized and expanded. First the
ground floor will be done, then, in 2008,
improvements are planned for the
underground level, including subway
access. In September, the store will be
reopened under the Karstadt name.
Munich, Frauenplatz 7, Maredo
Jeans Kaltenbach, Munich’s traditional “Since its opening, Munich’s first non-smoking
jeans store founded in 1953, has been restaurant”
COMFORT: Letting
visually and stylistically rejuvenated in
the last two years, along with an
expansion and modernization of the sales
floors. By September, the Konen clothing store, located in a new building since 2001, will
rebuild and modernize about 3,000 square meters of the approximately 14,000 square meter
store. Ludwig Beck is planning to change its structural appearance dramatically, expanding
the space as well as upgrading its selection and individual profile with an increased
international focus. Renovations began in June and are scheduled to last through 2009.
Another of Munich’s top dogs, Modehaus Hirmer, will also expand with a new building on
the corner of Frauenplatz and Liebfrauenstrasse.
Some very good news, especially for neighbouring buildings and for people visiting the
Munich pedestrian area, is the fact that, after 35 years, the campaign to clean out and
remodel the city’s prime location is finally getting into gear. Nothing is finalized yet, but
there are serious discussions underway about at least putting the containers from the
Munich Lottery into storage, along with replacing the “furniture” (display cabinets,
seating, planters and possibly the lamps). Also under consideration is whether the partially
damaged and worn floor might also be resurfaced. There are also several large retail projects
in the city that will inspire further positive impulses with regard to the continued
53

development of the city centre. For instance, LBBW Real Estate, Inc., a subsidiary of the
Baden-Württemberg state bank, is coming up with numerous large projects for the Munich
market. Particularly interesting and ambitious among these is the “Alte Residenzpost”
project at the corner of Maximilianstrasse and Residenzstrasse, along with the
renovation/revitalization of the underground shopping passageway at Stachus/Karlsplatz.
In addition, LBBW and its partners are involved in the “Süddeutscher Verlag Area” project
in the Hacken district. Market participants are also following the future development of
Rieger City at the Isartorplatz. After the moving out and relocation of Bernhard Rieger
Pelzmoden, Inc., to Residenzstrasse, the Maxx cinema is almost the only prominent renter
left. The property, with a total of about 27,000 square meters of space, has been considered
a problem for some time. In December 2006, the U.S. investor, Värde Partners, took over
the Rieger block from the HVB Real Estate Corporation as part of a portfolio with 86
properties nationwide. It will be critical to see whether or not a consistent vision can be
developed for this property.
Further potential for Munich retail is promised by the Alte Akademie/Statistical State Office
area on Neuhauser Strasse. The owner, the State of Bavaria, wants to decide on the sale
and future use of this unusual prime property in the middle of the pedestrian area by this
year. With the seller’s request that the future investor use only 15,000 of the area’s
approximately 25,000 square meters for commercial purposes, financing the construction
of a scientific centre on the remaining 10,000 square meters, means that the bar is set fairly
high. In addition, the new investor in this public-private partnership must fund the Statistical
State Office’s move to Giesing. In doing so, finance minister, Faltlhauser, calls upon an
established model that was used in the privatization of the Alter Hof and the
“Maximilianshöfe” project. Nonetheless, there have already been numerous expressions
of interest. Unfortunately, the Deutsche Bahn cannot keep up with the combined vitality
of all these large projects in the city centre. The futuristic new 350 million euro
building planned for Munich Central Station is in danger of failing due to self-inflicted
financing problems.
Using the example of Munich, the following observation can be made about the previously
observed common trend of shortening the prime locations because of chains’ strong focus
on the prime lots on these locations. It is true that particularly spaces in the prime locations
of top cities continue to be especially desirable. At the same time, as a result of the
growing number of widely-varied renters seeking spaces, new rentals can also be seen in
places that would be classified as waning A locations or even B locations. As a result, Tal
in Munich is full of attractive new tenants. Citibank has opened its largest German branch
at Tal 24; Apple’s business partner, Gravis, opened the doors of its 30th national branch
at Tal 38; and at Tal 31, the fifth Maggi cooking studio is projected to open in the fall. The
last two of these renters were handled by COMFORT Munich. In addition, the new branch
of Kentucky Fried Chicken is to be opened at Tal 27 in Fall 2007. Another example of the
breadth of the requests can be seen in the trendy Gärtnerplatz district. At
Buttermelcherstrasse 2, also arranged by COMFORT Munich, the Danish furniture chain,
BoConcept, has opened up in approximately 500 square meters of the tradition-rich
Rosipal building.
54

Schwabing, however, is the district
moving up in terms of chain retail; at
the corner of Leopoldstrasse and
Hohenzollernstrasse, a whole group of
current and future project developments
and new rentals is setting off a veritable
run on properties. It started off with Zara
in the former Marmorhaus cinema on
Leopoldstrasse, and Esprit in the former
Hotel International at Hohenzollernstrasse
9. New arrivals are Miss Sixty and
Marc’O Polo, also in the part of
Hohenzollernstrasse bordering Leopoldstrasse.
In addition to these new tenants,
two further project developments are
worth mentioning. First, there are plans
to rebuild the “dead” Hohenzollern
passageway connected by Hohenzollernstrasse
3, making it into an attractive,
ground-level shopping space for a single
occupant; second, with the support of
Project study Munich, Leopoldstrasse 41, Tengelmann
CENTRUM: Project developer/owner
COMFORT: Consulting, Letting
Munich, Buttermelcherstrasse 2, “Rosipalhaus”,
BoConcept
COMFORT: Letting
55

COMFORT Munich, CENTRUM is also planning another project development on the site of
the property currently in use by Tengelmann at Leopoldstrasse 41. After demolition and
reconstruction, more than 3,000 square meters of retail space will be created here, used by
two large-scale top renters. One of the two will be Tengelmann again, with an ultra-modern
supermarket up to “Schwabing” standards. The increasing concentration of national and
international chains, particularly in the textile market, has created a completely new quality
of location here with further potential. Attractive rental and sale prices can be expected.
Despite all this, Munich residents and visitors do not spend their money exclusively in the
city centre, in the trendy Garten district or in Schwabing, but also in the outlying shopping
centres. In addition to the Olympia shopping centre in Moosach, with approximately 56,000
square meters of shopping area, and the PEP (Perlach shopping passageway) in Perlach with
around 50,000 square meters of shopping area, both well established for many years, there
are also the Riem Arcades, which have been open since 2004 with about 30,000 square meters
of space. They will be experiencing some homegrown competition in the future, since the
Essen’s mfi is also planning the Pasing Arcades with about 21,000 square meters of shopping
area. The first groundbreaking can be expected at the end of 2007. On December 8, 2006,
Fondara investors laid the cornerstone for an approximately 16,000 square meter shopping
centre in the new area of the Nordheide district. In the course of the Freiheim neighbourhood’s
development, as in Nordheide, a neighbourhood centre of similar dimensions will be
constructed. The ring of shopping centres will finally close in the south, where various
locations such as Ratzingerplatz and the E.ON area on Drygalski-Allee are under discussion.
Significant vitality has been, and is still, seen in the
Munich real estate investment market. Foreign investors
also bought a large number of prominent properties. For
example, the Maximilianhöfe and the house at
Kaufingerstrasse 18 were sold to Ireland with Hennes &
Mauritz; the Lenbach Gardens to Austria; the Elisenhof
to America; and the Munich Stock Exchange to the
Netherlands. The property on Kaufingerstrasse, however,
with Zara as the primary renter, was sold to a private
German investor. Factors affecting the rise of real estate
prices have continued to increase. Currently, properties
in top prime locations in the Munich pedestrian area are
bought at a high of up to 26 times the yearly net rental
price, which provides to a gross initial rate of return of
about 3.85%.
Nuremberg
Even though the previous market report tentatively stated that rental and purchase prices
in Nuremberg had bottomed out, and the trend was now clearly showing an increase, the
actual development nonetheless surprised most experts somewhat. Driven by the positive
56
Average shop rents in prime locations
in Munich for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
320
280
240
200
160
120
80
40
0
2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany
average Ladenmieten development in Münchenof
shop rents in Munich

economic cycle in Germany, retail in Nuremberg saw development that can be described
as extraordinarily good.
While in previous years, the majority of rentals was on the Karolinenstrasse-Hefnersplatz-
Ludwigstrasse axis, today – as was accurately projected last year – Breite Gasse has shown
an increase in quality. In the middle section of Breite Gasse, the Fielmann company has
secured the building at Number 62. After a general renovation of the property, customers
will be welcomed into a new and significantly larger store. In the area where Breite Gasse
becomes Ludwigsplatz, Esprit has secured the former Carnaby clothing store from the
Wöhrl Group and will open in the Fall with approximately 1,200 square meters of space.
Diagonally from those stores, the new Nike store is showing off a very modern face. Miss
Sixty/Energie, which previously resided there, has a new rental contract on Kaiserstrasse.
Fortis Credit4me, arranged by COMFORT, can also be seen at Breite Gasse 48.
On Kaiserstrasse, which seemed a bit isolated from the positive developments of the last
few years, the positive trend has now manifested itself as well. The vacancies are taken
care of, the sales floors have been modernized, and an attractive mix of luxury and upmarket
purveyors has been established. In addition to the relocation of Miss Sixty mentioned
above, the French label, Comptoir des Cotonniers, Marc Cain and Emerson Renaldi have
opened there.
Nuremberg, Breite Gasse 80, Nike
“The American market leader contributes to the urban enhancement of the Breite Gasse”
57

It is also worth mentioning the transformation of the Sebalder Höfe into a new “district”
of Nuremberg. There, well-known Berlin architect, Volker Staab, is tracing the nearly five
kilometer long line of the Nuremberg city wall, and creating a link to the centuries-old fortress.
Where until a few years ago the machines of one of Germany’s largest underground printing
presses still laboured deep beneath the surface, printing various newspapers and periodicals,
now there are offices, theaters, shops and apartments coming into existence. In addition to
140 freehold flats, lofts and student apartments, there are 4,500 square meters available for
a shopping mall, and 3,500 for offices. The family theater will have more than 200 seats.
From this perspective, one can almost report an overall rejuvenation of Nuremberg as a
retail destination, one that has become a great deal more attractive and more appropriate
for its central location. With a centrality index of 138.6, Nuremberg lags behind Munich
and Düsseldorf, but is still in third place ahead of Stuttgart, Cologne, Frankfurt and Hamburg.
(2007 prognosis values, source: BBE, Cologne)
This ranking, along with the economic strength of the
Nuremberg metropolitan region with its 3.5 million
residents, and a retail volume of around 4 million euros
in the city of Nuremberg, all underscore the importance
of this Franconian metropolis. The growing attractiveness
of Nuremberg, as a retail destination has also led to an
increased number of rental applications, as a result of
which rental prices for retail spaces have also increased.
In contrast to the previous year, an increase of about 10%
can be seen in the maximum rents for small storefronts,
currently up to 115 euros/square meter on Karolinenstrasse,
where a shortage of space has caused prices to
rise to 130 euros/square meter for smaller spaces (as for
as they are available).
Passau
Passau is eagerly awaiting the opening of the ECE “Stadtgalerie Passau” shopping centre,
scheduled to open in the Fall of 2008 on the former engine-shed site, with its main entrance
on Ludwigsplatz and with around 20,000 square meters of retail space. It is hard to predict
specifically to what extent the location, until now a classic top prime site between
Ludwigsplatz and Heuwinkel, will be affected by the shopping centre’s development. It is,
however, certain that Bahnhofstrasse will experience a positive surge from the new ECE
centre. We may cautiously predict that Passau’s extremely high degree of centrality, with
a value of over 218, will make downtown retail even more attractive with this shopping
centre development. Also interesting is the fact that the investment market has recently
become very active. APO, for example, has purchased Bahnhofstrasse 22 and 22a (primary
tenants are Wöhrl and Dresdner Bank), and Dawnay Day bought the C&A department store,
also on Bahnhofstrasse, at the end of 2006. Bahnhofstrasse 11, a development property,
58
Average shop rents in prime locations
in Nuremberg for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Nuremberg
Nürnberg

has also changed owners,
having been sold to a
private investor; so has
the Nibelungenpassage,
which was sold to the
British investment firm,
Merchant Place. After
the sale of the K&L
Ruppert building to a
German institutional investor,
COMFORT Munich
arranged the sale of the
property directly opposite
it, at the corner of
Ludwigstrasse and Wittgasse
2, to EC advisors
from Switzerland. As far
Passau, Ludwigstrasse/corner Wittgasse 2
COMFORT: Investment
as rental prices are
concerned, stable rents at the previous rate can be expected. In the last few years, there
has hardly been any change in this respect.
Regensburg
In Swiss economic research institute, Prognos’s, Future Atlas 2007, presented this Spring,
the city of Regensburg takes one of the top eight spots in the cumulative rankings; in other
words, it is classified as one of eight regions nationwide having outstanding prospects for
the future. For now, this provides scant comfort to retailers in the city centre, where for
the most part, only short term plans are being made. The downtown area has already had
to overcome the negative results of the Regensburg Arcades, an architecturally introverted
shopping centre, not integrated into the Old Town, that
opened in Spring 2002. More than five years after the
Average shop rents in prime locations
shock of this experience, the prime location, stretching
in Regensburg for shop locations
with retail sales area of 80–120 square meters
from Königstrasse across Weisse-Lilien-Strasse to the
in comparison to the average development
of shop rents in Germany
Neupfarrplatz/Drei-Helm-Gasse/Pfauengasse area,
70
dominated by Galeria Kaufhof, is again showing definite
60
improvement.
50
The first important impulse for this positive development
was provided by Spanish fashion chain, Zara’s, decision
to move into the former Rothdauscher building at
Neupfarrplatz/ corner of Residenzstrasse. Hunkemöller
took a new lease at Weisse-Lilien-Strasse 7-9. The highest
concentration of rental transitions in connection with
refurbishments and/or project developments, however,
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Regensburg
59

took place on Königstrasse. New tenants like Tommy Hilfiger, The Phone House, Bestseller,
Strauss Innovation, Bonita and Street One, among others, continue to strengthen downtown
retail in Regensburg. For the second year in a row, for the reasons mentioned above, top
rents continue to increase. For smaller storefronts, these are currently more than 9% higher
than they were last year. Rents for larger storefronts are more than 7% higher than last
year’s rates.
Rosenheim
The Chiemgau metropolis, with more than 60,000 residents, is the economic centre of a
region with approximately 600,000 inhabitants. Located in the southwest corner of the
country, Rosenheim is the first stop for Austrian and Italian tourists in Germany. The Austrian
border is only about 30 kilometers away, it’s only about 140 kilometers to Italy, and the
route from the Czech Republic and Hungary often leads through Rosenheim as well.
Rosenheim’s outstanding position as the region’s economic centre is also marked by the
fourth-highest centrality rating in Germany, with an index of 202.9. Combined with a
buying-power index of 103.98, this makes Rosenheim an El Dorado for retailers (2007
prognosis values, source: BBE).
Changes in occupancy at the classic prime locations tend to be rare, and vacant storefronts
are in demand. This continues to drive rental prices up. In comparison with last year, an
11% increase can be seen, up to 80 euros/square meter for small storefronts with between
80 and 120 square meters of retail space. For the particularly desirable larger spaces, top
rents have also increased more than 11%, to a solid 50 euros/square meter. Absolutely
fantastic for a city of this size!
Nonetheless, a structural problem seems to be in the offing for retail.
Due to a shortage of available space and a corresponding deficit of prospects in Rosenheim,
both international and national retailers, as mentioned earlier, are concentrating more and
more on the Salzburg region only 30 kilometers away. Since the border crossing and the
inconvenient currency exchange have been removed from the equation, shopping trips to
this region have become more and more attractive.
In addition to the very attractive Old Town in Salzburg itself, with its high-quality retailers,
the economic area around Salzburg has been massively strengthened by the permits granted
to build various shopping centres, and by the expansion of existing centres. Europapark,
always a prime address, has been expanded and now offers around 50,000 square meters
of retail space; it has become a home for all the leading European retailers. In addition,
the McArthur Glen Group’s FOC will be added in the Summer of 2009, beginning with the
construction of a two-storey shopping centre with 28,000 square meters of space. If it wants
to avoid falling victim to a gradual erosion process, the city of Rosenheim urgently needs
to support innovative new concepts to keep existing buying power within the city.
60

Würzburg
In December 2006 came the anxiously awaited showdown regarding the Würzburg Arcades,
planned by Essen’s project developer, mfi, with around 100 storefronts around the Würzburg
Central Station. In a public referendum, city residents had the choice to vote either for the
shopping centre, thereby going along with the centre’s supporters and the mayor, or
against it, backing the “guardians and protectors“ of existing retail in the classic prime
locations in the city centre. Before the referendum, extensive and emotional campaigns
were waged by both sides. The result very narrowly decided against the planned shopping
centre. mfi accepted the defeat, but at the same time pointed out that it would continue
trying to develop this location since it already owned the property. So there are still exciting
times ahead for Würzburg, most likely with more new plans being made. This will probably
not lead to peace in the upper section of Hauptbahnhof/Kaiserstrasse in the near future.
As usual, there are only a few changes to report in the classic prime locations: in the Fall
of 2007, the Hugendubel bookstore will open a new store at the former Breuninger location
at Kürschnerhof. With this move, Hugendubel has finally found its spot in a favoured top
location. New Yorker will then be able to present its young fashion collection in the former
Hugendubel building at Schmalzmarkt 12. Furthermore, textile chain Tally Weijl will open
a flagship store at a top prime location once the property at Kürschnerhof has been
renovated. On Domstrasse, the axis connecting Kürschnerhof and the renowned Wöhrl Plaza,
a new Media Markt has taken over the Duttenhofer Gruppe’s storefronts. This change has
had a positive effect on pedestrian frequency on Domstrasse. Kaiserstrasse, which would
have grown considerably more attractive as a connecting axis to the temporarily aborted
shopping centre, can still continue to expand, since the surplus demand for storefront space
means there are hardly any rental alternatives in Würzburg.
Once the previous owner-occupant, Volksbank Raiffeisenbank, has moved out, the property
at Marktplatz will be redesigned by the new occupant and used as the second distinctive site
for s. Oliver at the top prime location. The Volksbank itself will relocate to the other side of
the square. Several years ago, they had bought a larger storefront from the city of Würzburg
in order to construct a new building there. The entire
Marktplatz renovation plan will be financed by the city’s
Average shop rents in prime locations
in Würzburg for shop locations
income from this sale. This plan comprises a complete
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
surface renovation of the Marktplatz area and closes the
100
passage that until now provided access to the
90
80
underground parking garage beneath the square. All
70
measures will be completed by the end of 2007, allowing
60
Würzburg’s prime location to shine with a new brightness.
50
Meanwhile, other project developers are concentrating
on the “Mozart Area” near Kardinal-Faulhaber-Platz, a
good 500 meters from Marktplatz and the pedestrian
area. Assuming a constant pace of city development and
respectful treatment of the historically valuable
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Würzburg
61

neighbouring building, up to 10,000 square meters of retail space could be created there.
The high centrality index of 175.1, along with a sales-volume index of 178.2, show Würzburg
to be the site with the best sustainable opportunities for retail. (2007 prognosis values, source:
BBE) The numbers also suggest that an appropriately integrated shopping centre would
be manageable in Würzburg’s prime location, and could even increase its overall
attractiveness as a retail destination. Of course, a functional and logical connection to the
city centre would be a prerequisite. If the planned shopping centre, as in Karlsruhe with
its Ettlinger Tor centre, helps the city succeed in attracting new groups of shoppers from
the surrounding area, the classic retail area in the city centre and the shopping centre could
exist side by side without negative effects for either party.
This conflict was seen in Regensburg and Bayreuth, for
example, where the traditional downtown shopping areas
drew the shorter straw in their competitions with the new
centres, and where – particularly in Regensburg – it took
years of painstaking effort to recover.
Rents for storefronts in Würzburg remain stable. In
comparison with last year, there was no change. The
constant maximum rent for a storefront remains at 90
euros/square meter for a well-designed (ideal type)
storefront with about 80-120 square meters of retail space;
in exceptional cases, sometimes even more is paid.
62
Maximum rents in Bavaria in 2007
Stephan Cordier,
Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Aschaffenburg 68,642 104.0 174.6 55 35
Augsburg 262,676 102.0 131.6 98 57
Bamberg 70,081 102.6 161.6 60 35
Bayreuth 73,997 100.6 160.9 30 18
Coburg 41,950 103.5 133.4 50 30
Erlangen 103,197 115.4 123.7 65 35
Fürth 113,422 104.7 128.0 35 22
Hof 48,723 96.6 189.1 25 15
Ingolstadt 121,314 106.1 142.9 80 45
Kempten 61,360 104.7 194.8 55 35
Landshut 61,368 110.3 160.9 65 35
Memmingen 41,107 103.4 186.6 42 25
Munich 1,259,677 121.1 128.3
Kaufinger Str./Neuhauser Str./Marienplatz 285 180
Maximilianstrasse/Perusastrasse 225 130
Residenzstrasse/Dienerstrasse 150 80
Sendlinger Strasse 140 80
Weinstrasse/Theatinerstrasse/Rosenstrasse 210 125
Tal 130 65
Leopoldstrasse/Hohenzollernstrasse 100 53
Nuremberg 499,237 103.6 138.6
Karolinenstrasse 130 65
Breite Gasse/Pfannenschmiedsgasse 115 60
Hefnersplatz/Ludwigsplatz 115 60
Kaiserstrasse 70 30
Königstrasse 80 40
Passau 50,651 101.5 218.1 45 30
Regensburg 129,859 107.3 173.9 60 32
Rosenheim 60,226 104.0 202.9 80 50
Schweinfurt 54,273 100.2 186.5 35 20
Straubing 44,633 102.4 227.7 55 33
Würzburg 133,906 101.7 175.1 90 50

BERLIN
After 15 negative years, Berlin’s retail market has finally
Average shop rents in prime locations
been able to increase its sales volume for the first time
in Berlin for shop locations with
retail sales area of 80–120 square meters
in 2006 and 2007. According to the Berlin-Brandenburg
in comparison to the average development
of shop rents in Germany
trade association (HBB), Berlin’s retail revenues increased
270
240
by a nominal 1.9%, to 12.12 billion euros, in 2006. 210
Fortunately, this tendency stabilized in 2007, meaning 180
that a further increase can be expected. Tourism is one
150
120
of the most important growth factors in Berlin. In 2006,
90
the city was once again able to report an increase in
60
visitor numbers. During the course of the year, more
30
0
than 7 million tourists visited the city, which means an
2002 2003 2004 2005 2006 2007
increase of 9% compared to the previous year. The retail
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
association estimates tourists’ contribution to annual
sales at approximately 20%. Berlin commerce has also
Ladenmieten average development in Berlin of
shop rents in Berlin
created good conditions for positive sales volume development by setting longer opening
hours, even on Sundays during Advent. It should be emphasized that these sales volume
rates were reached even without the hoped-for increase during the World Cup. The increase
in storefront area in 2006 was relatively moderate, with around 100,000 square meters of
new space, a total of 4.35 million square meters. A significantly higher storefront area
increase will occur in 2007 because important shopping centre construction projects, such
as the “Alexa” on Alexanderplatz and the Wilmersdorf Arcades in Charlottenburg have
been completed.
Berlin’s polycentral structure necessarily places the city centres, with Kurfürstendamm and
Tauentzienstrasse in the West and Alexanderplatz and Friedrichstrasse in the East, in
competition with the many local district centres in Germany’s capital city. This is the main
reason that the downtown sites of Alexanderplatz/Friedrichstrasse and Kurfürstendamm/Tauentzienstrasse
are only at 11th,12th and 13th place in the ranking of Germany’s
most-visited shopping streets. Kurfürstendamm and Tauentzienstrasse remain Berlin’s bestloved
shopping miles. The largest portion of Berlin’s
retail-related department-store potential, at 32.8 billion
Rents in prime shopping streets
in Berlin (City West and Central)
euros, enormous in comparison to other large German
for shops between 80–120 square meters
from 2002 to 2007
shopping cities, is still divided between the two
250
downtown centres of East and West. The Schlossstrasse
200
location in Berlin’s commercially strong Southwest is
gaining scores of new clients through numerous
150
investments. The predicted displacement of West Berlin’s
100
crowds of shoppers, primarily to the detriment of the
downtown area around Kurfürstendamm/Tauentzien-
50
strasse, is called into question by the numbers above. The
0
2002 2003 2004 2005 2006 2007
losers here are primarily underdeveloped districts such
Alexanderplatz
Kurfürstendamm
as Tempelhofer Damm, for example.
Friedrichstrasse
Friedrichstraße Tauentzienstrasse
Tauentzienstraße
63

In the Kurfürstendamm/Tauentzienstrasse area, it’s worth mentioning the now-completed
renovation of KaDeWe, which was extensively rebuilt and repositioned in the upscale retail
market. The location has also been significantly strengthened by the opening of the textile
department store, Appelrath & Cüpper, along with the opening of the second-largest
Saturn Group electronics store in Germany. With the help of COMFORT Berlin, Inc., Castro
was able to open its sixth branch, with 1,000 square meters, at Tauentzienstrasse 18. With
the transfer to Hallhuber of the storefront formerly rented by Yves Rocher at
Tauentzienstrasse 18a, there are now no large rental units available in the medium term
on the desirable south side of the street.
If Kurfürstendamm and Tauentzienstrasse
are going to maintain their status
as top downtown locations in the
competition between the two Berlin
centres, further central strengthening is
urgently needed. Two measures could be
useful for this objective. First, investors
have long been planning to rebuild the
Kudamm Karreé as a shopping centre
with around 20,000 square meters of
shopping space. Second, in 2008 the
Bayrische Bau und Immobilien Gruppe
Berlin, Kurfürstendamm 48-49, Escada
COMFORT: Letting
will create approximately 20,000 square
meters of additional commercial and
restaurant space at the Zoobogen. These two measures alone would increase the retail space
from its current 270,000 square meters to 310,000 square meters. The NPC Group’s
development at Tauentzienstrasse 5 will also bring an increase of further 3,000 square meters
approximately. A sports department store is expected to be established at this location.
The rebuilding of the so-called Cumberland Building, where the Orco Group is planning a
mix of high-value commerce, cultural offerings and housing, will further strengthen the
already very well-established upscale and luxury area at the upper section of
Kurfürstendamm. It remains to be seen who can be attracted as a tenant for the former
Filmbühne Wien.
Plans to develop another site for large-scale retail directly next to the Zoo train station,
under the management of Deutsche Bahn, have meanwhile vanished into thin air.
Construction work in the eastern part of the city has also significantly increased in vitality.
The largest new opening of 2007 will be celebrated at Alexanderplatz, where a shopping
centre by Sonae Sierra, with around 54,000 square meters of space, will be a centre described
in superlatives. The Hines Group, too, in laying the cornerstone for an office building on
the corner property at Grunerstrasse/Alexanderplatz, has given the signal for increasing
density at this highly frequented location. Saturn was acquired as an anchor tenant, and
will double its sales area in this location with around 12,000 square meters.
64

Pedestrian surveys have shown that frequencies at Alexanderplatz, at least during the
week, are higher than at the downtown locations in the western part of the city. With the
crowd magnets of Kaufhof, C&A and Saturn, not enough total pull has been developed
for new customers yet. This overall image will change significantly after the opening of the
“Alexa” shopping centre, and certainly once more after the completion of the Hines project.
In general, the many people changing trains at the capital city’s largest transfer point are
expected to make the short detour through one of the numerous new shops. Sonae Sierra
will welcome Zara, Intersport, Media Markt, Douglas and Thalia, among others, as major
tenants in the “Alexa”.
The retail situation in the eastern part of the city does not, however, end with this description
of the developments on Alexanderplatz. Friedrichstrasse, much-scorned in the past, is
increasingly gaining significance for upscale international chains. An important milestone
in the street’s development was reached by MEAG in cooperation with the Hines Group,
as the service provider for project development of the “Upper East Side Berlin” office-building
district, where approximately 10,000 square meters of retail space are being created directly
at the famous intersection of “Unter den Linden/Friedrichstrasse.” The greater demand is
resulting in distinctly attractive rents. While the maximum rents in the last two years
remained between 90 and a high of 100 euros/square meter, in the meantime around 120
euros/square meter are being asked and paid. In terms
of Friedrichstrasse, it’s also worth taking a look at its
immediate neighbour, Gendarmenmarkt, where
Wolfgang Joop’s Wunderkind store is establishing
Carl-Schurz-Strasse (Spandau)
another high-fashion site. Two years ago, Josef Voelk
decided to establish the luxury boutique, “The Corner”,
on the opposite street corner; another branch will be
Gorkistrasse (Tegel)
opened soon at the corner of Knesebeck and
Mommsenstrasse in the western part of the city.
Another development in the eastern part of the city is
also worth noting. The property of the former Wertheim
complex on Potsdamer Platz, which was bought by the
Orco Group, will obtain a complex of approximately
88,000 square meters with shops, offices, luxury
apartments and hotels. Until now, it was generally
known that retail stayed within the bounds of the
Potsdamer Platz Arcades. Now another 3,000 square
meters of retail, which according to reports will be in
good demand, can be created at this site.
Probably the fastest-growing retail destination in the
eastern part of the city right now (aside from the
shopping centre developments) is Hackescher Markt.
Retail in upscale boutiques in narrow streets,
passageways and lively rear courtyards defines the scene
Karl-Marx-Strasse (Neukölln)
Müllerstrasse (Wedding)
Oranienburger / Rosenthaler Strasse
Schloßstrasse (Steglitz)
Teltower Damm (Zehlendorf)
Tempelhofer Damm (Tempelhof)
Wilmersdorfer Strasse (Charlottenburg)
0 20 40 60 80 100 120
2002 2003 2004 2005 2006 2007
65

here. International lifestyle brands, such as Puma and Tommy Hilfiger, are magically drawn
to it, even though spaces are being offered at rents that five years ago would have been
described as illusory – up to 100 euros/square meter.
One particularly interesting chapter is the development of Schlossstrasse, which in terms
of sales area, franchising and buying power can rightly be called Berlin’s second-largest
retail centre. With 160,000 square meters, Schlossstrasse currently only has half as much
retail space as the shopping district at Kurfürstendamm/Tauentzienstrasse. A large portion
of the new spaces have been newly created in the “Schloss” shopping centre, with 25,000
square meters of sales area, and also in the Tenkhoff Group’s so-called Schlossstrasse Centre,
with around 16,500 square meters of sales area. In addition, Forum Steglitz has been
completely modernized and expanded, and comprises more than 32,000 square meters of
sales area. The result of this development is the creation of a truly attractive retail destination.
And more big plans are already waiting in the wings. By 2009, the Karstadt building will
double to about 30,000 square meters of retail space, and its selection of goods will move
in the “premium” direction. This department store will be combined with the 70,000square-meter
shopping centre being built on the Wertheim property, which is currently
being created by Multi Development. Some experts view this rapid retail-space growth
critically, since even after the opening of the newly built Schlossstrasse Centre six months
ago, numerous storefronts still stood empty on the ground floor. Even Forum Steglitz is
not yet completely rented, half a year after the completion of its rebuilding work. In the
meantime, several of the re-letting contracts from various tenants in these shopping centres
have already been transferred to COMFORT. Since all the premium brands are now
represented at least once, and in many cases several times, at the Schlossstrasse location,
the question is which tenants does Multi Development hope to attract to the new shopping
centre. They may succeed in marketing the Boulevard Berlin concept, which envisages a
city-within-a-city with covered pedestrian
areas, bridges, galleries, terraces,
passages and restaurants in the upmarket
sector. However, there are also political
concerns regarding the size of the
project. Through to the year 2020, the city
of Berlin’s plans include a maximum retail
area of 150,000 square meters at
Schlossstrasse. The additional 36,000
square meters of retail space that the
Karstadt and Wertheim projects would
create will now be carefully considered,
particularly in light of their effects
on the Kurfürstendamm/Tauentzien-
Berlin, Walther-Schreiber-Platz1,
strasse district.
Schloss-Strassen-Centre
In other districts of Berlin, too, the development of retail locations is still exciting. At the
beginning of 2007, Metro Konzern opened the new Galeria Kaufhof on Frankfurter Allee
(Friedrichshain/Lichtenberg). This Kaufhof branch comprises around 8,000 square meters
66

of usable space on four levels, and was created as the third building stage of the ECE’s wellestablished
Ring Centre. The branch will replace the former store location at Lichtenberg’s
Anton-Saefkow-Platz. The new location at the Ring Centre is significantly better connected
to local public transport and the large transportation axes.
Wilmersdorfer Strasse in Charlottenburg has seen exciting times as a retail location. After
Karstadt, P&C and C&A had invested in the location in past years, the September 2007
opening of the Wilmersdorf Arcades gave mfi the crucial opportunity to make the street
attractive to a larger range of customers once again. Around 25,000 square meters of retail
space and 100 new shops were created. Also, across from the so-called Kant Centre, with
its tenants P&C, C&A and Media Markt, a series of office buildings are being modernized,
so that in the future the only real pedestrian area in the western part of the city will present
a more attractive face.
The cornerstone for the Hafen Tempelhof shopping centre was laid in the middle-class
Tempelhof district in May 2007. Approximately 19,500 square meters of retail space will be
created, with restaurants and recreational facilities. Tenants attracted to the centre include
Marktkauf, Hennes & Mauritz, and Media Markt. Whether SEPA’s planned shopping
centre, the second shopping centre next to City Hall, will be able to compete with
the shopping destination
at Hafen Tempelhof
remains to be seen.
According to the wishes
of community politics,
another 15,000 square
meters of retail are
supposed to be created
here. These spaces at City
Hall have already been
unsuccessfully spoken for
once before. Now the
question is whether SEPA
will be able to build another
Berlin, Project study Karl-Marx-Strasse 92–98
CENTRUM: Project developer/owner
shopping centre with the
COMFORT: Investment, Consulting, Letting
desired dimensions.
In the problematic district of Neukölln, Karl-Marx-Strasse in particular has suffered from
the significant expansion of the storefronts at the Gropiusstadt location (HFS’s Gropius-
Passagen). The Neukölln Arcades by mfi, a KapHag project with many functional deficits,
were not able to facilitate a change in the trend. Now project developer, CENTRUM, has
taken on the former Hertie department store in a prominent location. The plans envisage
a modern department store with eight rental units where the industry focus will be textiles.
Completion is planned for 2009. COMFORT Berlin, which initiated this project development
and is responsible for marketing, is optimistic, given current discussions, that it will soon
be able to report a complete rental of the project.
67

The example of Pankow shows how the growth of retail
space in Berlin has partially exceeded demand and is
pushing the bounds of political acceptance. Here, Aurelis
Real Estate planned to construct a shopping centre with
120,000 square meters of retail space on the former freight
train station. The Berlin-Brandenburg trade association,
however, spoke out against the development, since this
would have negated all its efforts to revitalize mid-level
retail in Pankow. Given the circumstance that other
established shopping centres can be reached in a 15-minute
drive (Schönhauser Allee Arcades and Märkisches Zentrum),
and considering the fact that the Fundus Group shopping
centre has for years provided an established shopping
focal point for the district on Breite Strasse, this decision
is welcome.
68
Maximum rents in Berlin in 2007
René Junge,
Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Berlin 3,395,189 94.8 109.0
Alexanderplatz (city centre) 120 70
Carl-Schurz-Strasse (Spandau) 50 23
Friedrichstrasse (city centre) 120 70
Gorkistrasse (Tegel) 50 25
Karl-Marx-Strasse (Neukölln) 40 22
Kurfürstendamm 180 120
Müllerstrasse (Wedding) 32 16
Oranienburger Strasse/Rosenthaler Strasse (centre) 90 30
Schlossstrasse (Steglitz) 105 65
Tauentzienstrasse 230 155
Teltower Damm (Zehlendorf) 80 40
Tempelhofer Damm (Tempelhof) 35 20
Wilmersdorfer Strasse (Charlottenburg) 85 60

BRANDENBURG
The atmosphere in Brandenburg’s economy is lightening
up along with the general upswing, and increasing
investments are slowly recharging the engine of
economic change. There remains only the anxious
question whether this is a lasting upswing that will lead
to further investments. Brandenburg retail could use
this kind of stability. The individual cities:
Potsdam
Average shop rents in prime locations
in Brandenburg for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
average development of
The state capital, Potsdam, in competition with the most
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
important retail destinations in the eastern region, holds
Ladenmieten shop rents in in Brandenburg
an impressive fourth place after Berlin, Leipzig and
Dresden; and it occupies first place in the entire region with its buying-power index of
95.5 in 2006.
Potsdam, as the largest city in the state of Brandenburg, has an average age of 41.4, making
it one of the youngest state capitals in Germany. And that’s not all. Counter to the trend
in the eastern region, it is also a growing city. From 2004 to 2005 (starting on 31.12.), its
number of inhabitants grew from 144,544 to 146,430. In addition to the natural population
growth, a steady influx of new residents is responsible for this. Long-term predictions
assume that the number of inhabitants will increase to around 160,000 by the year 2020.
The unemployment rate, at 10.9%, is significantly below the average both for the state of
Brandenburg and for the other East German regions. Most workers are employed in the
service or administrative sector.
Potsdam’s storefronts comprise a total of around 195,000 square meters of retail space, which
are primarily divided among the destinations of Brandenburger Strasse, Zentrum Babelsberg,
the Stern Centre shopping mall, Bahnhofspassagen, and the Markt-Centre on Breite Strasse.
With a retail area of approximately 1.3 square meters per resident, this reaches a value that
allows a certain amount of growth, in contrast to other key centres. This growth should,
however, occur mainly in the central district of Brandenburger Strasse/Friedrich-Ebert-
Strasse in order to strengthen the downtown area and balance out the non-integrated
commercial areas.
A decisive break for the Brandenburger Strasse shopping street, in a positive sense, was
the opening of the Karstadt building in 2006. Since then, pedestrian frequency has increased
consistently. After the opening of this department store, there was a noticeable increase
in demand, particularly in young-fashion chain stores. All the important young-fashion
brands are now looking for suitable storefronts at this location. For example, COMFORT
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche Entwicklung der
69

Berlin was able to provide a partner of fashion house s. Oliver with approximately 550 square
meters of rental space at Brandenburger Strasse 59/60, where it will open a new s. Oliver
clothing store in the Spring of 2008.
Nonetheless, the prime location of Brandenburger Strasse, especially in competition with
Stern Centre, the district shopping mall, has not yet been able to exploit its customer
potential, since aside from the Karstadt building there are only an H&M clothing store and
a small Strauss department store functioning as business magnets. A particular handicap
for the arrival of further clothing stores, which are looking for storefronts larger than 400
square meters, are the very restrictive historic landmark protection measures stemming from
the Baroque city design; these often hinder project
developments for retail spaces of this size. Here, the
Potsdam Chamber of Industry and Commerce’s demand
Average shop rents in prime locations
for “Historic landmark protection with a sense of
in Potsdam for shop locations
with retail sales area of 80–120 square meters
proportion” would be the solution to help strengthen
in comparison to the average development
of shop rents in Germany
the downtown area in its competition with the non-
90
80
integrated commercial destinations.
Rents on Brandenburger Strasse are increasing, and over
the course of 2006 up until the middle of 2007, they have
increased by a good 14 percent. For a shop with a retail
area between 80 and 120 square meters, depending on
its layout and location in the pedestrian area, rents are
between 60 and 80 euros/square meter a month.
Units between 300 and 600 square meters command
35 to 45 euros/square meter.
Cottbus
The top downtown shopping area of this
Brandenburg city, Spremberger Strasse, is
suffering considerably from the largescale
retail warehouses in the suburbs as
well as from the new so-called “Spree-
Galerie” outside the pedestrian area. This
shopping centre, along with “Lausitz
Park” and the “Cottbus Centre,” with a
total of around 600,000 square meters of
retail space, is preferred by Cottbus
customers. Although H&M and Esprit
provide crowd pullers in the pedestrian
area, pedestrian frequency is
comparatively low for a city with
approximately 100,000 residents. In this
70
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany
average Ladenmieten development in Potsdamof
shop rents in Potsdam
Cottbus, Spremberger Strasse 10-12, Dahlback
COMFORT: Letting

espect, the new “Carl-Blechen-Karree” shopping centre, which will have about 19,900 square
meters of retail space and around 85 shops between City Hall and Brandenburger Platz,
with a direct connection to the pedestrian area, is being welcomed from all sides. A large
convenience store, a specialist warehouse for consumer electronics, and a clothing store
have already signed rental contracts; the opening is scheduled for September 2008.
For shops with a retail area between 80 and 120 square meters in the best downtown
locations, rents are around 30 euros/square meter.
Brandenburg an der Havel
Brandenburg retail, seen as a whole, is largely taking place on the outskirts of the cities.
Large retail warehouses at the peripheries of cities, such as the Brandenburg shopping centre
in Wust, and the SB warehouses between cities, attract nearly all of the demand. By contrast,
the pedestrian area in Brandenburg’s downtown area has relatively weak pedestrian
numbers. Just two anchor businesses (H&M and an Intersport specialist store) cannot draw
enough customers. The Sankt-Annen-Centre, currently being planned by Egenter Project
Development, with around 12,000 square meters of retail space, might help. It should
contribute to the increased attractiveness of the downtown area, and draw higher pedestrian
numbers as a result.
Frankfurt/Oder
The city of Frankfurt/Oder, despite its location at the German-Polish border, is having
trouble drawing attention to itself. The city’s central shopping district is on Karl-Marx-Strasse,
although this shopping area has fallen more and more behind with a low percentage of
chain stores and empty storefronts. Major shopping activity is much more concentrated in
the Oderturm and Lenné-Passagen centres (30,000 square meters of retail space), although
several empty stores are noticeable here as well.
It is also clear in Frankfurt/Oder, which still has a relatively good centrality index of 108.2
and a buying-power index of 82.0, that where there is low buying power potential and too
much retail space in the outlying areas, the downtown will necessarily suffer. The Spitzkrug
Multi Centre on the Berliner Chaussee, on the other hand, enjoys consistent high demand
from chain stores.
Schwedt
Schwedt is a city with several shopping centres and a similarly suffering downtown. ECE’s
Oder Centre, with approximately 18,000 square meters of rental space and around 60
specialist stores in a non-integrated location, dominates commerce in this city. In addition,
there are the Uckermark Passages, with about 30 shops; the Old Town Passages, which are
71

directly in the Old Town; the Nord Centre, with around 16 shops; and the Schwedt Centrum
department store, which was one of the first new warehouses built in the Oder region in
the 1970s. The expansion of Kaufland was readily accepted by the locals; but only supply
shopping is taken care of here. The second storesy is nearly empty due to a lack of demand
for rentals.
72
Maximum rents in Brandenburg in 2007
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Cottbus 105,309 90.9 143.8 30 20
Potsdam 147,583 95.0 86.8 80 45

BREMEN
Downtown Bremen continues to suffer from the
traditionally strong and established retail destinations
in the suburbs and in the surrounding area of the state
of Bremen. This is reflected in the centrality index of
124.5, which is relatively low for a city with more than
540,000 residents. Retail customers from surrounding
areas are intercepted by Weser Park in Bremen-
Osterholz, Dodenhof in Posthausen, the Roland Centre
in Bremen-Huchting, and in the future also by the
Waterfront at the Bremen shipyard harbour. In addition,
the Krieger Group is planning to construct a furniture
market with 45,000 square meters of rental space near
Weser Park.
Average shop rents in prime locations
in Bremen for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
Space Park, probably one of the best-known failed real estate investments in Germany, has
found a new owner/investor and has been rechristened Waterfront Bremen. With a few
architectural changes and probably significantly lower rental prices for retail, they have
succeeded in winning over a number of well-known national retailers as tenants for the
shopping centre.
Due to Waterfront Bremen’s additional 44,000 square meters of retail area, demand for
retail spaces in downtown Bremen has naturally decreased. Many retailers who are not yet
represented in Bremen are being diverted to the shopping centre locations. The retailers
who are already represented in downtown Bremen, and would like to expand because of
new store concepts, are also taking the plunge and emigrating to the periphery.
The prime location in Bremen’s downtown, comprising Oberstrasse and Sögestrasse, Lloyd-
Passage and to a degree also Hutfilterstrasse, is short and small because of its topography
and history. Only around 15% of Bremen’s retail space is located in downtown Bremen. In
addition to the poor relationship between downtown Bremen and the peripheral areas,
certain store configurations are completely missing from the downtown area, which is
characterized by passageways and courtyards. Oberstrasse must be seen as the strongest
location. The Phone House and Frenz Optik were able to move in across from Karstadt.
Snipes, too, has recently opened on Oberstrasse. In the past, Sögestrasse has developed
from a luxury location into more and more of an additional consumer location, which can
also be seen in the high pedestrian traffic and satisfaction of retailers in this location. Local
retailers and purveyors of luxury goods have moved in the direction of the Katharinen-
Passage and Domhof.
The Lloyd-Passage continues to benefit from its direct parking-garage access, from the retail
spaces that partially open onto it from Oberstrasse, and from the magnet stores, Karstadt
and Galeria Kaufhof, which are directly linked to the Lloyd-Passage.
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Bremen of
shop rents in Bremen
73

Hutfilterstrasse can be described as the weakest part of downtown Bremen. However,
Hutfilterstrasse is also benefitting from the arrival of the Görgens Group, with its Kult/Planet
concept, and the giftware store, Das Depot, in the rear section of Oberstrasse. The small
department store, Strauss, is planning to move in at the end of Hutfilterstrasse, so we can
expect the location to improve in the future. Currently, however, there are still empty shops
and 1-euro stores in the rear section, which muddy the picture.
Downtown Bremen is now being further weakened by the Waterfront shopping centre.
The city has not learned from past mistakes and must now live with the fact that its
downtown area is fairly weak compared with other large German cities. Rents, too, have
risen only slightly in the past few years; this means that necessary real estate investments,
which would increase the attractiveness of the downtown area and create new store
configurations, are still lacking.
Bremerhaven
Bremerhaven’s retail is still marked by the city’s bad underlying economic data. Bremerhaven
has not yet been able to recover from the collapse of the German dockyard industry in the
1980s. Its buying-power index, at 81.0, remains significantly below the national average.
Through subsidies in the billions and together with the Federal government, the state of
Bremen is now trying to stabilize this location. The logistics sector and harbour commerce
are being expanded; investments are being made in food technology; a specialized research
centre for wind power is being founded; and tourism is being strengthened. Particularly
the shipping museum, the Klimahaus and the German Emigration Centre are intended to
make Bremerhaven more attractive as a tourist destination.
Bürgermeister-Smidt-Strasse, as a prime location, has the topographical and architectural
problem of being too long and too wide. Particularly the front section of Bürgermeister-
Smidt-Strasse is defined by empty storefronts and 1-euro stores. The middle section, near
Karstadt and the Columbus Centre, is the strongest. With
the arrival of Hennes & Mauritz near the Columbus Centre,
this area was further strengthened. Still, demand for the
storefronts is relatively low.
The planned 13,000 square meter space in the so-called
Mediterraneo will further weaken the already weak
Bürgermeister-Smidt-Strasse, given the limited demand for
storefront space. This is especially true because the site is
not directly connected with the downtown area.
In short, efforts to improve the Bremerhaven destination
have not yet had an effect on retail spaces. It will be
interesting to watch further developments.
74
Ansgar Müller,
Investment

Maximum rents in Bremen in 2007
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Bremen 546,852 98.0 125.0
Obernstrasse 110 65
Sögestrasse 115 70
Hutfilterstrasse 75 40
Bremerhaven 116,615 89.3 130.5 32 18
75

HAMBURG
As the second largest city in Germany, Hamburg
necessarily attracts the interest of every successful
national and international retail chain. Its underlying
economic data, and above all, the consistently strong
demand for retail space in the top locations of
downtown Hamburg, indicate continued strong growth
potential for the Hanseatic city. The downtown area,
which stands as a calling card for quality and growth,
plays a large role in this.
In 2006, stationary retail in Hamburg was at a sales
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
revenue plus of 2.5%; as in 2005, this is notably above
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Hamburgof
the national average, which was only around 0.8%. In
shop rents in Hamburg
fact, Hamburg retail has gained an additional 0.5 billion
euros in sales revenue since the year 2000. Of this,
approximately 1.8 billion euros are earned in downtown
Hamburg, emphasizing the downtown’s significant role. And this trend is continuing. For
the first half of 2007, Hamburg’s stationary retail showed respectable development with a
plus of 0.9% (adjusted for price), in comparison with the national average of minus 1.5%
(adjusted for price, nominally 0.8%).
Building on the overall development in 2005 and 2006, it can be assumed that Hamburg’s
growth will continue to be above the national average. However, which factors will most
strongly determine the future growth of Hamburg, the commercial metropolis, particularly
in the downtown area?
• The Hamburg World Economic Institute (Hamburgische Weltwirtschaftsinstitut, HWWI)
predicts that the economy will continue to soar. Economic prospects for the Hanseatic
city are better than they have been since 2001. While researchers expect a growth of 2.3%
throughout Germany, it might be as much as 3.7% for Hamburg. For 2008, too, the
positive economic situation will continue; the HWWI expects a gross national product
increase of 2.4%, and of as much as 4.2% for Hamburg.
• According to the Chamber of Commerce’s Spring survey of 1,600 Hamburg companies,
one in four businesses wants to increase its workforce in 2007; only 7.5% want to reduce
their employee numbers. At the same time, the companies rate their current business
situation as the best in 16 years.
• The Hamburg employment agency predicts that unemployment will continue to decrease.
The number of vacant positions in Hamburg is currently around 71,000.
• According to a new study by the Prognos Institute, in the years from now until 2030,
Hamburg will experience an average growth rate of 1.7%, ranking just behind the best
states, Bavaria and Baden-Württemberg. One in three job positions in Hamburg is located
in a growth sector. With this figure, Hamburg is at the top of all the states in Germany.
76
Average shop rents in prime locations
in Hamburg for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
240
210
180
150
120
90
60
30
0

• In comparison with other states, the Prognos study finds that Hamburg will be less affected
by the demographic change. While the majority of states can expect a shrinking population,
according to this study, the population of Hamburg will increase by around 85,000
residents by 2030.
• Income growth rates will remain above average.
• The population’s personal perception of their city is very positive. This is the finding of a
representative survey in which market research institute, Cima, polled 1,800 households.
According to the poll, the downtown areas of Munich, Hamburg and Berlin are Germans’
favorites. Munich, winning the votes of 14.6% of the people polled, has lost ground since
the last poll in 2002 (16.3%). Meanwhile, Hamburg, with 11.8%, has made a clear gain
since 2002 (6.4%).
• The harbour growth market and development of the harbour: for years, the harbour has
been the powerhouse of Hamburg commerce. The economic back room of the Baltic Sea
as well as China are helpful in this regard.
• Hamburg’s political determination to focus on growth has played a significant role in this
overall development and perception. With the “Growing City” (“Wachsende Stadt”) plan
for the future, the government has created recognizable, comprehensible and manageable
growth goals and measures that have significantly increased the drawing power for
investors, capital, knowledge and people.
• The continuing improvement in quality, particularly in the downtown area, has increased
drawing power and attractiveness. Tourism is seeing constant increases. In 2006, visitor
numbers increased to well over 6 million tourists. This represents an increase of more than
11% compared to 2005. Above all, the increasing number of foreign visitors is significant
in this context.
• The upscale market segment, with a wide selection of products, indicates a consistently
stable increase in sales volume. Luxury businesses, such as LVMH, PPR and Richemont, are
pleased to report annual sales volume growth in the double digits. Under the headline,
“Luxury is good,” even the trade journal addressed this development. The social function
of luxury goods is defined as differentiation in a mass and excess society where anything
can be bought at any time. The extraordinary is what counts. The desire for luxury has
grown as a result of nothing more than the “Thrift is good” motto. If you’re a clever
spendthrift, you can afford to show off occasionally. This decision-making pattern is
exclusively compatible with the downtown area. Emotional needs can usually only be
satisfied in the better downtown locations. These are the deeper reasons that the luxury
areas in the western part of downtown Hamburg continue to experience positive
development, and why there is continuing demand for spaces even in the neighbouring
districts.
What noticeable effects do these perspectives have?
Retail rents, too, are a product of supply and demand, of storefront productivity, and they
are an expression of the potential that retailers considering a move associate with a
destination. Accordingly, the level of retail rents is also a measuring stick for the productivity
of a location. Retailers generally decide on a location based on its economic features. After
employee costs, rental costs are a retailer’s second highest expense. The accompanying charts
provide an overview of the current rental price situation in downtown Hamburg. The
77

western downtown area has experienced a palpable
upswing, and the rents here are rising the most.
The rents at Neuer Wall have essentially drawn even
with the highly frequented Spitalerstrasse, meaning that
Hamburg now has three prime locations –
Mönckebergstrasse, Neuer Wall and Spitalerstrasse –
generating rents in excess of 200 euros/square meter.
What’s also interesting in this regard is a comparison of
rental price development in all the metropolitan cities,
looking at the median value of all the prime locations
assessed by COMFORT. Here it can be seen that Hamburg
has the highest values of any major German city.
The intensity of demand indicates that this rental price
development, which is just as above-average as the
increase in sales volume rates, will continue. Depending
on location quality, an annual rent increase of 5 to 10%
can be expected in the medium term.
Further Development
Both retailers and investors have recognized the situation
and are acting accordingly. The investment activity of
retailers and project developers, but also of investors,
shows an unshakeably positive attitude. The intensity of
demand is high and cannot be anywhere near satisfied
in the downtown area.
An important feature of downtown Hamburg is the
qualitative separation into the western and eastern
downtown areas, with their separate development
cycles. Mönckebergstrasse and Spitalerstrasse, for
instance, have been completely refurbished in the last
few years.
No major German city has changed an entire storefront
0
2002 2003 2004 2005 2006 2007
selection through investments and new occupants in
Berlin Cologne
such a short time or as thoroughly as in these two streets.
A majority of all nationally and internationally successful
retailers is now represented here. The next step will be
Frankfurt a. Main
Hamburg
Munich
the continued gentrification of Mönckebergstrasse. With an initiative of the
“Trägerverbund Downtown Project,” a lighting concept is being developed for
Mönckebergstrasse. This will further improve the visit quality and attractiveness of
this retail area.
78
10
Hamburg: percentage development of prime
locations and City East and West
9
8
7
6
5
4
3
2
1
0
2002 2003 2004 2005 2006 2007
% development of all prime locations
% development City East
% development City West
Shop rents in prime locations in Hamburg, 2007
240
220
200
180
160
140
120
100
80
60
40
20
0
Jungfernstieg
Mönckebergstr.
Neuer Wall
Poststr./Gerhofstr.
Spitalstr.
Comparison of rent development,
metropolitan cities
– Median value for all prime locations –
250
200
150
100
50

Still, there are definite developmental hindrances for the future that could cause the
eastern downtown area to fall behind. Due to topographical restrictions, the prime location
in this city district can no longer be expanded at will. Glockengiesserwall as well as
Steinstrasse prevent further development. Also, efforts involving the Binnenalster, parking
garages, the configuration of Gertrudenkirchhof, and Gerhart-Hauptmann-Platz have not
led to improvements or to the development of retail locations. As a result, future move-in
possibilities for national and international concepts remain limited in the eastern downtown
area. However, this also means that rental changeover, as a result of high demand, will
considerably increase the rents in prime locations.
What could change and/or improve this situation would be a creative downtown connection
with the Kontorhaus district, toward Hafencity, and a replanning of downtown high-rises
in the direction mentioned above. The “Trägerverbund Downtown Project” has also strongly
supported this development.
The completion of the Europa Passage was probably the most significant retail event of
2006. With regard to the improvement of visit quality, the Europa Passage has set new
standards through its urban development style and architectural solutions. The wide variety
of gastronomical offerings, too, has increased the length of customers’ visits, even if its
Hamburg, Mönckebergstrasse, Karstadt
79

quality and interaction with customers is
very one-sided. The high frequency of
customers in the entry and exit levels at
Mönckebergstrasse/Ballindamm shows
that a linking effect is being created
between the eastern and western
downtown areas, although with the
products on offer inside the Europa
Passage, it’s questionable whether the
upscale location at Ballindamm, and
furthermore in the western downtown
area, even needs the frequency now
being generated, qualitatively speaking.
The high number of entrances and exits
in various directions, as well as the five
shopping levels, do not necessarily make
orientation any easier for visitors. The
offerings are strongly chain-oriented and
aimed at a younger market. They do not
fill the gaps left by the existing Hamburg, Jungfernstieg 40, Bestseller
COMFORT: Letting
downtown offerings, as was originally
promised. Current findings indicate
more of a trend toward sales revenue
relocation than sales revenue increase. Accordingly, we might conclude that the Europa
Passage has enriched downtown retail space by a good 20,000 square meters, but the Passage
will not draw any additional downtown visitors in the future.
As in the eastern downtown area, there is high demand for space in the entire western
downtown area (Jungfernstieg, Gänsemarkt, Poststrasse, Gerhofstrasse, Neuer Wall, Grosse
Bleichen and Hohe Bleichen). However, in contrast to the east, the available public spaces
and building resources allow some development opportunities for the future. If we consider
the economic development described above, it follows that there will be a qualitative
improvement for the downtown area. The quality of developments will move less toward
mass (eastern downtown) than toward class (western downtown).
As a result of high demand, the considerable leeway in this city district will necessarily lead
to new arrivals in locations that were not previously a focus for expansion. This will mean
that rents move even closer to the rental prices in the eastern downtown area. It can be
assumed that in excellent locations in the western part of downtown, the rents will also
temporarily increase by 5 to 10%.
Now that the Business Improvement District (BID) has taken charge of the Neuer Wall and
the last third is developing toward the Stadthausbrücke, the other projects at Jungfernstieg
are also experiencing success, which supports the further enhancement of the Colonnades.
80

The included map again
illustrates the incredible
efforts that have been
undertaken in the western
downtown district. At the
Marktplatz, the formerly
somewhat restrained third
of Neuer Wall is now
receiving a great deal of
attention. The investor,
Newport, Inc., has
acquired the former
Bornhold property at
Neuer Wall 76-82, and will
strengthen the entire area
with a high-quality
development. COMFORT
Hamburg is supporting
and accompanying this
investor in its efforts to
gentrify the last third with
2,000 square meters of
retail space. (No. 1)
The contents of the next retail package in Hamburg will almost certainly be the building
authorities office at the corner of Neuer Wall/Stadthausbrücke. There are already ambitious
project development plans for this, envisioning around 14,000 square meters of retail space
and another connection between Neuer Wall and Grosse Bleichen.
Bleichenhof (No. 3) was sold to a well-known Hamburg investor several months ago.
Company insiders expect a new concept related to the building authorities office. Bleichenhof
itself has 800 parking spaces. The new owner of Kaufmannshaus (No. 4) is planning a
repositioning of the property, which currently does not do justice to Grosse Bleichen’s
importance in the retail market. The Alte Post (No. 5), which is also no longer up-to-date,
will almost certainly undergo a redesign. The start is set for 2008. Another project
development by the Famos company at Grosse Bleichen 34 (No. 6) will also strengthen this
street area. In the future, a more upscale offering will move into around 1,200 square meters
of retail space.
In 2004, in the architecturally high quality new construction at Hohe Bleichen 10, a restaurant
from the successful “Vapiano” chain (No. 7) was opened, the first in Germany, which
brought the entire area of Heuberg and Hohe Bleichen/Abc-Strasse into consideration for
alternative architecture and concepts. With the Linette company, a successful Hamburg
retailer has also arrived in the area. On the second storey of the same building, the trendy
restaurant “Die Bank” has opened, becoming a regular stop for Hamburg’s business world.
10
Hamburg, Retail development City West
2
8
7
3
1
9
4
11
6
5
81

(No. 8) Also, luxury hotels, Sofitel Hamburg at Alter Wall (No. 9) and Steigenberger (No.
10), are enriching this district. Finally, the Carlyle Group’s “Opernhof” project development
located right on the Gänsemarkt (No. 11), with more than 2,000 square meters of space, is
expediting the continued development of Dammtorstrasse and the Colonnades.
What constraints are there for further development?
There is a danger that the opportunities available in downtown Hamburg will not be
taken. A long term observation from 1992 to 2006 (by GfK GeoMarketing, Inc. 2007) clearly
shows that during this time period, retail-related storefront space in Hamburg increased
by a total of 20.1%, while the downtown area’s storefront space decreased from 15.6% to
12.5%. By comparison: cities like Munich, for example, which are strengthening their
downtown areas and creating enormous attractiveness and drawing power for the
surrounding area, generally have a downtown retail area percentage of about 30%.
Even the number of shopping centres on the periphery of Hamburg having more than
100,000 square meters of space has increased by 69% in the time period analyzed. This glaring
imbalance led to the circumstance that downtown Hamburg was ailing for many years, and
only managed to reverse the trend through the qualitative efforts made in the last few
years. Currently, Hamburg’s downtown, with 305,000 square meters of retail space, is not
yet well-enough armed to compete with the surrounding areas. Hanover has less than a
third of Hamburg’s population, but with 235,000 square meters of retail-related space
downtown, it has significantly more space. This imbalance needs to be rectified.
In this context, the Senate’s underdeveloped political drive must be criticized for its failure
to formulate an even clearer strengthening of the downtown area in its “Growing City”
planning programme. This would have guaranteed long term scrutiny for the idea of a central
destination. The goal of preventing further expansion on the edges of the city (district
centers) and in the periphery is only convincing when accompanied by a clear statement
encouraging the use of the positive features of the greater Hamburg area – with a
qualitatively and quantitatively adequate retail selection – for the benefit of the
downtown area.
Currently, this is not the case. And in the future, several peripheral retail establishments
will continue to gnaw away at the downtown area’s sales revenues. On Grosse Bergstrasse
in Altona, 14,000 square meters of storefront space will be created with the demolition of
the Frappant building. On Ottenser Hauptstrasse, project developer, DGAG/Pirelli & C. Real
Estate, is constructing a new office building with around 8,000 square meters of storefront
space for retail. The same project developer wants to create the Lurup Centre at Eckhofplatz
in Lurup, with 10,000 square meters of storefront space and a department store. After the
joint venture between ECE and Herman Friedrich Bruhn, Hamburger Strasse will be
reinvigorated. Here, the 53,000 square meters of storefront space (160 shops) will be
restructured and repositioned.
The 3,000 square meter expansion of the Nedderfeld Centre, to 17,000 square meters, is
already completed. The Krohnstieg Centre has provided a further shopping centre in
82

Langenhorn, but it had trouble establishing itself right from the start. In the Elbe
Einkaufszentrum, ECE would like to expand by 15,000 square meters, having just enlarged
their flagship centre, AEZ, by 17,000 square meters. The Wandsbeker Quarree in Wandsbek
will receive a massive expansion. mfi is considering an expansion to 50,000 square meters
in Rahlstedt. In Bergedorf, Fundus wants to combine its CCB with the ZOB building. There,
too, another 15,000 square meters are planned.
As we can see, the district centres are experiencing a massive invigoration. This has nothing
to do with the goal of ensuring suburban supply through the concept of central destinations.
The offerings are aimed at the downtown area. In addition, Hamburg’s commuter belt,
whether in Wedel, Pinneberg, Norderstedt or Ahrensburg, is also being invigorated,
preventing potential downtown visitors from driving to Hamburg to do their shopping.
It is true that Hafencity and, above all, the Übersee district, with its planned 400,000 square
meters of retail space, will create an additional draw and strengthen the downtown area’s
centrality. However, in addition to the attractions at Hafencity (the Elbe Philharmonic, the
international shipping and ocean museum, the cruise terminal, the new university and new
living spaces), the retail area must also be configured in a way that truly enriches and
complements the overall downtown retail market. In order to achieve synergy with the
established downtown retail, it is necessary to create a connection to downtown that
makes it easy for Hamburg visitors to frequent both the new and the old districts.
In the investment sector, Hamburg was able to benefit in a significant way from the currently
booming market. The previous year’s intake of 1.6 million euros was far exceeded by this
year’s approximately 4.4 million euros. In 2002, by way of comparison, the total volume
was around 1.3 million euros.
Characteristic of the attractive investment market is the high percentage of foreign capital,
of just under 70%. Foreign market participants have developed a special affinity for the
Hamburg market. Naturally, transaction volume is influenced just as much by the prominent
activity of the harbour’s-edge construction and Hafencity as it is by office-oriented use
downtown. The Free and Hanseatic City of Hamburg’s package sales to IXIS Capital Partners
Ltd. indicate the high attractiveness of the investment market, and have, of course, strongly
influenced statistics for 2006 as well. Overall, it can be assumed that more than 50% of the
transaction volume stemmed from portfolio sales.
In downtown Hamburg itself, there were only a few sales and/or purchases of office
buildings. Several open property funds sold Hamburg properties in the context of larger
real-estate packages. The “Davy House” consortium of private Irish investors bought Spitaler
Hof for 141 million euros, and the British Belgravia company bought the Altona train
station for 60-70 million euros.
According to relevant company analyses, the transaction volume in the first half of 2007
amounted to around 1.5 million euros. It is to be expected that around 4 million euros will
be reached in 2007 as well. Two significant transactions in the first two quarters were a
83

package by private investor Dieter Becken – 22 properties were sold to Morgan Stanley
Real Estate for around 670 million euros – and the sale of the Kaufmannshaus to RFR Holding,
New York, for around 85 million euros. Another important real-estate deal in the first half
of the year was Famos’s sale of the “Hühnerposten” to IXIS AEW for 60 million euros.
Fundamentally, the ownership structure in Hamburg does not leave room for brisk trade
in office buildings. The resultingly distinctive demand market indicates that, in the future,
significant retail destinations will have to deal with a continued decrease in gross initial
rate of returns lying somewhere between 4 and 4.5% for each property.
84
Maximum rents in Hamburg in 2007
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Hamburg 1,743,627 104.0 117.8
Jungfernstieg 165 110
Mönckebergstrasse 195 120
Neuer Wall 220 105
Poststrasse/Gerhofstrasse 180 120
Spitaler Strasse 220 138

HESSE
With its economically strong metropolitan centres
located in the Rhine-Main Region, above all Frankfurt
am Main and Wiesbaden, but also with strong cities
such as Kassel in the heart of Germany, Hesse is among
the most popular locations for nationally and
internationally successful retail chains.
Frankfurt
Average shop rents in prime locations
in Hesse for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
Besides significant investments in and around the
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Frankfurt shopping boulevard, Zeil, most of Hesse’s
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
metropolitan locations are experiencing a build-up in
Ladenmieten shop rents in in Hesse
Hessen
their retail locations. The unchallenged top position
amongst interesting real estate locations in Hesse is
occupied by Frankfurt. The renowned shopping streets Zeil, Goethestrasse, Fressgass,
Steinweg and Biebergasse still remain the most popular target locations for national and
international chains. Whereas their demand had been exclusively limited to the Zeil for a
long time, the premises rented by Zara at 2 Boersenstrasse/corner of Biebergasse and also
the Gucci relocation within the Goethestrasse (into house number 5, previously occupied
by Miele) with a distinctly enlarged floor space indicate that the shopping streets located
all around the Zeil are also gaining in importance. The Frankfurt authorities have also realised
this and are planning to provide their inner city with even greater attractiveness in the
near future through investments. Their package of measures also stipulates the closure of
the section between the Katharinenkirche church and the Kaufhof department store,
creating an uninterrupted pedestrian area stretching from the Konstablerwache right up
to the Goetheplatz. The frequently criticised section between Hauptwache and Stiftstrasse
is also to be refurbished as part of these investments. The shopping boulevard, Zeil, will be
equipped with new lamps and a new pavement in parts. The four existing catering pavilions
will disappear and be replaced by two more attractive ones. 50 plane trees will likewise be
removed. This programme is earmarked for completion in the Spring of 2009 to coincide
with the postponed opening of the large-scale FrankfurtHochVier project.
Public interest is mainly focussed on both the “honeycomb building” projects at 65-69 Zeil
with the Ludwig Görtz lease on over 2,000 square meters, and the FrankfurtHochVier topic,
which has been rumbling on for years, with a not yet defined tenant mix. As of August
2007, the only anchor tenants to be ensured via tenancy agreements in the shopping mall
of the FrankfurtHochVier “Zeilforum” project with its daring, vertical concept are SATURN
(8,000m2 ), Anson´s (3,500m2 ), S. Oliver (1,700m2 ), the Fitness Company (5,000m2 ) and a REWE
supermarket (2.200m2 ) in the basement. The spaces facing the Zeil are undoubtedly bound
to find attractive takers. However, the interior interconnection and, most of all, the sustained
acceptance of this “vertical mall” may yet present difficulties.
100
90
80
70
60
50
40
30
20
10
0
85

The only mobile communication provider to be
previously left out, e-plus, has now also been able to
secure a space on the Zeil. The company’s intensive search
was finally crowned with success in house number 83,
in the best section, and one needs to assume that this
area is currently bound to be one of Frankfurt’s
comparatively dearest locations. The frequently
reported, large sums of key money some retailers are
apparently prepared to pay are partly also a factor in
Frankfurt. However, as long as the spaces in the
“Zeilforum” have not been allocated, this willingness
should only be evident with some of the foreign chains
hell-bent on occupying a Zeil location.
Wiesbaden
The demand for retail spaces in Wiesbaden also remains high. The two central projects –
one being the “Liliencarree”, a multi-development at the main station featuring virtually
all the better known inner city retail concepts such as New Yorker, s. Oliver, Thalia, etc., and
the other, the “Luisenforum” at the corner of Kirchgasse and Luisenstrasse – have been
able to cover this demand in parts with the spaces they provide. Yet many chains are only
interested in rentals in the Kirchgasse. Either because centres are unpopular as rental
objects or also as a second location within Wiesbaden.
New concepts such as, for example, the Polish shoe chain,
Gino Rossi, at 51 Kirchgasse, brokered by COMFORT
Düsseldorf, or Geox, the successor of the only briefly
existing Schiesser group concept, Kju, at 38 Kirchgasse,
provide welcome variety in Wiesbaden’s pedestrian area
with their fresh shops which are not yet established in
every cityscape.
In addition to the developments just mentioned, a
redesign of the two properties at numbers 11 and 13
Kirchgasse is still under discussion. However, municipal
stipulations render this project very complicated for the
owner.
It must be noted that Kirchgasse, as Wiesbaden's top
prime location, still remains the city’s best address and
unequivocally continues to enhance its positioning even
further. In parallel to this, the Langgasse as yet fails to
provide an alternative option for larger chains, at least
at this moment in time.
86
Average shop rents in prime locations
in Frankfurt am Main for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
240
210
180
150
120
90
60
30
0
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany
average Ladenmieten development in Frankfurt of a. M.
shop rents in Frankfurt am Main
Average shop rents in prime locations
in Wiesbaden for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Wiesbaden of
shop rents in Wiesbaden

Darmstadt
Darmstadt has meanwhile made a name
for itself as a retail location in the public's
eye. Besides the development of the top
prime location, Suchardstrasse, with spaces
rented by Zara, Fielmann and Esprit, as
well as Thalia, the Ernst-Ludwig-Strasse is
increasingly becoming a focus of chainstore
interest. Following the opening of
the street-wear store, Snipes, at number
24 Ernst-Ludwig-Strasse, this street now
presents a slightly rejuvenated range
which, in connection with the shopping
centre, “Boulevard”, opened in 2006 as a
connection between Suchardstrasse and
Ludwigsplatz – which includes a large
Mango store – ensures that there is a
broadly varied product range available
for all target groups. A fact that has not Darmstadt, Schuchardstrasse 10, Esprit
remained hidden to the young fashion COMFORT: Letting, Investment
provider, Topaz, which is exploiting this
perfect circular track with its “Madonna” concept and has rented a space at 3 Ludwigsplatz,
immediately adjacent to the main entrance of the “Boulevard”. Demand continues to be high
and any spaces that do become available are distributed to the highest bidders.
The Sonae Sierra shopping centre development Weiterstadt with over 170 shops could
potentially detract from Darmstadt's inner city in the medium term, if a countermeasure was
not already in planning in
the shape of a further inner
city shopping centre right
next to the Luisencentre.
Darmstadt developer, Karl-
Herrmann Klotz, has
announced the development
of a shopping centre
next to the palace which
will apparently provide over
30,000m2 of retail floor
space and approximately
1,000 parking spaces.
However, an inner city
problem resulting from this
can, on the other hand, not
Darmstadt, View of the Ernst-Ludwig-Strasse
be excluded entirely.
87

Kassel
Kassel benefits from the continuing positive economic climate and is experiencing a
constantly high demand for retail spaces, in addition to the city’s attractiveness as a cultural,
economic and social metropolis in northern Hesse with more than 3 million visitors a year.
The Obere Königsstrasse has been able to continue gaining in attractiveness thanks to the
openings of Zara, Thalia and WE Fashion at number 30, their retail spaces totalling more
than 5,500m2 . A veritable Who’s Who of Germany’s retail landscape is by now represented
in Kassel and marks the absolute top location between the Königsplatz and Opernplatz
squares. There are no vacant properties to be found here. The low fluctuation in the prime
location contributes to the fact that the rents also show a positive development here.
Whereas the Untere Königsstrasse and similarly the continuation of the Obere Königsstrasse
suffer from the ECE-operated, “City Point Kassel” centre, and can only be classified as Bclass
locations. However, all-in-all, Kassel continues to be in demand as a location and is a
fixture on the expansion lists of national and international chains.
Giessen
The development of the town of Giessen
can also be termed as positive. There can
be little doubt that the CENTRUM
Grundstücksgesellschaft GmbH’s project
development at 83 and 85/85a Seltersweg
with tenancy agreements brokered by
the COMFORT Düsseldorf GmbH for s.
Oliver and the Dutch textile chain, The
Sting, featuring retail spaces of over
1,000m2 each, represents a valuable
addition to the inner city. In addition to
the two large tenants, the Dutch young
fashion chain, WE-Fashion, is renting a
space in the property at 75 Seltersweg,
previously occupied by Werdin and hence
demonstrates that Giessen is also
perceived in a positive light by foreign Giessen, Project study Seltersweg 83–85,
s. Oliver, The Sting
chains. The upper end of the Seltersweg
CENTRUM: Project development
is meanwhile developing a focus on COMFORT: Investment, Consulting, Letting
textiles and clothing. Esprit and Madonna
had opened new shops here as early as
2005 as well. The main reason being that
the Seltersweg functions as a retail location, featuring an outstanding pedestrian volume
and greater customer acceptance than most other pedestrian areas in medium-sized towns.
The high demand for retail spaces in Giessen’s top prime location can not be completely
88

satisfied owing to the preservation orders applicable to
many of the buildings and the rather small-sized structure
of the estates.
The town’s catchment area is large and the competition
provided by the ECE-managed shopping centre, “Forum
Wetzlar”, in the neighbouring town has also not detracted
from Giessen’s central positioning. Even if the “Galerie
Neustädter Tor” does not exhibit the magnetism one may
have hoped for, it still needs to be seen as a positive
development, if only because the shopping centre is not
detracting from the top prime location of Seltersweg.
Maximum rents in Hesse in 2007
Sascha Loser,
Head of Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Darmstadt 140,562 108.1 141.5 100 55
Frankfurt/Main 651,899 107.1 117.9
Zeil 225 170
Goethestrasse 150 75
Grosse Bockenheimer Strasse 125 70
Biebergasse 190 110
Steinweg 110 60
Fulda 63,958 99.6 229.6 48 32
Giessen 73,690 96.8 203.5 90 55
Hanau 88,746 101.9 137.8 62 39
Kassel 194,427 96.6 153.8 100 62
Marburg 79,139 95.1 119.4 38 24
Offenbach 119,430 100.4 101.8 48 26
Wetzlar 52,473 98.2 166.1 21 11
Wiesbaden 274,611 109.1 121.8 130 75
89

MECKLENBURG WESTERN-POMERANIA
The plain figures continue to be sobering. Mecklenburg-Western Pomerania has the lowest
population density of all the federal states and has also lost approximately 120,000
inhabitants since 1995. Now only about 1.7 million people live in Mecklenburg-Western
Pomerania, less than in the Hanseatic city of Hamburg alone. Combined with a high
unemployment rate, this population shrinkage creates a retail trade framework providing
little grounds for optimism. Amongst the state’s seven cities with a population in excess of
30,000, the inner cities of Rostock, Stralsund and Greifswald feature attractive pedestrian
areas and hence grown trade locations with an attractive
segment mixture. As traffic volume generators, the
textile department stores, P&C, H&M and C&A, as well
Average shop rents in prime locations
in Mecklenburg-Western Pomerania for shop
as Karstadt in Wismar and Kaufhof in Rostock, fulfil a
locations with retail sales area of
80–120 square meters in comparison to the
average development of shop rents in Germany
magnet function that ensures an adequate volume of
60
pedestrian traffic. In Schwerin and Neubrandenburg,
50
ECE shopping centres dominate the inner city retail
40
business, which means that the adjoining pedestrian
zones continue to be doomed to a shadowy existence.
30
Whereas in the coastal regions and tourist areas around
20
the Mecklenburg lakes, the retail trade benefits from a
10
continuing growth in the number of visitors. Baltic
0
2002 2003 2004 2005 2006 2007
seaside resorts such as Binz and Boltenhagen, but also
average durchschnittliche development Entwicklung of der
Waren (Müritz region), are locations experiencing a ever-
shop Ladenmieten rents throughout in Deutschland Germany
average durchschnittliche development Entwicklung of shop derrents
increasing chain store demand for retail spaces.
in Ladenmieten Mecklenburg-Western in Meckl.-Vorpommern Pomerania
The development of the Hanseatic town of Wismar is growing in strength, whereas
Güstrow still suffers from the fact that no department store operation could be established
in the pedestrian zone. In the wake of the opening of the C&A small family establishment,
Wismar is experiencing a further enhancement of the prime location behind of the town
hall, which will be provided with further impulses by the opening of a Hennes & Mauritz
branch expected for the first half of 2008. Both of these leases have been negotiated by
COMFORT Hamburg GmbH. With 20 euros/m2 (Wismar) and 18 euros/m2 (Güstrow), the rents
paid for smaller shop premises with retail floor spaces of 80 to 120m2 are still very moderate.
The retail business in the Hanseatic town of Rostock is concentrated in the city streets
Kröpeliner and Breite Strasse. But the prime location is split into two separate sections. The
area between Neuer Markt and Universitätsplatz has been left behind in comparison, while
the section up to the Kröpeliner Tor presents a very dynamic situation. The pedestrian traffic
volume is showing continuous growth in this section. The central section of Kröpeliner Strasse
features two highly attractive customer magnets in the shape of Galeria Kaufhof and the
Rostocker Hof shopping centre. The same also applies to the section up to the Kröpeliner
Tor, where Peek & Cloppenburg and C&A have been able to establish and hence ensure
their locations in time. Hennes & Mauritz will also open a branch in the Jacobi-Passage in
90

the near future so that all the department store operations will be concentrated in this
area. The attractiveness of this section of the pedestrian area will be further strengthened
by the shopping centre, Kröpeliner Tor Centre, currently undergoing development, which
will feature approximately 19,000m2 and 45 shop units and therefore probably the most
suitable dimensions for this location. In addition, this centre located next to the Peek &
Cloppenburg plot can be described as well-integrated.
The opening is scheduled for this Autumn. Saturn, Zara
and Plus have been secured as large tenants. The hidden
potential of Rostock is demonstrated by a TLG Rostock
let in what was up to now the weakest section of the
pedestrian area near the Neuer Markt. Approximately
500m2 of rented space could be let to a young fashion
outlet here. It is perfectly plausible that further potential
could be created in the wake of the developments just
mentioned. A fact which is also illustrated by the rents
in Rostock. At 85 euros/m2 Average shop rents in prime locations
in Rostock for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
90
80
70
60
50
40
30
20
, the Hanseatic town takes top
10
position in Mecklenburg-Western Pomerania by a wide
0
2002 2003 2004 2005 2006 2007
margin. During the last five years alone, the rental rates
durchschnittliche average development Entwicklung of der
for shop premises have increased by around 70 per cent
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Rostock of
in Rostock.
shop rents in Rostock
While the depopulation experienced by large sections of the pedestrian areas in
Neubrandenburg and Schwerin appears to be irreversible, the development in the locations
of Stralsund and Greifswald is positive. Stralsund, in particular, will continue to increase
in attractiveness through the planned reinvigoration of the main retail centre represented
by the development of Rathausplatz square. For this location, a Berlin developer is
planning to build a residential and commercial quarter featuring approximately 10,000m2 of retail space. Edeka and Kloppenburg are apparently earmarked as anchor operations
for this project. The rental rates in Stralsund have meanwhile reached 30 euros/m2 and
hence even exceed the levels achieved prior to the year 2000 by a wide margin.
As recently as 1999, the same spaces still only cost 20 euros/m2 according to
COMFORT surveys.
Although the purchasing power index figure for
Greifswald is below average at 84.7, the city is blessed by
a positive development thanks to its high centrality ranking
of 108.2. The economic framework data and population
growth of many eastern German regions bucking the
general trend promise good development perspectives for
this location, too. Rental rates are currently at 25 euros/m2 .
The location Neubrandenburg has the highest centrality
rating in the state, a fact which is reflected in the currently
strong demand for retail spaces, which can, however, only
be met in a few exceptional cases. It is hence quite possible
Jürgen Jakobs,
Letting
91

that the ECE expansion project for the shopping centre, Markt-Centre, will be approved by
the municipal authorities after all in the medium term, as the prime location provides hardly
any other development potential. Rental rates are currently at 25 euros/m2 .
92
Maximum rents in Mecklenburg Western-Pomerania in 2007
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Rostock 199,288 90.0 105.6 85 42
Schwerin 96,656 92.5 123.5 35 22
Stralsund 58,708 88.7 93.7 30 18

LOWER SAXONY
A survey conducted by Lower Saxony’s chamber of
industry and commerce amongst its own members
seconds the general optimism and could potentially
indicate a record-breaking development. The investment
and employment dynamics have picked up speed even
more impressively than was the case during the last high
in 2000 and have by now almost reached reunification
boom levels. Although retailers generally had a weak
start at the beginning of 2007 in the wake of the VATincrease,
the businesses mainly affected were the car and
furniture dealers and less so the shoe and clothing
retailers. The latter sectors reported good figures and
assume that the trend will continue. (Source: Hanover
chamber of industry and commerce)
Braunschweig
Average shop rents in prime locations
in Lower Saxony for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
With, approximately 245,000 residents, Braunschweig is Lower Saxony’s second largest city
after Hanover and therewith undisputedly ranks amongst the key metropolitan locations
of this federal state. But there are other reasons why Braunschweig’s positioning on chain
store expansion lists outstrips the nationwide average. A comparison with cities featuring
similar populations shows that Braunschweig exhibits an above average performance in
terms of centrality (153.6) and purchasing power (106.1), with the local retail trade benefiting
accordingly.
However, Braunschweig’s retailers have nonetheless suffered a long period of disturbance.
At the end of March 2007, the ECE opened the Schloss-Arkaden, which had been the subject
of some controversy, in the rebuilt Braunschweig castle. On the one hand, the development
is an absolute enhancement in town planning terms, as it fills an urban gap which had so
far been utilized in a very unattractive manner and helps upgrade the entire neighbourhood
with the redesign of the Bohlweg. On the other hand, however, is the question as to what
the impact of 150 new shops on Braunschweig’s retail situation will be, especially given the
fact that they are located in a shopping centre which is largely cordoned off from the outside,
not integrated in the city’s retail landscape and furthermore not only provides its clients
with 1,700 parking spaces, but also tries to tie them to the centre with special benefits in
the form of parking discounts or shopping cards. Whether this will be met with success will
depend to a substantial degree on the segment mix provided by the centre.
The only real newcomers to be introduced to Braunschweig as anchor tenants in the centre
are the men’s clothing store, Pohland, and the shoe retailer, Humanic, while the other large
tenants ,Hennes & Mauritz, New Yorker, C&A and Thalia, were already represented only a
90
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Lower Niedersachsen Saxony
93

few meters away in the attractive city centre. This raises the question as to the extent to
which this centre can be seriously described as an enhancement of the retail location
Braunschweig. Really interesting new outlets which would enhance Braunschweig as a retail
location are generally few and far between. With the existing set of tenants, the centre
can hardly be viewed as an enriching addition to the inner city, but instead merely as an
unnecessary repetition. The result being some anxiety that the prophecies of doom voiced
by the project’s opponents, who had forecast a mere redistribution of retail turnovers instead
of the growth promised by the developer, ECE, might still come true.
A trend of this nature can hence also be observed in the townscape. Particularly in the
locations further removed from the Schloss-Arkaden centre, such as Sack and Schuhstrasse,
some vacancies are visible. As a result, a drop in rental rates is also to be expected in these
locations. However, this situation is not only attributable to the new competitive situation
provided by the Schloss-Arkaden centre. The opening of the centre instead merely helped
to highlight the glaring deficiencies of the “magnets” in these areas, which are themselves
to blame, owing to the redevelopment backlog. Neither the visibly time-worn Burgpassage,
nor the difficult City Point concept or the extremely old-fashioned Karstadt promise an
attractive shopping experience by their very visual appearance. If competitiveness is to be
maintained, the need for action is pressing. At least one of the no longer up-to-date
operations has retreated in the shape of the former “Kimmich” department store; a future
attractive utilization of this large space, probably through the purchaser, New Yorker, is of
key importance for this part of the inner city. One can hardly avoid the conclusion that the
long term redevelopment backlog of these large spaces and a general investment restraint
have created a situation where the centre developer, ECE, met with an enthusiastic reception
amongst many retailers who had long been looking for retail spaces matching modern
standards in Braunschweig. It only remains to be hoped for this part of Braunschweig’s inner
city that the property owners and retailers will recognize the signs of the times and attempt
to remedy past negligence through investments.
In contrast to the Sack and Schuhstrasse, the Damm and
Hutfiltern locations, which are closer to the Schloss-
Arkaden, present themselves as beneficiaries of the new
centre. The upgrading of the Damm quarter initiated by
COMFORT Hamburg and the Düsseldorf developer
CENTRUM, in the wake of the project developments at
numbers 16-17 Damm with the tenants Hennes &
Mauritz, Zara, Mexx, Vero Moda and Jack & Jones is
being continued further.
The Karstadt Sporthaus at 5-8 Damm has been sold to
a Dutch investment company and a new concept is
probably to be expected here in the very near future.
Another new development is taking place at number
22 Damm for a mobile communications provider. In
addition, the striking corner building at Damm/Bohlweg
94
Average shop rents in prime locations
in Braunschweig for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
120
110
100
90
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Braunschweig of
shop rents in Braunschweig

has finally been reopened after many
years. This is where New Yorker has
accommodated the flagship store of its
new attractive “Ann Christine” concept.
The industry expected that this would
have a signal function for the Bohlweg
as a future shopping boulevard. At the
moment this trend has yet to materialise,
however. The next project to follow at
the Bohlweg is the new building for the
Volksbank Braunschweig-Wolfsburg.
Braunschweig, Bohlweg 1-3
However, it is a generally known fact
“The new ‘Ann Christine’ concept from New Yorker”
that banks do not exactly serve as
magnets for further interesting retail concepts in the neighbourhood. The remaining
tenants of the Bohlweg remain as unpromising as ever. Instead the large number of
snack bars will have a rather deterrent effect on potential investors. It is to be expected
that the upgrading of the Bohlweg will take a rather longer time than initially
hoped for.
The overall picture unavoidably creates the impression that the opening of the Schloss-
Arkaden centre has revealed the deficiencies of the inner city in the Sack and Schuhstrasse
area in the short term and that this difference in location quality has also found reflection
in the rental rates. Whereas the top rents achieved in the front part of the Damm near the
Schloss-Arkaden range up to 110 euros/m2 , the rates in the Sack/Schuhstrasse area have
dropped by approximately 20%. As soon as the property owners and retail space operators
start to reverse the trend by enhancing the attractiveness of this area, however,
Braunschweig’s beautiful inner city with its many historic squares providing added visit quality
is bound to stand a good long term chance of asserting itself against the Schloss-Arkaden
centre with its rather uninspiring mix of tenants.
Hannover
Lower Saxony’s state capital, Hanover, ranks amongst
Germany’s strongest retail locations by a wide margin,
even if this may come as a surprise to many because of
the 1970s “concrete environment”. However, the success
of this location is, amongst other factors, impressively
documented by the pedestrian volume ranking which
places the Bahnhofstrasse second after Munich’s
Kaufinger Strasse in a nationwide comparison.
The pedestrian volume figures for the Georgstrasse are
also impressive. Together with the Grosse Packhofstrasse,
these two shopping streets form Hanover’s top
prime location.
Average shop rents in prime locations
in Hanover for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
180
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Hannover of
shop rents in Hanover
95

The great success of the
Bahnhofstrasse is attributable
to a variety of
Hanover in comparison to other German shopping metropoles
of similar size
TOP CITY Inhabitants PP CP
factors. In contrast to
Dresden
Duisburg
495.181
501.564
93,6
94,0
113,7
96,2
100
75
many other “concrete
Nuremberg
499.237 103,6 138,6
130
sins”, the Ernst-August-
Leipzig
Hanover
502.651
515.729
89,6
103,0
110,3
135,6
105
165
Platz square with the
Bremen
Düsseldorf
546.852
574.514
98,0
111,9
125,0
130,8
115
210
main station at the end
Essen
585.430 101,5 118,4
110
Dortmund
588.168 97,4 110,7
200
of the Bahnhofstrasse
serves as a very attractive
Stuttgart
592.569 108,0 130,1
220
introduction in urban planning terms. In addition, several projects have been developed
in the Bahnhofstrasse with great success in recent years such as, for example, the outstanding
New Yorker flagship store or the new Olymp & Hades outlet. Kaufhof Galeria is currently
undergoing a lavish modernisation. A further enhancement is the successful revitalisation
of the former passage to the Niki-de-Saint-Phalle-Promenade which is accepted very well
by the public.
Besides maintaining its own strength, the Bahnhofstrasse has, in the very recent past, also
been able to turn the upgrading of the neighbourhood into successes. The improvement
of the quarter around the main station will reach its climax with the opening of the Ernst-
August-Galerie, featuring around 30,000m2 of rental space and approx. 140 shops in August
2008. This will serve as a conclusive manifestation of the retail focus around the main station.
Occasioned by this development, the Düsseldorf project developer, CENTRUM, has recently
acquired the property at 8 Bahnhofstrasse in direct sight of the Ernst-August-Galerie. The
new design of the commercial building is being developed jointly with COMFORT Hamburg.
However, it is not only the Bahnhofstrasse in Hanover that has further hidden development
potential. That this potential has not yet been exhausted by any means is demonstrated
by a comparison between Hanover’s retail index figures and those of other cities in the
Federal Republic featuring populations in excess of 500,000. With a value of 135,6, Hanover
achieves a higher centrality ranking than even Düsseldorf and Stuttgart, for example. The
top prime location to date, short in any case for a city of this size with Bahnhofstrasse,
Georgstrasse and Grosse Packhofstrasse, hence offers a corresponding potential for
development. Even the spatial expansion resulting from the opening of the Ernst-August-
Galerie in August 2008 will hardly affect this potential. This is where one will be bound to
find a number of interesting retail concepts whose search had been frustrated for many
years owing to the shortage of space and who will now augment the broad range available
in the inner city. The opening of the Ernst-August-Galerie is also unlikely to dampen the
demand from retailers in the long term. Given the size of the city, it is instead rather to be
expected that maintaining several locations in Hanover will be considered a viable option
by some of the retail chains.
There is great potential for development in the areas of Grosse Packhofstrasse
or Karmarschstrasse, which have already been able to provide good figures for
pedestrian traffic and sales volume in recent years. While investment by real
96

estate owners in this area has to date
lagged behind the area’s success, a
considerable change is now expected:
CENTRUM Grundstücksgesellschaft
Düsseldorf recently acquired the
traditional Heutelbeck department store.
A newly designed commercial and office
building with retail sales area of 3,800m2 is planned for this property; COMFORT
Hamburg was able to acquire the
company s. Oliver, with a sales area of
approximately 1500m2 , as the first
tenant. With this development, the
neighbourhood will receive a new
attraction that will have extremely
positive effects on its surroundings due
to its dominance.
Hanover, Project study Heutelbeck-Kaufhaus,
Grosse Packhof- und Karmarschstrasse
CENTRUM: Project developer/owner
COMFORT: Investment, Consulting, Letting
Industry insiders continue to assume that the Salamander property will be redeveloped; in
addition, Grosse Packhofstrasse will be equipped with a glass canopy between Georgstrasse
and Osterstrasse. Plans to modernize the Kröpcke Centre have existed for a long time, but
the centre has been sold in the meantime and nothing is yet known about the new owner’s
intentions.
The immediate neighbourhood of the opera house is to be brightened up with new
pavements and municipal installations. At the same time, project developers are increasingly
turning their attention to some previously little-noted streets. These include Euroland
which is planning a partial new development on the former Telekom site between
Schillerstrasse and Kurt-Schumacher-Strasse with an innovative and attractive concept,
which will accommodate hotel and office uses in addition to large-scale retail projects. That
retailers and project developers will increasingly turn their attention to locations such as
Schillerstrasse or Kurt-Schumacher-Strasse is attributable to the increase in pedestrian traffic
volume in the wake of the opening of the Ernst-August-Galerie in August 2008, one of
whose two main entrances in Kurt-Schumacher-Strasse is located directly opposite the
Euroland project development. The fact that they provide links to the top prime location,
Georgstrasse, will benefit these areas, which will hence play a larger part in the Hanover
retail scene than has previously been the case.
Irrespective of the fact that the opening of the Ernst-August-Galerie is not only viewed in
a positive light by some of the resident retailers, it is expected that this shopping centre
will enhance the inner city as a business location in the long term. The strength of Hanover’s
town centre has always also rested on the fact that the retail range relevant for the inner
city had not been well represented in the suburbs. Now these areas are also being built up
in order to slow the drain of purchasing power towards Hanover’s inner city. The City-Centre
in Langenhagen, for example, is being expanded from 12,000m2 to 27,000m2 . Garbsen is
97

even the setting of two competing development plans. One aims for an expansion of the
Planetencentre and in the other, the developer, Sonae Sierra, is planning a shopping and
recreation centre near Garbsen town hall. Given these perspectives, the fact that the Ernst-
August-Galerie will provide the inner city with a further magnet, hence boosting the
centrality of the location even further, needs to be viewed as a positive development.
Hildesheim
The retail landscape in Hildesheim has been undergoing a drastic transformation in the
very recent past. Initially, Hohe Weg had been reserved for higher-quality and larger
concepts, while the rather small-scaled, branch-oriented retail operations thronged around
the magnet Kaufhof in Almsstrasse. This was also reflected in the rents which could be
achieved. The rates paid for properties in Almsstrasse, the better frequented location, used
to be correspondingly high. However, in the meantime, Hohe Weg has been able to catch
up. Due to the small-parcelled nature of the spaces in Almsstrasse, any demand for larger
spatial concepts could previously only be met in Hohe Weg, a fact which has finally spurred
project developers into action.
Numerous new or re-developments are currently to be seen and new retail establishments
enliven the urban scenery. The first of these was the project development at 6 Hohe Weg
initiated by COMFORT Hamburg and realised by the project developer, CENTRUM. The Danish
company, Bestseller, functions here as a popular young fashion address with its product
lines, Vero Moda and Jack & Jones. Following the successful sale of the property at 30-31
Hohe Weg, another Scandinavian company will move into the area in the shape of Hennes
& Mauritz. s. Oliver has opened a store at number 10 Hohe Weg and at number 36, the
Dutch fashion house, The Sting, will operate one of its first outlets in Germany following
the building’s redevelopment by the Düsseldorf project developer, CENTRUM. Deichmann
has acquired its existing space at Hohe Weg 12 and taken this as an opportunity to modernise
and expand. Following the sale of the real estate to an investment trust at number 11 Hohe
Weg, a Rossmann branch has opened here, whose former space at Hohe Weg 9/10 will be
used in future by Koffer Koch. That company’s former space at 35 Hohe Weg has in turn
also been sold and re-let by now.
The trend towards shopping centres is also not passing by Hildesheim. There are even two
competing projects. The first concerns a centre integrated in the inner city via a connection
to the Almsstrasse which is expected to provide spaces in excess of ca. 25,000m2 . The second
centre, providing ca. 14,000m2 of rental space, is being built at the train station and has
the disadvantage of not being integrated in the existing prime location, only being linked
to a B-class location instead. Strengthening the inner city of Hildesheim with a centre might
be viewed positively as a matter of principle, as the centrality ranking has seen a steady
drop in recent years, in addition to the difficulties created for Hildesheim retailers by the
dominance of the very near Hanover. Interesting retail concepts would therefore certainly
help the inner city to stem the drain of purchasing power. In addition, such a project would
once again provide a more balanced proportional relationship to the retail spaces in the
98

suburbs and “greenfield sites”. The
reason being that although Hildesheim
provides a greater sales area per resident
with 2.2m2 in comparison to the national
average of 1.4m2 , only about 30 % of
this space is located in the town centre.
Strengthening the inner city by a centre
integrated in the existing prime location
is to be welcomed in this respect. The
non-integrated train station arcades do
not appear that promising for the very
same reasons.
Lüneburg
Hildesheim, Project study Hoher Weg 36, The Sting
CENTRUM: Project developer
The charming ambiance of Lüneburg’s historical buildings continues to draw enthusiastic
visitors. The sheer quality of time spent not only in the prime locations of Kleine and Grosse
Bäckerstrasse, but also in the side streets, makes a shopping spree or rest in one of the street
cafes an inviting proposition. This has very beneficial consequences for the retail trade. Chain
store demand for suitable spaces can hence not be covered in Lüneburg. This is, however,
not only attributable to the low tenant fluctuation in the prime location, but also for the
most parts to the largely small-scale old buildings provided, which do not measure up to
the permanently expanding space concepts of the retail chains.
The demand pressure can hence only be addressed by expanding the prime location. An
obvious option would be an expansion in the direction of Grapengiesserstrasse. The
establishment of Görtz and Strauss Innovation branches has already started this process.
The trend was continued at the
beginning of this year with the openings
of Deichmann and Kloppenburg in the
former Kerber department store, both
very welcome following many years
during which this prominent location
stood vacant. This only leaves the
question as to whether the Grapengiesserstrasse
will be able to establish
itself as a prime location in the longer
term. That would be desirable for
Lüneburg, as retailer demand could Lüneburg, Grapengiesserstrasse 18–21,
otherwise well be satisfied by the “Kerber becomes Deichmann and Kloppenburg“
construction of a shopping centre, as is
happening in other cities. Precisely this subject has been under discussion repeatedly in
Lüneburg in the past. But what could by all means strengthen other inner cities would
probably not be very helpful in Lüneburg. The potential of the town as a retail location
99

should not be overestimated. A location with just short of 72,000 residents would only
provide capacities for a smallish centre, which would, in turn, not be of interest to most
project developers. In addition, only an integrated shopping centre could be viewed as a
true enhancement. However, finding a location that is linked to the prime location of Grosse
and Kleine Bäckerstrasse is likely to present difficulties. The conclusion being that Lüneburg
should direct its efforts at consolidating the retail trade in the prime location and promoting
the Grapengiesserstrasse on its positive path into this role.
The historical, long front of the chamber of industry and commerce on view to potential
shoppers turning into Grapengiesserstrasse from Kleine Bäckerstrasse does not exactly
serve as an inspiration in this respect. However, the Grapengiesserstrasse nonetheless
remains the best option for expanding the prime location and establishing a circuitous route
back in the direction of the Grosse Bäckerstrasse. It is to be expected that Deichmann and
Kloppenburg will have a trend-setting effect and attract other interesting chains.
Oldenburg
With approximately 158,000 residents, the university town of Oldenburg is the economic
and cultural centre of the Weser-Ems region. The indicative retail index figures of 100.7 for
purchasing power and 144.2 for centrality rank above the nationwide average and most
of all demonstrate Oldenburg's charisma as a top retail centre for the Weser-Ems region.
The architecturally and visually attractive buildings contribute to the inner city’s high
environmental and visit quality. However, the centrality ranking has been stagnant in
recent years as the surrounding towns
have caught up and too many retail
agglomerations were established in
peripheral locations. Many owners have,
in addition, failed to invest adequately in
their real estate, therefore also failing to
counteract the slow drain of purchasing
power from the inner city.
Oldenburg’s prime location stretches
across the Lange Strasse and Achternstrasse,
both of which are linked south of
the market square, and ends at the
Heiliggeistwall. It thus presents a closed
circuit through Oldenburg’s town centre.
The chain outlet quota of the Lange
Strasse currently ranges at around 65 %
and that of the Achternstrasse around
70 %. The streets linking the Achternstrasse
with the Lange Strasse are rarely
used by passersby, the result being that
100
Oldenburg, Project study Achternstrasse 1-2,
The Sting
CENTRUM: Project developer

virtually the only businesses to have settled there are local retail operations serving
a target public.
Oldenburg’s B-class locations are characterised by local retailers and a varied range of
catering establishments. A large and varied catering range is also available around
Waffenplatz square, as well as in the Walstrasse, Mottenstrasse and Kurwickstrasse, all of
which combine to enhance the quality of time spent in Oldenburg’s inner city, especially
in the summer. The strongest B-class location in Oldenburg is the Haarenstrasse, which is
dominated by the local men’s outfitters, Bruns-Männermoden. Oldenburg's traditional
department store, C. W. Meyer, is currently in the process of being re-let and one can not
yet say whether a new set of tenants will maintain or perhaps even enhance the attractiveness
of Haarenstrasse. Heiligengeiststrasse fails to register significant pedestrian volumes, in spite
of Mediamarkt being represented in the Oldenburg City-Centre.
In 2005 and 2006 the demand for retail spaces in Achternstrasse and Lange Strasse was
influenced by the ECE announcing plans to build an inner city shopping centre in Oldenburg’s
town centre in the Schlossplatz square area, which will feature a link-up to the Galeria
Kaufhof department store. The only operations to settle in the Achernstrasse recently were
therefore the shoe chain, Kay, and the credit specialist, Fortis. The CENTRUM
Grundstücksgesellschaft mbH has bought the Woolworth property at 1-2 Achternstrasse in
order to build a new, representative property at this location. The Dutch fashion chain, The
Sting, will move in as a tenant, significantly improving the attractiveness in this segment
in the process. Two new operations to settle in Lange Strasse are the bookshop, Jokers, and
the home furnishing store, Cult at Home.
The ECE has only been able to realise its project because the new branch of Ikea on the
periphery was approved as a countermove. The announcement of the new branch made
retailers wait with their location decisions to see how the new shopping centre would
develop. Approximately 2,000–3,000m2 of the ECE centre’s total floor space of 12,500m2 will probably be allocated to a food retailer so that the inner city will have to cope with a
further 10,000m2 of additional retail space. This figure
is likely to be further reduced by another large tenant,
which would have otherwise been impossible in the
Average shop rents in prime locations
in Oldenburg for shop locations
inner city owing to the architectural conditions. The
with retail sales area of 80–120 square meters
in comparison to the average development
extent to which the shopping centre is directly linked to
90
of shop rents in Germany
the pedestrian zone remains a decisive factor for
80
Oldenburg’s inner city.
70
Now that the ECE can realise its shopping centre, the
demand pressure for the inner city of Oldenburg is on
the rise again. In view of the increased demand for
spaces in the upper part of the Lange Strasse and in the
Achternstrasse, one may expect that these will continue
as the most attractive locations for chain operations
even after the ECE settlement. COMFORT Hamburg has
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Oldenburg of
shop rents in Oldenburg
101

currently more than 55 requests from cross-regional retailers looking for spaces in
Oldenburg's prime location.
It remains to be seen what the effect will be on the pedestrian traffic. It is relatively certain
that the front sections of Achternstrasse and Lange Strasse, as well as the market square,
which is only used for catering at the moment, will benefit. These areas had experienced
a drop in retailer demand in the past.
On average, the top rents for smaller spaces have risen by more than 30 % to 85 euros/m 2
in the last seven years, the rents payable for larger spaces have meanwhile reached 45
euros/m2 . Whereas rents stagnated in the years 2005 and 2006 owing to uncertainties as to
whether and in what shape the ECE would materialise, they have experienced a very strong
increase again in 2007.
Cuxhaven
The prime location of Cuxhaven is the Nordersteinstrasse. It starts at the Kämmerer Strasse
and ends at Süderstrasse. Retail chains mainly prefer the section between Holstenstrasse
and Segelckestrasse for two reasons. One of them being that both streets provide direct
links to the multi-storey car park and the retail agglomeration in Johannes-Gutenbergstrasse.
This is where Schintzel KG could successfully attract C&A, Deichmann, Jeans Fritz and other
retailers who either gave up their location in Nordersteinstrasse or had not been previously
represented in Cuxhaven.
And the other reason being that the beginning and end of Nordersteinstrasse lack attractive
retail spaces featuring interesting retailers. This could be about to change in the section
between Kämmerer Strasse and Holstenstrasse if Hertie's reorganisation succeeds in
modernising the real estate and creating an attractive customer proposition once again.
Owing to the topography, architecture and protection of listed buildings, Cuxhaven often
fails to provide suitable spaces. Certain retail formats are simply not available. This creates
a risk of retailers settling in the periphery. However, if it were possible to provide suitable
retail spaces, the rents could rise again and Cuxhaven would continue to enjoy a beautiful
pedestrian area which provides a very pleasant place to visit in the summer.
Osnabrück
The shopping scene in Lower Saxony’s metropolis, Osnabrück, is currently almost exclusively
concentrated on the prime location of Grosse Strasse. A successfully conceived circuit
through the open shopping centre, “Kamp-Promenade”, with the anchor tenants, SATURN
and Karstadt Sport, connects the Grosse Strasse with the coach station at Neumarkt and
the university library and then turns back again to the pedestrian zone, Grosse Strasse. In
contrast to this, retail locations, such as the Johannisstrasse and Krahstrasse, have, up to
102

now, been unable to benefit from the rising demand for suitable retail properties and
continue to exhibit a significantly lower chain quota. Whereas the Grosse Strasse has, in
recent years, been greatly improved through private as well as public investment. The
redevelopment (renovation) of the entire shopping street has heightened the attractiveness
of this retail location and led to a growing demand for spaces in this part of the inner city.
This demand is now being addresses by various development measures. These include, for
instance, Lengermann + Trieschmann, a company with a long tradition, located at Grosse
Strasse is planning to expand its clothing department store. Besides the new construction
of the Central-Passage, where C&A will finally manage to establish an outlet in the top prime
location as the main tenant on approximately 4,500m2 , the long overdue redevelopment of
the former Kaufhalle site ensures a further upgrading in the upper part of this main shopping
street. This redevelopment is where the shoe chain, Reno, has taken one of the rare leases
that do become available and will be represented in this location as from Autumn 2007. As
even the above construction projects are unable to cover the present demand surplus, some
retailers have revised their thinking. The Nikolaiort, today still largely characterised by
catering operations, is increasingly becoming a focus of retailer interest, which makes a future
expansion of the prime location in the shape of an extension of the Grosse Strasse around
the P&C likely. However, the redevelopment of the Neumarkt, which has been under
discussion for years, would deflect from this development – if it were ever to happen.
Göttingen
The town of Göttingen is becoming more and more interesting for many national and
international chains. The clothing chain, New Yorker, will realise its second location here
following the conversion of the former town savings bank at 65-69 Weender Strasse. The
project is expected to be completed within the year 2007. That the former location, which
is only situated a few meters away in the direction of the Kornmarkt, is being maintained
serves to indicate the attractiveness of Göttingen as a shopping destination. Besides the
lower section of the Weenderstrasse and the Kornmarkt, retailer interest is also focussing
on the first part of the Gronerstrasse up to Padektengasse/Düstere Strasse. One example
being the shoe shop Klauser, which settled here last year
in a rented space of approximately 600m2 .
Even one or two years ago, this part of Göttingen’s once
most important shopping street was still the subject of
significantly more ambitious plans entailing a variety of
retail concepts. That the attractiveness of the lower
Gronerstrasse will decrease in the medium term without
outside intervention is to be expected. In view of the
fundamental surplus demand for suitable retail spaces,
further national and international chains are likely
to settle in the Weenderstrasse between the newly
established New Yorker and the Kornmarkt.
Tina Maren Below,
Letting
103

Wolfsburg
Just short of seventy years old, Wolfsburg ranks amongst the younger German cities and
the economic conditions it is able to offer retailers are anything but bad. The approximately
121,000 residents achieve a purchasing power ranking of 111.6 and the renewed
improvement of the centrality rating at 120.0 also indicates that the surrounding areas rely
on the shopping opportunities Wolfsburg has to offer just as much. On the other hand,
however, the youthfulness of the town also respresents one of its greatest weaknesses in
terms of retailing, namely in the shape of the architecture of the commercial buildings in
the town centre and the urban design layout of the prime location of Porschestrasse, which
was originally planned as a motorway and hence unfortunately features a corresponding
length and width concept. The middle section of Porschestrasse has nonetheless been able
to develop into the city’s prime location. The only setback being that the weaknesses
caused by the initial conception do not lend it a very inviting appearance. The street's very
length and width make visitors feel lost and disoriented. This deficiency was to be remedied
in the 1970s by the construction of several pavilions, which in the end, alas, only served to
heighten the problem, as the disorientating aspect was further enhanced by the confusion
created by the pavilions. The quality of the existing tenants, who are largely to be classed
in the discount sector and do not include any attractive magnets, corresponds to this visual
appearance. In addition, the pavilions have created some dark and not very clean corners.
The municipal authorities have recognized this weakness and are making every effort to
upgrade their prime location as part of a long term masterplan, but continue to come up
against obstructions where their attempts at influencing the owners of the real estate are
Wolfsburg, Building lot Porschestrasse
104

concerned. The visit quality is still to be improved by a new road paving and a continuation
of the Platanenallee beyond the southern part or by glass roofs with attractive lighting
effects. However, the greatest weakness, i.e. the unaesthetic architecture and the pavilions,
cannot be eliminated that quickly. Although a start has been made as one of the most
dominant pavilions will fall victim to the conversion measures, this is not enough to initiate
a marked turnaround of the trend.
There is another problem besetting Wolfsburg’s prime location. The inner city serves as a
schoolbook example of the negative consequences of a shopping centre featuring a selfcontained
segment mix which might be located centrally, but is only moderately integrated.
The so-called City-Galerie dominates Wolfsburg's shopping scene so unequivocally that even
the initial prime location, Porschestrasse, hardly stands a chance against its supremacy.
Retailer demand is hence also preferably directed at spaces in the centre, which frequently
leaves the owners of the retail spaces in Porschestrasse with little choice but letting to 1euro-shops
if they wish to avoid even less attractive signs of dereliction. The investment
market for retail real estate behaves correspondingly. Except for the sale of the property
used by the WKS department store, the market is relatively settled, in stark contrast to nearby
cities such as Hildesheim, for example, where something almost resembling a boom has
been created in the more recent past by eager-to-buy project developers.
Joining this scene now is the first Designer Outlet Center, (DOC), on the former site of the
municipal services, which will compete with the City-Galerie and prime location when it
opens in the Autumn of this year with a first construction stage on ca. 12,000m2 with 50
shops. In addition, the demolition of the former Hertie building at Nordkopf has started,
which will be replaced by a job centre with a local retailer in the basement. Rumour has it
that this part of the Porschestrasse is, alas, making preparations for the loss of its most
important anchor tenant, Saturn, which has taken out a lease in the City-Galerie.
Remarkable in Wolfsburg is the dynamic with which the city is generally developing and
trying to create attractive locations for its residents and visitors. Which nonetheless leaves
the question if the committed efforts of the Wolfsburg
municipality to become an event town with numerous
visitor attractions will have a positive impact on the
Average shop rents in prime locations
in Wolfsburg for shop locations
retail business and hence also on the rental rates or real
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
estate prices on Porschestrasse. The hoped-for synergies
with the car city (Autostadt) have only insufficiently
50
materialised so far in any case. According to a survey of
40
passerby carried out by the Wolfsburg Marketing GmbH
30
in October 2006, only 9 % of visitors to the car city
combine their stay in Wolfsburg with a shopping spree
20
in the Porschestrasse. This is not really that surprising,
10
given the existence of an attendant problem which is
0
2002 2003 2004 2005 2006 2007
not that easy to solve and persists in spite of all efforts.
durchschnittliche average development Entwicklung of der
Namely the long walking distance between the key retail
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Wolfsburg of
locations in the middle section of Porschestrasse and
shop rents in Wolfsburg
105

the tourist attractions towards Nordkopf. The DOC will now be an added aggravation. It
is to be expected that any visitors who are willing to shop will now be intercepted by the
DOC before they can turn their attention to more traditional shopping locations. A lively
exchange between these retail locations is rather unlikely. A DOC in the inner city
furthermore creates worries about potential disadvantages for the existing retail situation,
as it can not be perceived as a conflict-free augmentation of the inner city retail landscape
in view of its product range. For retailers located in the centre section of Porschestrasse,
the establishment of the DOC will have a correspondingly critical impact.
In the public eye, Wolfsburg is mainly associated with the
car city, “Autostadt”, the Phaeno or, in the near future, with
the outlet centre as a popular destination. Owing to its
deficiencies in terms of environmental and visit quality,
the traditional prime location of Porschestrasse will certainly
cease to be viewed as a similarly rewarding destination in
the long term. Especially given the fact that Braunschweig
represents a cross-regional alternative also featuring,
besides the newly opened Schloss-Arkaden, a beautiful,
historic old town inviting visitors to spend time in one of
the cafes.
106
Maximum rents in Lower Saxony in 2007
Sinje-Swala Buschmann,
Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Braunschweig 245,273 103.4 153.6 110 60
Celle 71,336 101.9 136.9 55 30
Cuxhaven 52,095 98.8 112.5 38 22
Delmenhorst 75,916 97.9 120.8 30 16
Emden 51,693 95.2 124.9 30 16
Göttingen 121,884 98.0 142.1 60 30
Hameln 58,739 101.5 145.8 45 25
Hanover 515,729 103.0 135.6
Georgstrasse 165 100
Bahnhofstrasse 165 100
Karmarschstrasse 150 90
Grosse Packhofstrasse 150 90
Hildesheim 102,575 102.2 118.7 70 35
Lingen 51,317 99.7 138.9 30 16
Lüneburg 71,842 102.4 129.2 75 48
Nordhorn 53,085 94.6 120.3 28 16
Oldenburg 158,565 100.7 144.2 85 45
Osnabrück 163,814 97.4 145.3 77 45
Salzgitter 107,726 96.7 95.9 30 16
Wilhelmshaven 83,552 95.2 124.5 30 16
Wolfenbüttel 54,461 104.6 94.9 28 16
Wolfsburg 121,199 106.5 120.0 40 20

NORTH RHINE-WESTPHALIA
Besides the three top locations of Cologne, Düsseldorf
and Dortmund, North Rhine Westphalia also features a
variety of interesting medium-sized towns which are
very popular amongst national and international chains
and investors, as well as centre developers. One can
generally say that space restrictions significantly reduce
the centrality of even the larger cities, especially in the
Ruhr region. An added factor at many locations is the
competition for more and more retail spaces around
one’s own belfry, which also damages the traditional
prime locations. Irrespective of this, the most populous
federal state features a number of locations claiming a
leading position on the wish lists of nationally and
internationally successful retailers.
Cologne
Average shop rents in prime locations
in North Rhine Westphalia for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
Cologne is unquestionably one of these locations. The cathedral town and Rhine metropolis
with a population of around one million is Germany’s fourth largest city and a shopping
destination for a region providing more than 3 million people in the immediate catchment
area. With the Schildergasse and Hohe Strasse, North Rhine-Westphalia’s largest city is
endowed with two of Germany’s best frequented pedestrian areas. Irrespective of the five
shopping centres which have meanwhile been established in the urban districts all around
the city with a sales area of approximately 150,000m2 , the market for retail spaces in the
inner city pedestrian areas remains highly competitive. The virtually unique circuit route
from the cathedral via Hohe Strasse, Schildergasse, Neumarkt, Mittelstrasse and back via
the Ehrenstrasse and Breite Strasse places Cologne very near the top on the priority list of
every expansion plan entertained by cross-regional and most of all international retail chains.
Given the extensive catchment area, the tourist appeal and the size of the city, the demand
for spaces on Schildergasse, Hohe Strasse and also the Ehrenstrasse is simply enormous. The
establishment of ever new concepts and the tough competition between all leading national
and international chains in the direct neighbourhood force retailers into ever shortening
renovation intervals if they wish to remain competitive. The battle for vacated spaces is
also expressed in constantly rising rent levels, reflecting the attractiveness of the location
for retailers. From 2006 to 2007 alone, the average rental rates for smaller shop premises
in the Schildergasse have again risen by more than 13 per cent, while the rents achieved
in the period from 2002 to 2007 increased by more than 31 per cent.
Store renovations and redesigns such as, for example, both the young fashion outlets, Pimkie
and Orsay, as well as concept expansions like the one for the three-storey perfume chain,
Douglas, which has integrated a wellness temple on approximately 270m2 in its Schildergasse
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
durchschnittliche average development Entwicklung of shop derrents
Ladenmieten in North Rhine in NRW Westphalia
107

premises, provide Cologne with additional customer magnetism. The expansion and optimal
utilization of spaces requires an ever increasing amount of creativity and flexibility. The
Danish company, Bestseller, therefore presents itself with its label, “Jack & Jones”, on a
small ground floor entrance space preceding a basement space that is ten times larger. The
“Kult” concept in Schildergasse follows the same path.
However, it is new concepts and chain operations which particularly serve to liven up the
shopping boulevard, Schildergasse. Claudia Sträter has started with a new concept at
number 105A Schildergasse. New openings by the chains, Swarovski (69-73 Schildergasse)
and Mexx (46-48 Schildergasse), will follow this year. Sidestep (104 Schildergasse) and
Springfield (72-76 Schildergasse) have already opened. Footlocker has established an outlet
with a sales area of about 570m2 directly next to Springfield. Mexx is moving into the building
of the long-established toyshop, Feldhaus. Also in a prime location and diagonally across
the road, the long-established shoe store, Böhmer, makes room for a new building which
is certain to provide space for a representative tenant without difficulty.
Cologne’s Hohe Strasse has in recent years steadily enhanced its consumption orientation
and was able to measurably increase pedestrian traffic volumes. The numerous new tenancies
are predominantly recruited from the sectors young fashion, mobile communications and
catering. The chain operation, Colloseum, has driven out the long-established auctioneers
previously at this location with its product line, “Forever 18”. In parallel, the Scandinavian
company, Dressmann, the clothing chain, Hallhuber, the jeweller, Schäfer, Vodafone, e-plus
and Häagen Dazs have all been able to secure new spaces. The young fashion concept, Tally
Weijl, has moved into the former Coast space in the Stollwerkhaus. The former Springfield
shop has been taken over by the shoe chain, Görtz. The traditional Kristall Passage with its
window displays worthing of preservation order has deserted its location of many years at
Wallrafplatz. With continually rising rental rates, some trendy concepts such as the clothing
chain, Gas Jeans, are moving their outlets to the prime location in Ehrenstrasse, which has
been up-and-coming for years and continues to be so.
Given the surplus of chain store demand
for suitable spaces in Ehrenstrasse, many
people fear that the street’s special
atmosphere could suffer as a result. Many
smaller and, most of all, trendier retailers
are therefore moving to neighbouring
side streets. New openings of the Sixty
branch Energie, Tommy Hilfiger on 250m2 at 27A Ehrenstrasse, Eye Catcher at
numbers 18-26 or the first German outlet
of the French lingerie specialist, Soleil
Sucré, at 18-26 Ehrenstrasse, in combination
with Mandarine Duck, the
Spanish shoe label, Camper, Gas Jeans,
Replay, American Apparel and the Apple
108
Cologne, Ehrenstrasse 54, Kyo my friend
COMFORT: Letting

computer partner, “Gravis”, have ensured
that every second shop has by now been
taken over by a chain operation. The most
strongly regretted loss in Cologne is the
restaurateur, “Café Spitz”, which used to
provide a venue and staying point for most
visitors. The development is nonetheless
positive. The reason being that small and
local retailers find their niches in Cologne
in side locations as well and are also able
to benefit from the cathedral city’s high
visitor influx in these less frequented areas.
Even in the prime locations of smaller
towns, retailers of this kind, with their
unusual and exclusive propositions, would
stand less of a chance than in the
slipstream of these audience magnets
within the larger shopping capitals.
The more sophisticated shopping boulevard, Mittelstrasse, presents itself with new concepts
by Toni Gard, Marlboro Classic, René Lizard, Marc Cain, the men’s outfitter, Linus, Eterna,
Lilly and Lex (first German outlet with DOB + accessoires), as well as St. Emile and Gerry
Weber in the future. These top class and renowned new tenancies serve to enhance the
location as well as the rental rates in Mittelstrasse. Development potential in a similar
direction is still available in Breite Strasse. Despite the three inner city shopping arcades
and centres, “DuMont'-Carré”, “WDR-Arkaden” and “Opern-Passage”, the Breite Strasse
– predominantly a link road – continues to be the least expensive location within Cologne’s
pedestrian area. The comparatively low rents benefit regional chains as well as concepts
unable to afford metropolitan top locations given their specialised propositions. Examples
of these are Ulla Popken or Bose Soundsystems. Successful large space concepts such as the
Görgens group’s “Kult” and “Planet” featuring a sales area of approximately 2,000m2 , also
serve to attract a younger audience here.
Cologne, Mittelstrasse 15-17
Cologne, Mittelstrasse 19, René Lezard
However, the media and cathedral city
Cologne is not only on the wish list of chain
store operations, but also on that of
investors. Above all international investors
with higher security requirements accept
initial yields with a 4 preceding the decimal
point for true prime locations in Cologne.
The two probably most spectacular
investment deals in Cologne in 2006 were
the sale of the Neumarkt Galerie with a
floor space of 33,500m2 and the anchor
tenants Karstadt Sport, Sinn Leffers
109

and the bookstore, Meyersche Buchhandlung, to
the Irish investor, Quinlan Private, and the sale of
the Olivandenhof with the adventure concept,
“Globetrotter”, towards the end of 2006 to the Danish
investor, Kristensen.
Cologne will continue to strengthen its dominant retail
position in North Rhine-Westphalia and, owing to the
large demand surplus, also provide rising rents and real
estate values for shop premises and commercial buildings
in the future. Particularly the internationally successful
chains attach great importance to representative spaces
in the cathedral city. The city remains a favoured location
for the first realisation, “live” testing and market
introduction of many a new concept.
Düsseldorf
North Rhine Westphalia’s state capital, Düsseldorf, whose fame as a fashion centre and trade
fair location has spread far beyond German borders, is host to nearly all the larger and
international chains. As a fashion setting, Düsseldorf provides international flair with its
fairs cpd, Global Fashion or the shoe fair, GDS, and is a gateway to the establishment of
new concepts for many retailers.
The long-established multi-label shop, Eickhoff, has been thoroughly renovated in
Königsallee. A further new addition is Tommy Hilfiger, now occupying the former
Kookai space with its “denim” concept.
COMFORT has been able to successfully
arrange long term leases for the top
tenants, Hennes & Mauritz and Esprit and
their flagship stores, as part of the
CENTRUM Grundstücksgesellschaft mbH
project development at number 76-78
Königsallee. Also new in Königsallee are
Orwell (number 27) and René Lezard in
the Kö-Galerie. The Heinemann-Haus
building on the corner of Königsallee/
Schadowstrasse will be occupied by the
book store, Mayersche Buchhandlung,
on five levels and approximately 4,000m2 ,
as well as the jewellers, Tiffany
and Escada, as from August 2008.
Düsseldorf, Königsallee 76–78, H&M, Esprit
The new Hennes & Mauritz concept,
CENTRUM: Project developer/owner
“COS”, opened in the Spring of 2007 at COMFORT: Investment, Letting
110
Average shop rents in prime locations
in Cologne for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
270
240
210
180
150
120
90
60
30
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Köln of
shop rents in Cologne

80 Königsallee.The growing chain demand in the Königsallee area is, on one hand, owed
to the continuing activities of the luxury-oriented and sophisticated tenants and, on the
other, to demand from high-value young fashion outlets. Their establishment is a result of
the audience’s hybrid shopping behaviour.
The shell construction of the new Breidenbacher Hof between Königsallee and Heinrich-
Heine-Allee has been completed. The foundation stone for the project carried out by the
Kuwaiti real estate company, Pearl of Kuwait, was laid on August 16, 2006, on a site
measuring just short of 3,000m2 . The new building will accommodate a five-star hotel of
the Capella Hotels & Resorts Group, as well as offices and high-quality shops. The total
investment sum is approximately 160 million euros.
Besides the hotel operation with just short of 100 guestrooms, the new, nine-storey
Breidenbacher Hof will also feature penthouses, owner-occupier flats, a restaurant and seven
shops (including Hugo Boss, Escada, Claudia Sträter, Parfümerie Schnitzler, La Mer Salon
and Douglas). The Breidenbacher Hof, located in the centre of the triangle formed by
Königsallee, Flinger Strasse and Schadowstrasse, can be viewed as an additional asset for
the prime locations and upgrade for the less-frequented side of the Königsallee. The
establishment of the high-value furniture dealer, Tristano Onofri, and Orwell in this section
of the Königsallee may provide a first indication of this.
Chains dependent on high pedestrian volumes and a young clientele are principally attracted
to the Flinger Strasse. Some of the more trend-oriented concepts dominating here have
undertaken space and location optimisation efforts. This includes, for example, Tally Weijl
moving its location to the
area of Flinger Strasse at
the corner of Kasernenstrasse.
Their former
location is now occupied
by the Madonna label.
The Dutch underwear
specialist, Hunkemöller, has
also established an outlet
in Flinger Strasse. As part
of the CENTRUM project
development in the former
Woolworth building, Zara
has already opened on
approximately 1,200m2 Düsseldorf, Flinger Strasse 28, Zara/Lascana
CENTRUM: Project development
, as
well as the underwear
concept, Lascana, which is
part of the Otto group. The
large demand which has
existed for years for spaces
COMFORT: Letting, Investment
in Flinger Strasse also has a
111

positive effect on adjoining locations such as Mittelstrasse, where a Miss Sixty opened in
2007, amongst others. The strong appeal of the Flinger Strasse has resulted in a significant
upgrade of the locations surrounding it. Examples are the stretch of the Flinger Strasse
extending beyond the Kult department store, which seems to be turning into a true prime
location, as is Mittelstrasse, which provides a natural connection between the traditional
prime location and the Karlsplatz (market) square. This fact is also demonstrated by the
establishment here of various outlets from chains which usually only rent shop premises in
top locations.
Schadowstrasse, which is intersected by Fahrstrasse in the eastern section, on the busier
side of the road is characterised by the magnetism of the department stores, amongst other
factors. The Karstadt group is planning to transform its building in Schadowstrasse into a
luxury department store, modelled on the Berlin KaDeWe in 2008 and 2009. The side which
is a little less lively could be improved as soon as a long term decision has been reached
concerning traffic restraint measures and a pedestrian precinct in this area in the wake of
the forthcoming construction of an underground.
In parallel to the present pedestrian Schadowstrasse and
as an extension of the Königsallee towards the
Hofgarten, the “Kö-arc” project featuring partial retail
uses has been the subject of discussion for quite a while.
A final decision regarding the realisation has not yet
been reached, however, and is to be expected at the
beginning of 2009 at the earliest. Sustained discussions
concerning the removal of the “Tausendfüssler”
(millipede) overpass follow in the same vein. The
overpass could be removed if the Berliner Allee would
be tunnelled under in this section. This would be of
great importance for improving the pedestrian traffic in
that part of Schadowstrasse which is momentarily
dedicated to road traffic, as it would entail the removal
not only of the visual barrier of the “millipede” near P&C,
but also the psychological barrier of the pedestrian lights
at Berliner Allee.
Dortmund
With 588,000 residents, Dortmund is North Rhine-
Westphalia’s second largest city and has, in recent years,
managed to become the number one shopping
destination in the Ruhr region. The pedestrian area,
Westenhellweg, has continued improving its
attractiveness and has recently drawn more passersby
than ever before. This is based primarily on the successful
112
Average shop rents in prime locations
in Düsseldorf for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
240
210
180
150
120
90
60
30
0
210
180
150
120
90
60
30
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Düsseldorf of
shop rents in Düsseldorf
Average shop rents in prime locations
in Dortmund for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Dortmund of
shop rents in Dortmund

new chains opening such as Zara and Ansons, but also on the modernisation and expansion
of existing concepts like Esprit, Mayersche Buchhandlung, Pohland, Appelrath-Cüpper and
Peek & Cloppenburg.
Plans for a 550 million euro project named 3do, entailing a new main station building with
integrated shopping centre have not come to fruition. Shortly after the urban planning
contract with Sonae Sierra for 3do had been terminated, the ECE redoubled its planning
efforts for the realisation of a centre on the Thier plot. Negotiations with the adjoining
land owners are currently underway in order to provide the planned sales area measuring
approximately 30,000m2 with a good connection to the Westenhellweg pedestrian area.
Particularly the owners of the commercial buildings in the momentarily slightly weaker part
of Westenhellweg between Petrikirchhof and Westentor, welcome this new development,
as this section could benefit at Ostenhellweg’s cost in the medium term owing to its
proximity to the centre. According to ECE estimates, the development plan procedure
could start in the Autumn of 2007, with a 2011 opening at the earliest.
Münster
The Westphalia region with its very strong economic performance provides a particular focus
for retailers and investors. Tourism alone accounts for approximately 850 million euros worth
of retail, catering and services turnover in Münster. The city retailers benefit strongly from
the Münster Arkaden with a sales area of roughly 30,000m2 , as well as from the centre’s
anchor tenants in the shape of Peek & Cloppenburg, Esprit, Zara, Thalia and Saturn. The
most recent chain outlets to be established at Prinzipalmarkt were Tommy Hilfinger and
Appelrath-Cüpper, and at the Roggenmarkt Hirmer with over 600m2 of floor space. Further
new developments and conversion measures decreed by the municipal authorities will
create additional retail spaces in the Stubengasse area and the adjoining Hanseviertel
quarter, further boosting these inner city locations against their green field competitors.
Businesses to settle here include the shoe retailer, Görtz, with approximately 2,500m2 , New
Yorker with ca. 1,200m2 and H1-Kultstore with about
1,200m2 . A slight weakening of the lower Salzstrasse is
Average shop rents in prime locations
to be expected in the long term as a result of both the
in Münster for shop locations
with retail sales area of 80–120 square meters
“Hanseviertel” and “Stubengasse” projects between the
in comparison to the average development
of shop rents in Germany
Kaufhof and Karstadt department stores and
160
Ludgeristrasse or “Münster Arkaden”, respectively. At
140
120
the same time Ludgeristrasse, which has increasingly
100
gained in strength as the outstandingly integrated
80
shopping centre “Münster Arkaden” became better
60
known, will probably receive another boost. Irrespective
40
of the increased supply of spaces, rents continue to
20
rise in Münster.
0
Two locations enjoying particularly great popularity
besides Bielefeld, where the demand is heavily
2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany
average Ladenmieten development in Münsterof
shop rents in Münster
113

concentrated on the Bahnhofstrasse and Niedernstrasse, are Gütersloh and Paderborn. The
top chains have increasingly rented spaces here in recent years, contributing to an
improvement in the range available. COMFORT Düsseldorf GmbH has a large number of
requests for these locations, especially for larger retail spaces. No significant retail projects
which could in effect significantly redirect established passer-by routes are known of in these
three Westphalian metropolitan locations.
Aachen
Another city that continues to enjoy a
great deal of interest is Aachen. Thanks
to COMFORT’s mediation, New Yorker
and Görtz will open new shops in 2008
in the top shopping street,
Adalbertstrasse, each of them featuring
more than 2,000m2 of floor space in the
former Woolworth building. Plans to
build a centre in Adalbertstrasse’s
previously weakest section between
Kugelbrunnen and Kaiserplatz have
Aachen, Project study Kaiserplatz Galerie, Exterior View
COMFORT: Center Consulting
114
Aachen, Project study Kaiserplatz Galerie,
Interior View
COMFORT: Center Consulting

concretised. First demolition activities have already been started on in the Spring of 2007,
the opening of the Kaiserplatz Galerie with approximately 28,000m2 of floor space is
scheduled to follow in the Spring of 2010. COMFORT Center Consulting has been charged
with consultancy services and the letting of retail and catering spaces and is registering
very strong demand. Once the Kaiserplatz Galerie opens, it will not only help enhance the
attractiveness and sector range of the existing prime location with its architecture and design,
but also by virtue of the large number of very accessible parking spaces and the interesting
concepts to establish outlets here.
Plans for the Büchel project have also made a lot of progress. It entails the replacement of
Aachen’s most-frequented multi-storey car park by a new building complex with a special
land use concept. The design provides for future parking spaces in the new underground
car park, whereas the ground and first floors will be
dedicated to small-scale retail operations and continue
Average shop rents in prime locations
to be used after closing time as a dance floor, gallery or
in Aachen for shop locations
with retail sales area of 80–120 square meters
nightclub. The next-higher level will host large-scale
in comparison to the average development
of shop rents in Germany
catering uses with a public sandy beach in summer and
110
100
an ice-skating rink in winter.
Although the construction of the Aachen Arkaden on
the former freight station site, Rothe Erde, has been
started in the meantime, there is differing information
available on the letting status and anchor tenants of the
available retail spaces measuring approximately
15,000m2 . It is to be expected that the attractiveness of
this centre will not be strong enough to permanently
establish it outside the city.
Bonn
The great popularity enjoyed by North Rhine
Westphalia’s southernmost city, Bonn, remains constant.
Remigiusstrasse, Poststrasse and Sternstrasse continue to
be Bonn’s most established shopping areas. However, the
adjoining locations of Dreieck/Münsterplatz, Vivatsgasse
and Fürstenstrasse also show positive development. In
addition to a lack of retailers in the luxury segment, the
small-scaled nature of the properties and conservation
issues in many cases render the creation of the larger
spaces required to introduce more audience magnets
difficult. Only Hennes & Mauritz has been able to rent
a space of approximately 1,170m2 in Remigiusstrasse in
recent months, and that only because the owner had
developed a solution for the required conversion
90
80
70
60
50
40
30
20
10
0
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Aachen of
shop rents in Aachen
Average shop rents in prime locations
in Bonn for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Bonn of
shop rents in Bonn
115

measures in close collaboration with the conservation authorities. These processes are
often as long-winded as they are cost-intensive and hence avoided by many owners. As of
August 2007, there is no news concerning the “Bonner Loch” plans which have been
discussed for years and whose realisation continues to appear far off in the future.
Essen
A whole series of shopping centres and other projects has already been realised in the western
Ruhr region and others will follow. Examples include the opening of the 70,000m2 centre
at Limbecker Platz in Essen with a first construction stage in 2008 and the second in the
year 2009. Following a long barren spell, a slight revitalisation of the market is meanwhile
making itself felt in the location of Essen. Despite recent falls in the pedestrian traffic figures
in Limbecker and Kettwiger Strasse, retailers are again showing greater interest in new
leases, at least for spaces in Limbecker Strasse. The City Centre Essen, opened in 1981 at
the Porschekanzel, is to be redesigned for approximately
40 million euros and to be renamed Rathaus-Galerie in
future. Given these two strong magnet poles at both
Average shop rents in prime locations
in Essen for shop locations
ends of the Limbecker Strasse – comparable with the
with retail sales area of 80–120 square meters
in comparison to the average development
tried-and-tested “dumbbell principle” – one may expect
120
of shop rents in Germany
that the Kettwiger Strasse will have to countenance
110
100
reductions in pedestrian traffic in the medium term.
90
80
Even the investments in Essen’s main station which have
70
meanwhile been promised will probably be unable to
60
50
stop this development in the long run. At the moment,
40
30
most of the clothing department stores and large-scale
20
10
concepts in Kettwiger Strasse are owned. Strategic sale-
0
and-lease-back concepts in order to reduce medium term
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
risks and enable more flexible reactions to possible
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Essen of
location shifts cannot be excluded.
shop rents in Essen
Duisburg
The CityPalais in Duisburg opened in March 2007 already.
Given the overall conception consisting of a multi-storey
car park with approximately 670 parking spaces, the
Mercatorhalle with an event, conference and meeting
centre and a casino, the retail space of approximately
2,900m2 can be considered insignificant for the quality
of the location, in spite of its high-profile situation in
the Königstrasse pedestrian area. The reason being that
the “Forum Duisburg” with approximately 57,000m2 of
retail space will open at the end of 2008 and have a
significantly larger impact on the attractiveness and
116
Average shop rents in prime locations
in Duisburg for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Duisburgof
shop rents in Duisburg

segment range available in Duisburg’s inner city location. In July 2007, Multi Development
was already in a position to announce a letting status of 85 % with textile magnet concepts
such as H&M, New Yorker and The Sting. In contrast to Essen, no significantly increased
demand from retailers and investors is to be registered in the wake of the Duisburg centre
currently being constructed.
The deterioration of the Münzstrasse pedestrian area, forecast for a long time, has
meanwhile become a reality. Irrespective of the presence of clothing department stores
C&A, P&C and Sinn Leffers at the end of Münzstrasse, there is no demand for vacated spaces
from interesting national and international retailers. A colourful melange of 1-euro-shops,
fast food outlets and aggressively priced concepts is the result of this process.
Bochum
On the other hand, the demand for Kortumstrasse in Bochum between Südring and
Bongardstrasse remains consistently high. This is where the opening of the Kortum
department store building with approximately 16,500m2 of floor space and a new set of
tenants is expected for the end of 2007 following the completion of renovation measures.
The anchor tenant is Saturn, with the remaining spaces being distributed across nine to ten
further units. The fact that the demand
for larger retail spaces in Bochum has
remained unsatisfied for many
years has motivated ECE to announce
plans for the construction of a 25,000 to
30,000m2 shopping centre on the
site of the magistrate’s/district court
adjoining Husemannplatz. The further
development of these discussions is
certain to be followed with great interest
by many market players. If the shopping
centre, which according to ECE rumours
will be called “Gerichts-Arkaden”, is
realised, one can expect that both ends
of the Kortumstrasse – i.e. beyond
Südring and beyond Bongardstrasse – will
experience further reductions in
pedestrian traffic, accompanied by the
correspondingly negative consequences
for rents and real estate values at Bochum, Kortumstrasse 49
this location.
COMFORT: Investment
The planning and construction of new centres has been started in several North Rhine-
Westphalian cities; descriptions of some of these projects follow below. In Neuss, the
municipal authorities have picked mfi as the investor for a shopping centre planned in the
117

city. This is where the Neuss Arkaden with approximately
33,000m2 are to be created between Kastellstrasse and
Glockhammer. In Mönchengladbach, ECE was given the
council go-ahead for the realisation of a centre with a
maximum of 25,600m2 of retail space in the vicinity of the
former theatre in Hindenburgstrasse. The planned
shopping centre “Forum Mönchengladbach”, will be
connected to the existing Theater-Galerie and the C&A
fashion store. The 100 million euro centre is scheduled to
be opened in 2010 or 2011, and will make comprehensive
use of the 25,600m2 of floor space. Mönchengladbach
retailers continue to lobby for limiting the space to a
maximum of 20,000m2 . In Bergisch-Gladbach, the
topping out ceremony for the Rheinberg Passage with a
floor space of approximately 17,000m2 was held in April 2007. In neighbouring Leverkusen,
urban planning contracts concerning the shopping centre Rathausgalerie, were signed in
May 2007. In compliance with the agreements, ECE will realise a maximum retail space of
22,600m2 and another 2,300m2 for catering and retail-related services here. At the behest
of the council, a shopping centre is to be built on the Königlicher Hof site in Moers. Here
several investors still compete with their various concepts. Opposition to the planned Multi
Development centre, Domhof-Galerie, with a floor space of approximately 17,000m2 Average shop rents in prime locations in
Bochum (excluding Wattenscheid)
for shop locations with retail sales area
of 80–120 square meters in comparison to the
average development of shop rents in Germany
90
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Bochum of (ohne shop rents
Wattenscheid)
in Bochum (excluding Wattenscheid)
in
Minden grew in the beginning of 2007, but successful preventions of this type of
development are becoming rarer and rarer. One exception is apparently provided by
Krefeld, where the municipal authorities have decided to abstain from initial centre
construction plans, at least in the near future. The impact
of a shopping centre on the respective retail scene of a city
depends on the location. In many cases, large shopping
centres provide significant competition for local retailers,
while the added space results in a shifting or desertion of
existing retail locations. The new shopping centre, in most
cases, forms the new central point of the city. The further
away a previously established retail location is situated
from the centre, the higher is the risk that pedestrian
volumes will decline or shift and that future new leases can
only be realised at a reduced rental rate. The smaller the
town is and the weaker the region’s economic key figures,
Frank Kaiser,
the greater is the danger presented by such a centre.
Authorised signatory/Investment
118

Maximum rents in North Rhine-Westphalia in 2007
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Aachen 258,208 99.3 125.3 100 62
Bad Salzuflen 54,673 103.5 85.6 33 19
Bergisch Gladbach 105,761 117.1 93.1 45 25
Bielefeld 326,925 100.6 128.1 125 70
Bocholt 73,790 101.4 124.7 32 18
Bochum excluding Wattenscheid 385,626 99.7 115.0 80 39
Bonn excluding Bad Godesberg 312,818 106.9 114.3 120 67
Bottrop 119,356 98.2 98.5 35 20
Castrop-Rauxel 77,619 96.8 95.4 25 15
Detmold 73,508 103.4 110.1 45 30
Dinslaken 70,189 103.8 97.1 58 31
Dormagen 63,466 106.2 79.1 28 10
Dorsten 79,639 101.0 105.1 30 18
Dortmund 588,168 97.4 110.7
Westenhellweg 200 105
Ostenhellweg 115 45
Duisburg 501,564 94.0 96.2
Königstrasse 75 35
Kuhstrasse 60 30
Münzstrasse 28 16
Sonnenwall 21 10
Düren 93,656 101.1 120.9 55 32
Düsseldorf 574,514 111.9 130.8
Flingerstrasse 190 100
Schadowstrasse 210 125
Königsallee 200 105
Eschweiler 55,691 98.9 102.2 30 12
Essen excluding Rüttenscheid 585,430 101.5 118.4
Kettwiger Strasse 110 55
Limbecker Strasse 85 40
Euskirchen 55,110 101.8 133.4 40 22
Gelsenkirchen excluding Buer 268,102 92.9 111.8 58 32
Gladbeck 76,861 95.4 79.5 35 22
Gummersbach 53,048 102.2 130.1 38 24
Gütersloh 96,145 106.7 107.5 55 32
Hagen 196,934 99.6 119.5 50 32
Hamm 184,239 94.3 99.1 28 15
Hattingen 56,979 102.0 76.4 41 20
Herford 64,965 103.4 122.7 38 22
Herne excluding Wanne 170,992 93.2 88.6 40 22
Hilden 56,545 112.6 100.2 50 30
Ibbenbüren 51,010 97.2 101.6 26 12
Iserlohn 97,285 102.6 110.7 45 28
Kleve 49,099 97.6 140.6 32 16
Cologne 983,347 106.0 128.5
Schildergasse 250 140
Hohe Strasse 220 125
Mittelstrasse 80 40
Ehrenstrasse 100 55
Breite Strasse 65 40
Krefeld 237,701 100.9 120.1 75 45
Leverkusen 161,227 106.5 104.1 43 18
Lippstadt 67,446 101.3 120.6 47 28
Lüdenscheid 78,688 104.2 109.2 40 22
Minden 83,118 99.6 124.6 44 24
Mönchengladbach excluding Reydt 261,444 100.6 122.8 60 36
Moers 107,547 101.4 111.2 55 26
Mülheim an der Ruhr 169,917 107.7 124.0 30 17
Münster 270,868 105.3 139.3 140 80
Neuss 151,610 107.2 113.4 54 26
Oberhausen 218,898 96.6 131.7 28 17
Paderborn 143,769 99.5 144.4 82 40
Ratingen 91,975 116.2 111.3 55 28
Recklinghausen 121,827 98.8 116.5 50 25
Remscheid 115,864 103.9 96.8 32 18
Siegen 106,293 100.2 139.4 50 27
Soest 48,223 97.2 165.4 37 20
Solingen 163,581 102.8 95.4 34 17
Unna 68,264 99.9 103.8 40 28
Velbert 87,378 106.0 87.2 35 20
Viersen 76,330 102.5 97.6 34 16
Wesel 61,711 102.7 119.8 39 19
Witten 100,793 101.4 111.2 36 18
Wuppertal 359,237 101.5 106.6
Wuppertal-Elberfeld 75 32
Wuppertal-Barmen 40 22
119

RHINELAND PALATINATE
The state capital Mainz strongly dominates Rhineland
Palatinate’s retail landscape in terms of retailer demand,
rental rates in prime locations and also purchasing power.
Only the centrality rankings showing the actual
purchasing power achieved within the catchment area
are significantly lower than in the cities of Trier (197.2),
Kaiserslautern (159.6) and Koblenz (156.3) The reason
being that Mainz competes with neighbouring
Wiesbaden, which is permanently building up in terms
of retail offerings. The number of residents of Mainz and
the surrounding regions stating that they only go
shopping in Mainz’ inner city is above average at 42 %.
Mainz
The inner city of Mainz featuring the pedestrian areas, Stadthausstrasse and Schusterstrasse,
presents itself as a stable retail landscape. Rental rates have experienced a steep rise owing
to surplus demand. In the first half of 2007, a retailer taking out a new lease on shop premises
with a floor space of 80–120m2 had to expect a monthly rent of 110 euros/m2 . This means
that the rental rates have risen by more than 20% over the previous year, owing to the
improved economic retail climate and a resulting growth in demand.
The largest new development is the
revitalisation of the commercial building,
“Am Brand 41”, in Mainz, where the
DEGI Deutsche Gesellschaft für
Immobilienfonds mbH has redeveloped
a former department store. On the
approximately 8,500m2 of retail rental
spaces and about 3,200m2 of office and
practice spaces realised at an overall
volume of approximately 18 million
euros, the electrical goods specialist,
Saturn, has opened a new outlet on
approximately 5,100m2 on three levels, as
well as the fashion chains Zara on
approximately 1,600m2 and Esprit on
about 1,900m2 . Following the redesign of
the former Sinn Leffers building with the
opening of Esprit, Zara and Saturn, as
well as the expansion of the Hennes & Mainz, Am Brand, Zara/Esprit/Saturn
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Mauritz chain outlet on nearly 3,000m2 , P&C is now also expanding its branch in Mainz.
Following a design by Cologne architect, Claudia Lindner, who also created the Saturn
building, the Düsseldorf fashion chain plans to move its window facade to the front and
integrate a part of the building formerly occupied by a Chinese restaurant. The range to
be presented here as from March 2008 on 6,750m2 is also to include “exclusive designer
labels”. Not least of all owing to the architectural upgrade, demand for shop spaces
continues to be very strong at this location. Large spaces as well as smaller units are of great
interest to well-known chains and difficult to acquire. One of the last companies to grasp
one of the opportunities was Marc Shoes, taking out a
lease on the object at 13 Am Brand. The Brand majority
Average shop rents in prime locations
holder, Günter Drees, has announced plans to acquire
in Mainz for shop locations
with retail sales area of 80–120 square meters
nine shops in Korbgasse in order to upgrade this
in comparison to the average development
of shop rents in Germany
previously weak shopping area between the
“Glaspalast” provided by Wohnbau with its market
buildings and the Brand complex.
Both of the pedestrian areas at Stadthausstrasse and
Schusterstrasse are also experiencing great demand.
Examples include e-plus opening a further outlet in
Stadthausstrasse, in addition to the existing Am Brand
location. The need to also renovate the Karstadt building
in Ludwigstrasse is obvious and openly advocated in the
press by the mayor of Mainz as well.
Koblenz
In the Koblenz pedestrian precinct, Löhrstrasse, the section between Altlöhrtor and
Pfuhlgasse has been greatly stabilised by the three new flagship stores of Hennes & Mauritz,
Esprit and Zara, underscoring the attractiveness of this inner city location directly abutting
the established ECE Löhr-Centre. The lower part of Lörstrasse (beyond Pfuhlgasse) in the
direction of the old town is still firmly in the hands of largely regional retailers and will
continue to attract a rather touristically oriented audience in future. Irrespective of the
presence one of Germany’s largest agglomeration of power stores in the direct vicinity, the
inner city of Koblenz impresses with a solid retail structure and therewith ensures the long
term value stability of inner city commercial properties. This is also illustrated by the high
rents payable for shop premises in prime locations. In the first half of 2007, a retailer taking
out a new lease on shop premises with a floor space of 80m2 –120m2 had to calculate
with a monthly rent of 95 euros/m2 . This means that rents have risen once more by nearly
12 per cent against the previous year in Koblenz which is relatively small with 106,000
residents.
A new shopping and adventure centre called “Mittelrheinforum” providing a retail space
of around 20,000m2 is now to be created on the central square of Koblenz inner city.
Building works are scheduled to start in the second half of 2008, the opening for Autumn
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121

2010. A suitable concept is to be found by means of an architectural competition. It is not
expected, however, that this centre will cause a serious impairment of the Löhrstrasse
pedestrian area or the existing ECE Löhrcentre.
Trier
In Trier, everything currently revolves around the Trier-Galerie from a retail perspective.
The shopping centre providing retail spaces of approximately 13,500m2 is scheduled to open
in September 2008 on the former Paulinus site in Fleischstrasse. Anchor tenants will be Kult
and Zara with sales areas of approximately 1,600m2 each. Numerous other well-known chains
such as Thalia, Mexx, Tommy Hilfiger or Hallhuber have also already succeeded in securing
spaces in this location.
Trier has an enormously high centrality ranking, which is attributable to its geographic
location and the large catchment area. Even from neighbouring Luxembourg, affluent
clientele is drawn to Trier. The demand for retail spaces remains strong, despite the added
spaces provided in the Trier-Galerie. As early as September of this year, Drogerie Müller will
open a 1,500m2 outlet as the next tenant of a section of the former Lindex branch in
Grabenstrasse. The remaining space in this object will continue to be used by the book store,
Thalia.
Trier is also of interest for investors. Examples include the acquisition of the object at 46-
47 Brotstrasse by a project developer who, in the medium term, plans to expand the floor
space of about 1,100m2 currently to roughly 3,000m2 .
The demand for suitable retail spaces in the pedestrian area, Fackelstrasse, in Kaiserslautern
remains sustainably high but only occupies fourth place in Rhineland Palatinate after Mainz,
Trier and Koblenz. Karstadt is planning an investment amounting to 100 million euros in
Kaiserslautern for the modernisation of its department store at that location. A relocation
within the city is also being considered as an option. In this case, a four-storey shopping
centre would be created at the current Karstadt location. Talks with investors concerning
this project have been confirmed by Karstadt, but no decision has been reached yet.
Ludwigshafen
In terms of retail magnetism, Ludwigshafen has traditionally been overshadowed by the
neighbouring shopping destination of Mannheim and the attractiveness of its inner city is
dwindling year by year. Now, however, there is new hope that the situation could noticeably
improve in the future. The Rathaus-Centre, currently still dominant by virtue of its tenant
mix, will be faced with a new and almost crushing competitor at the Zollhofhafen (at the
end of Bahnhofstrasse). The new ECE shopping centre project with outstanding traffic
accessibility is to feature approximately 1,300 parking spaces on around 30,000m2 of sales
area with about 120 new shops. The aim being the creation of an attractive urban quarter
122

next to the Rhine, which would upgrade the shopping location Ludwigshafen within the
region to a significant degree, tying purchasing power in the process. Once this project is
completed in 2009, a large section of the Bismarckstrasse between Bahnhofstrasse and Kaiser-
Wilhelm-Strasse would lose a very great deal of pedestrian through traffic, entailing a
corresponding change in the tenant mix. Kaufhof will, at the same time, invest in its
Ludwigshafen department store and therewith underscore
its positioning at the significant corner of Bismarckstrasse
and Bahnhofstrasse. Besides the conscious weakening of
the shopping street section mentioned above, the axis from
Zollhofhafen to the Rathaus-Centre would be strengthened
correspondingly. In addition, the cross-regional
attractiveness of Ludwigshafen would be further increased
by this city-near shopping centre project. The rental rates
in Ludwigshafen have in the past experienced a virtually
steady decrease as a result of the development described
above. Between the years 2002 and 2007, they dropped by
5.7 per cent, according to COMFORT calculations. In the last
Elisabeth Michalowski,
year alone, the rates again dropped by over 10 per cent. Letting
Maximum rents in Rhineland Palatinate in 2007
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Kaiserslautern 98,372 97.2 158.9 78 35
Koblenz 106,501 103.0 160.7 95 40
Ludwigshafen 163,343 97.8 107.8 33 15
Mainz 194,372 108.4 117.3 110 65
Neuwied 53,628 107.3 114.6 38 18
Neustadt an der Weinstrasse 66,144 101.2 129.4 42 20
Trier 99,843 94.3 197.5 97 50
Worms 81,545 99.7 130.2 35 18
123

SAARLAND
In the Saarland, the state capital of Saarbrücken is also virtually the only shopping
destination of cross-regional importance to benefit from the sustained retail and real estate
boom. While Saarbrücken has up to now served as the central setting of national and
international chain demand in the Saarland anyway, this dominant position will now be
underscored once more by the Saargalerie expansion pursued by the ECE.
In addition to the Saalgalerie expansion to approximately 25,000m2 of sales space, the section
of the prime location Bahnhofstrasse facing the station will also be upgraded by a new
development project at the station and corner of Viktoriastrasse by CENTRUM
Grundstücksgesellschaft mbH with a sales area of approximately 6,000m2 . This location, up
to now mainly characterised by discounters, snack bars and similar propositions, will given,
the new main entrance to the ECE centre, provide a new focus within the prime location
Bahnhofstrasse. Plans envisage three large units which would be harmoniously integrated
within the overall scheme of the pedestrian area while simultaneously being claimed as an
architectural highlight. COMFORT Düsseldorf GmbH, charged with letting the project, is
more than satisfied with the demand at this location. Talks and negotiations with chains
show that clothing and shoe chains, as well as other segments, are keenly interested in
Saarbrücken, Project study Bahnhofsstrasse 106–108
CENTRUM: Project development
COMFORT: Letting
124

large spaces in Saarbrücken. The immediate vicinity of the new main entrance to the
Saargalerie certainly provides these companies with a motivating factor that is anything
but insignificant.
Over 120 million euros are being invested in both these inner city developments. Their result
will be a further enhancement of Saarbrücken’s positioning as a shopping destination in
this border triangle region. That the Bahnhofstrasse is already currently engaged in a
positive development is evidenced by the two leases taken out by the vertical clothing chains,
Zara and Bestseller, concerning considerably more than 1,000m2 of rented space each. This
means that after Esprit, Hennes & Mauritz and s. Oliver, the key five textile chains will be
represented by an appropriate space in the state capital.
A high centrality ranking remains characteristic for Saarbrücken. The figure of 162.5 is far
above the federal average and hence more than makes up for the comparatively low
purchasing power rating of 99.1.
It remains to be noted that Saarbrücken benefits to an
enormous degree from the high willingness to invest
which is a characteristic of the 2007 real estate market.
The city will continue to strengthen its top position in
the Saarland even further in the coming years, attracting
more consumers from outside in the process.
Other cities in the Saarland, such as, for example,
Neunkirchen with the shopping centre, “Saarpark”,
also operated by ECE or the tranquil but nonetheless
well-functioning inner city of Saarlouis, lag significantly
behind the dominant state capital of Saarbrücken as
supplementary propositions. Within a limited catchment
area, they provide an alternative for all those intent on
doing their shopping far from the hubbub of the state
capital and/or shopping centres.
Maximum rents in Saarland in 2007
Average shop rents in prime locations
in Saarbrücken for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Saarbrücken 178,914 98.1 162.1 85 44
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durchschnittliche average development Entwicklung of der
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Saarbrücken
125

SAXONY
As is the case in many east German states, demographic
changes and their consequences will also strongly
determine the future of retailing in Saxony. According
to the most recent surveys, the state’s population is
expected to drop from around 4,350,000 currently to an
approximate population of only 3,750,000 residents by
2020. The forecast corresponds to a decline of
approximately 14 %. This also means that the number
of retail customers within certain target and age groups
will drastically decline. The causes are varied and have
been frequently discussed. The birth rate decline post-
1990, high structural unemployment and the resulting
emigration, particularly of younger population groups,
continue to be at the core of the problem.
Retailers will have to adapt to these framework conditions. Even if there is a cautious growth
in purchasing power, the absolute purchasing power volume will still decline owing to the
population drain. In addition, a large number of new products will also ensure an increase
in all sales areas everywhere. This is particularly problematic as the sales area per resident
is at 1.4m2 to 1.5m 2 already significantly larger in Saxony’s key cities than the national average.
In contrast to the small towns, the four most important cities in Saxony, namely Leipzig,
Dresden, Chemnitz and Zwickau, will also continue to prosper in future and enhance their
nimbus as attractive shopping destinations.
The developments in Leipzig and Dresden in particular warrant attention in this respect.
Owing to their size and population of approximately 500,000 each and their simultaneously
functioning pedestrian areas, both cities feature centrality rankings which outstrip the
national average. The purchasing power ranking is also slightly above average in relation
to the eastern part of Germany overall.
But the situation in Chemnitz and Zwickau can also be viewed as tending to the positive.
Together with Dresden and Leipzig, both the latter cities form the German metropolitan
region, “Sachsendreieck”, and are hence to be numbered amongst the eleven German or
120 European metropolitan regions, respectively. In these metropolitan regions, meaningful
economic and scientific potentials are the subject of targeted promotion on a state level
as well as within a European framework. This provides the “Sachsendreieck” region with
a special positioning opportunity within national and European competition.
In the long run, even Plauen and the network of the cities Görlitz, Bautzen and Hoyerswerda
stand a reasonable chance of further positive development as regional metropolitan
locations. This is because the Federal government, the state and the communities assist the
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Sachsen

medium-sized and basic centres in their development. Classic retailers nonetheless have a
difficult time in these small and medium-sized towns, particularly in the country regions,
and will continue to have to fight for their existence. The local retail landscape is dominated
by small and medium-sized specialist shops facing a steadily intensifying competition
provided by shopping centres, retail parts and an ever growing number of discounters such
as Aldi, Lidl or the chemist, dm-Drogerie.
Most of all in the medium-sized towns, a further expansion of the retail chains already present
is to be registered in the food, discount and consumer market segments. This is where new,
larger markets are created in locations usually enjoying an infrastructural advantage. The
product range, also in the non-food segment, is constantly being expanded and drives out
traditional suppliers and specialist shops.
In the larger cities, these suppliers are frequently integrated in shopping centres or district
centres as anchor tenants. The increase of large-scale retail sales spaces hence also benefits
the inner cities in comparison to the “greenfield sites” in the surrounding regions. The design
of the shopping centres has obviously proven itself in most cases. The large retail parks, on
the other hand, continue to prefer the urban periphery. The construction of new largescale
retail objects with sales areas of 5,000m2 upwards has in recent years almost exclusively
taken place in the metropolitan locations and their surroundings. In Leipzig, this included
projects such as the Breuninger Marktgalerie at the market; Galeria-Kaufhof in Grimmaische
Strasse; Karstadt in Petersbogen, as well as Messehof and Messehaus in Petersstrasse. In
Dresden, Altmarktgalerie and Wiener Platz in Prager Strasse deserve a mention, as do the
Galeria-Kaufhof and Peek & Cloppenburg in Chemnitz.
Further major projects such as the Brühl-Arkaden in Leipzig with a sales area of 27,000m 2
or the Forum Dresden/Centrum-Galerie with over 40,000m2 of retail space are currently in
planning or already in the realisation stage.
According to the chamber of industry and commerce, retailers in the Free State of Saxony
were provided with more than 6.92 million square meters of sales space overall. 37.4 % of
which is apportioned to the Dresden region, 38 % to the Leipzig region, 24.6 % to the
Chemnitz region and 3.4 % to the town of Zwickau. Approximately 40 % of the retail space
is on average dedicated to products catering to short term demand (food, alcohol, tobacco,
drug store articles, magazines and the like), 32 % to medium term demand (clothing,
shoes, sports articles) and 28 % to long term demand (furniture, TV/HiFi, cars,
watches/jewellery, photo articles). Leipzig and Dresden still need to be viewed as the most
important locations and also lead in the ranking of east German cities overall.
Leipzig
Leipzig presents itself to retail clients and tourists as a commercial metropolis and trade
fair location steeped in tradition and featuring state-of-the-art retailing and infrastructure,
as a large industry and service location with a university and six colleges, as well as a city
127

of music and culture. Leipzig's inner city still enjoys the
highest priority in authority planning for further retail
spaces. The aims being to further enhance the town
centre and tie purchasing power to Leipzig. Leipzig
features a centrality ranking of 110.3 and a purchasing
power index figure of 81.6.
According to research carried out by COMFORT, the
rentals of shop premises in Petersstrasse with sales area
sizes from 80 to 120m2 currently range between 80 and
140 euros/m2 , depending on the micro-location and
quality of the building. 105 euros/m2 were achieved on
average in the first half of 2007 for tenancy contracts
newly agreed in 2006.
New projects with large-scale retail spaces are either in planning or already in the construction
stage. These include the redevelopment of the Hadelshof in Grimmaische Strasse (completion
2008/2009) and the new university institute building with retail tenants on the ground and
first floor at the location of the old central student canteen in Grimmaische Strasse
(completion date 2008). Karstadt-Sport’s old commercial building in the southern section
of Petersstrasse is currently being prepared for a new use. Also making themselves felt already
are construction plans for the Brühl-Arkaden (to be completed in 2009).
Leipzig, Königsbau, Goethestrasse 1
COMFORT Berlin-Leipzig GmbH offices
Dresden
128
Average shop rents in prime locations
in Leipzig for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
The city-tunnel project may have suffered
setbacks, but with a completion date in
2010/2011, the inner city’s accessibility by
rail will be even further improved.
Although a significant expansion of the
available space follows in the wake of the
numerous new openings that have already
taken place or are yet to come, the demand
for up-to-date shop premises in the city's
top locations remains high and can hence
also not always be satisfied. The inner
city’s potential for a continuing positive
retail development is therefore correspondingly
strong.
Dresden also has optimal chances of becoming eastern Germany’s most successful city in
the future. The city, now virtually free of debts thanks to the sale of its council housing in
the real estate market, is seen as a successful example for a fruitful collaboration of the
political and economic spheres. After a large part of the traditional industry had also
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collapsed here following reunification, Dresden now
presents itself as the seat of government and a high-tech
location, but also as a cultural and touristic metropolis.
It goes without saying, alas, that the high unemployment
rate also continues to dampen economic development
in Dresden. This fact can hardly be overlooked when one
looks at the economic index figures in comparison to
most west German cities.
Irrespective of this, the city is attractive to retailers and
achieves a centrality ranking of 113.7 and a purchasing
power figure of 93.6. In 2006, shop premises in the prime
business location, Prager Strasse, achieved top rents
averaging around 100 euros/m2 .
Average shop rents in prime locations
in Dresden for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
Even if the state capital’s available sales space of 1.7m2 per resident attests to a good supply
situation, new retail spaces and shops along the axis Neumarkt, Prager Strasse and main
station are still very welcome. The centre should be promoted more strongly and compacted
with an additional, attractive tenant mix.
Another international investor could be won for an important inner city project with the
demolition and new development which has been started at the location of the former
Centrum department store (completion scheduled for 2009). Plans include a sales area of
approximately 52,000m2 with 150 shops and 1000 parking spaces. It has been possible to
secure P&C (12,000m2 ) and Konsum Dresden (3,000m2 ) as anchor tenants.
Dresden, Prager Strasse 11, Bestseller
COMFORT: Letting
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The area around the Frauenkirche is currently celebrating one completion after another.
This quarter development all around the Neumarkt is due to be completed in 2008. The
positive trend is also recognised by national and foreign investors and chain operations so
that the demand pressure remains high for spaces in locations on this level.
Chemnitz
Chemnitz impresses as an industrial location with a dynamic economic structure, a qualified
labour potential and a technical university, as well as with favourable labour costs and other
investment incentives. With approximately 250,000 residents, Chemnitz may only feature
roughly half the population of either Dresden or Leipzig. But it is still eastern Germany’s
fourth-largest city (28th position nationwide) and hence large enough to play an important
part for retailers. This is also demonstrated by the most recent new outlets to open in
Chemnitz’ inner city pedestrian area, which include Zara, Görtz and Esprit on the redeveloped
former post office site. With this project, the redesign of the shopping boulevard
along Strasse der Nationen/Am Rathaus/Neumarkt/Markt/Rosenhof is by and large
completed. According to COMFORT surveys, the top monthly rents paid in the first half of
2007 for shop premises in this, the best section of the pedestrian precinct, featuring sales
areas from 80 to 120m2 could range up to 60 euros/m2 , depending on location and
furnishings. These figures clearly document the city’s positive development in inner city retail
terms in the recent past. In 1999, these rents were still at 43 euros/m2 .
New project developments currently include an old and almost completely evicted stock
building in Strasse der Nationen/corner of Brückenstrasse and a building site at Düsseldorfer
Platz, however, their realisations are expected to require a little more time owing to a
cautious response in the tenant market.
Zwickau
With approximately 100,000 residents, Zwickau takes 84th position in the nationwide city
size ranking. The town is able to look back on more than 100 years of automobile
construction. In many a local family, whole generations have been and continue to be
employed in the car industry. Volkswagen with its numerous suppliers and the associated
college are leading factors in today’s positive development.
But Zwickau would hardly be a metropolis today if it weren’t for the sum total of 400,000
people from the surrounding communities who traditionally depend on the city as a
shopping and service destination. In recent years, Zwickau has been able to successfully
increase its attractiveness to shoppers and it now features a functioning pedestrian area
in the shape of Plauensche Strasse, whose positive development also radiates to the Äussere
Plauensche Strasse. The Zwickau Arkaden shopping mall has also contributed to the
strengthening of the inner city. Along Münzstrasse, Kornmarkt, Hauptmarkt and
Hauptstrasse, however, many retail spaces are no longer being used and are in need of
130

modernisation, having fallen victim to this shopping centre. At the moment, these spaces
still hide potentials for a further upgrading of the city centre with restaurants, cafes, shops,
hotels and service providers. The top prime location most requested by chain operations is
not very large, which is also the reason why top monthly rents of up to 45 euros are being
asked for shop premises measuring from 80 to 120m 2 , depending on location and furnishings.
Alexander Folz,
Managing Director
Maximum rents in Saxony in 2007
Enrico Näther,
Letting
Jan Wetzel,
Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Chemnitz 246,587 92.1 128.6 60 30
Dresden 495,181 93.6 113.7 100 55
Leipzig 502,651 89.6 110.3 105 60
Zwickau 97,832 89.6 144.5 45 25
131

SAXONY-ANHALT
Like the other new Länder within the Federal Republic of Germany, since 1990 Saxony-Anhalt
has had to endure a strong decrease in population, which will continue through 2020
according to recent population projections for Saxony-Anhalt. If 2,738,928 inhabitants
were living in Saxony-Anhalt in 1995, in 2004 there were only 2,494,437. Following the latest
population projections, in to 2020 Saxony-Anhalt will only count approximately 2 million
Inhabitants. This strong decrease in population is equally due to low birth rate as well as
to high unemployment. In particular, many young adults searching for employment have
moved away to western and southern parts of Germany. These circumstances have also given
way to reduced growth potential in the retail trade sector in Saxony-Anhalt. The restrained
increase in purchasing power per inhabitant was not able to compensate adequately for
the decrease in inhabitants. There are, nevertheless, in Saxony-Anhalt, like everywhere in
East Germany certain locations in which not only retail trade prospers. This is undoubtedly
the case in Halle an der Saale and in Magdeburg. The retail sales area in Saxony-Anhalt
corresponds to the country-wide average of 1.3 to 1.4m2 per inhabitant, whereby in the
city centres the situation clearly differs from these average values. Thus, Magdeburg has
2.7m2 and Dessau 2.2m2 of retail sales area per inhabitant. Thereby, to some degree both
cities present limited purchasing power in their trade area compared to the reference
values for such metropolitan areas as Berlin, Leipzig or Düsseldorf.
Small and medium-sized specialist retail shops continue to hold the highest market share
among business types with approximately 25% in Saxony-Anhalt. However, they have to
compete heavily against purchasing power outflow to shopping centres and neighbouring
regional cities – in particular in the small and medium-sized towns which are the main
locations of the small business specialized trade. On the other hand, the loss of significance
of commercial centres in the larger cities to suburban retail warehouses was able to be
curtailed. However, these will also have to hold their own against future developments in
the “greenfield sites”, such as the planned IKEA outside of Magdeburg. Among the six most
important cities in Saxony-Anhalt, only the city centres of Halle an der Saale and Stendal
possess attractive pedestrian areas in emergent commercial areas. Following considerable
war damage, new city centres have emerged in the cities of Magdeburg, Dessau and
Halberstadt, whereby only Magdeburg and Halberstadt can attract numerous customers
from a regional trade area with their above average centrality rankings and attractive
industry mix. On the other hand, in Dessau only the ECE shopping centre dominates
shopping in that city. The Zerbster Strasse pedestrian zone exhibits only moderately attractive
lease occupancy.
Halle an der Saale
The most important retail trade location in Saxony-Anhalt is Halle an der Saale, which can
claim seventh place in the rankings of the most important retail trade locations in the eastern
part of Germany. Halle still exhibits the largest demand for retail space in city areas. The
132

pedestrian area is divided into two very different
sections. The section between Waisenhausring and Markt
is the absolute prime location. The important retailers
have set up shop here (P&C, C&A and H&M). Additionally,
Kaufhof and Wöhrl are also located on the Markt.
Within a short time, a flagship store of the new fashion
retailer, New Yorker, will open at Leipziger Strasse 105.
The structural renovation of the so-called “Ritterhaus”
has not yet reached completion in which H&M has been
repositioned throughout a doubled surface area in
comparison to its former shop. To some extent, despite
positive development beginnings, leases have stagnated
over the last five years. For retail shop space comprising
between 80 and 120 square meters of sales area, a retailer
must currently calculate a lease amount of 70 euros/m2 .
Average shop rents in prime locations
in Halle/Saale for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
The second section of the Kleinschmieden/Grosse Ulrichstrasse pedestrian area slackens off
considerably regarding pedestrian frequency in comparison to the Leipziger Strasse. Here,
the dm drugstore as well as SB-Bäcker have newly opened. The opening of the Fischer fashion
boutique in the “Rolltreppe” shopping centre is noteworthy. Thus, now five important
national department stores are vying for the affections of customers in Halle.
The premises abandoned by dm at Grosse Ulrichstrasse 16 have now been leased by a
supermarket specializing in bio-foods, so that there are no longer any significant vacant
premises in this area of the Grosse Ulrichstrasse. The fear that the “Nova eventis” shopping
mall on the regional state border with Saxony could prove to become a significant impairment
to retailers in Halle an der Saale has proven untrue. Customer polls have shown again and
again that this centre is
frequented mainly not by
customers from Leipzig and
Halle, but by customers
hailing from the rural areas
of Saxony and Saxony-
Anhalt. As a result, the
centre has not been as
successful after the completion
of the 70,000m2 of
retail sales space as investors
and centre management
had hoped. The huge malls
are still rather empty during
the week and most of the
turnover is being generated
Halle an der Saale, Markt 18
at the weekends.
90
80
70
60
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2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany
average Ladenmieten development in Halle an of der Saale
shop rents in Halle/Saale
133

Magdeburg
With a centrality ranking of approximately 129.3,
Magdeburg has the second-strongest attraction for retail
trade following Halberstadt, whereby optimal
transportation connections represent a crucial location
advantage here. 17,000 students at the university and
post-secondary institutions as well as at the numerous
research institutes put their mark on the cityscape and
provide strong demand for fashion, leisureware and
sporting goods. Consequently, in Magdeburg a decline
in vacancies from yet one year ago in the Breiter Weg
shopping area is to be noted.
The expansion of the ECE centre over a retail sales area
of approximately 10,000m2 has, in the respect, affected
the traditional retail situation rather positively. In the
northern section, however, discounters and vacancies dominate. The opening of the socalled
“Marietta-Quartiers” with approximately 7,000m2 of commercial space and vendors
such as Reno, WMF and dm has taken place
and has strengthened the retail situation
in the Breiter Weg. Accordingly, retail
leases have also correspondingly increased
to a positive degree. In the meantime, at
50 euros/m2 average Ladenmieten development in Magdeburg of
shop rents in Magdeburg
Magdeburg has been able to
improve its position from tenth place to
eighth place in the respected rankings of
the most important locations in East
Germany, ahead of Chemnitz and
Schwerin. Within the past five years, rents
for small retail spaces have risen more
Magdeburg, Breiter Weg 23, Marietta-Quartier than 80%.
Dessau
Retail in the third largest city of Dessau continues to be shaped by shopping centres in the
city centre as well as outside of the city. In the place of the former Horten department store
in the Franzstrasse/corner of the Askanische Strasse, a project developer plans the
construction of an additional shopping centre with approximately 12,000m2 in
retail sales space.
Completion of the 28 million euro project is planned for the Summer of 2008 and includes
around 630 parking spaces. With an existing retail sales area of 2.2m2 per inhabitant, it
remains to be seen whether the market is able to sustain these new retail sales areas.
134
Average shop rents in prime locations
in Magdeburg for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany

Nevertheless, the rents level for retail shop areas in the prime location has improved. Over
the past five years, rents for retail spaces in the range of 80 to 120 square meters of sales
area have increased by more than 13% to 25 euros/m2 .
Likewise, in Lutherstadt-Wittenberg a further shopping centre comprising a retail sales
area of approximately 12,000m2 is planned in the immediate vicinity of the Markt, and thus,
into an integrated site. Possibly this shopping centre will trigger the urgently needed
growth spurt for the city centre, because without key shops, retail trade in the city must
compete with difficulty against the specialized continue to retail parks on the “greenfield
sites.” Even though Lutherstadt-Wittenberg possesses an undamaged post-war city centre
containing numerous places of interest and a structurally-pleasing pedestrian area which
attracts numerous tourists as well, retail only plays a secondary role in the city centre.
In the last few years, Halberstadt has undergone amazing development within its city centre.
City reconstruction and repair measures of the waste land areas within the city centre that
resulted from heavy wartime damage have, in the meantime, been concluded. The area
around the Fischmarkt was able to be completely
reconstructed in a striking urban development style. Thus,
customers have embraced the Rathaus-Passagen in
Halberstadt’s core area, the restored town hall as well as
the newly-constructed office buildings as the new attractive
commercial centre, which shines with the highest centrality
ranking of approximately 163, thus exhibiting further large
potential.
In the Altmark, demand is concentrated on the retail
location of Stendal, whose city centre possesses two
medium-sized department stores. The pedestrian area
exhibits a very high number of chain stores and is the
hottest location for such as in Saxony-Anhalt.
Maximum rents in Saxony-Anhalt in 2007
Andreas Albrecht,
Investment
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Dessau 78,360 89.9 131.5 25 15
Halle (Saale) 237,198 89.1 108.3 70 30
Magdeburg 229,126 89.6 129.3 55 30
135

SCHLESWIG-HOLSTEIN
Due to the geo-structural location, the few large cities
of Schleswig-Holstein have generally a far higher
centrality index than the national German average
thanks to either a respectable catchment area or strong
retail tourism, such as for example in Flensburg. Also the
proximity to Hamburg – such as in Neumünster – plays
a role. Only a small portion of this centrality index has
a surplus in significance, i.e. the attractiveness of the
respective city centre. All of the following locations
described in the inner city are fighting against surface
expansion in the peripheral areas. The picture is quite
uniform. According to Gfk GeoMarketing GmbH, inner
cities display as a rule less than 30% of storefront space
in the city centre of overall retail sales spaces.
The efforts of the municipalities to strengthen the city centres are not so clear. Thereby, with
the exertion of all market participants in Flensburg an inner city shopping centre, the
Flensburg Galerie, pushed back the importance of the outlying areas of the town somewhat,
whereas the municipal authorities in Neumünster want categorically to establish a FOC (Full
Operating Capability) on the periphery. This runs the risk of debasing the inherent city centre
area with a recognizable loss of importance that will contain large empty pockets within it.
In Kiel, the Holstenstrasse pedestrian area, in particular, has been fighting for years not
only against the successful collaboration of the inner-city Sophienhof, Holstentörn, now
QuerPassage shopping centres, but also principally against the increased retail warehouse
agglomerations, Kiel-Raisdorf and Citi Park.
Only in the Hanseatic City of Lübeck has the city centre been rediscovered. Such gives support
that the traditional prime locations are developing into customer magnets by revitalization.
Unfortunately the Schleswig Higher Administrative Court (Oberwaltungsgericht Schleswig)
rejected a complaint against the establishment of the furniture house, Dodenhof, which
now only Genin-Süd can invest approximately 50 million euro into a furniture retail store
with approximately 50,000m2 of sales space. This could, to all intents and purposes, disrupt
the continued growth of the city centre.
Flensburg
Flensburg is Germany’s northernmost city and lies directly on the Danish border. With a
centrality index of 167.9, Flensburg is positioned far in front amongst German cities. This
is also because of the fact Flensburg is very popular as a shopping city with Danes living
around the border region. Two important highlights have recently shaped the retail trade
136
Average shop rents in prime locations
in Schleswig-Holstein for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
100
90
80
70
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents in in Schleswig-Holstein

landscape. On the one hand, the Flensburg-Galerie has opened. On the other, the first PACTproject
in Schleswig-Holstein has been concluded. Flensburg real estate owners in the Holm
and Grosse Strasse are investing approximately 4 million euros together with the city in the
development of the pedestrian area, in lighting systems and benches. With this PACT the
owners want to modernize and effectively improve the positioning of the pedestrian area.
Flensburg, Südermarkt, Flensburg Galerie
The newly opened Flensburg-Galerie
containing approximately 70 shops spread
out over 20,000m2 and with more than
250 underground parking spaces has its
main entrance adjacent to the Holm am
Südermarkt pedestrian area and a side
entrance on the Angelburger Strasse.
Sinnerup, the Danish lifestyle department
store with its first branch store in Germany
and Saturn, the electronics retailer, were
able to be secured as anchorr tenants.
The Holm remains the prime shopping
street, because the Flensburg Galerie did not develop into a competitor of the pedestrian
area with its retail store structure. C&T Development’s commitment has, in fact, led to an
extension of offers on choice in the city centre of Flensburg in contrast to those of the outlying
areas. This must be assessed positively, since the smaller surrounding towns have likewise
upgraded their retail sector.
The Holm is still the most requested area for chain retailers. Gerry Weber and Christ,
amongst others, have newly set up shop. Up to now, the Grosse Strasse was unable to assert
itself as a shopping street, and it remains to be seen whether PACT investments will change
something about this situation. It is, however, to be assumed only the modernization of
the Karstadt Department Store in the rear part of the retail section will once again improve
the Grosse Strasse as a shopping area.
Kiel
The pedestrian zone in Kiel is one of the
oldest in the whole of Germany. In the
1950’s, as a shopping street, the Holstenstrasse
was considered modern and
innovative. Unfortunately, Holstenstrasse
has not necessarily developed positively
since that time. Indeed, the Sophienhof
strengthened the city centre, but the
retail districs of Holstenstrasse, however,
was unable to benefit from such. With
Kiel, Holstenstrasse 21–27, Shopping centre Leik
CENTRUM: Project developer/owner
COMFORT: Consulting, Letting
137

the reopening of QuerPassage (formerly Kleiner Herzog) with the anchor tenant, C&A, the
attractiveness of Holstenstrasse has not improved and, in addition, must compete with strong
retail store arrivals in the outskirts.
In addition, real estate owners in Holstenstrasse have invested too little in their store spaces
over the past few years. The introduction of a PACT is aimed at visually improving
Holstenstrasse. The strongest section of Holstenstrasse
lies between Berliner Platz and Schevenbrücke. This
section still benefits from the Sophienhof and
QuerPassage. The rear section between Berliner Platz
Average shop rents in prime locations
in Kiel for shop locations with
and the Alter Markt is declining due to the high capital
retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
expenditure holdup at Karstadt and the poorly
120
performing Leik. With a re-positioning of Karstadt and
110
100
Leik, there would be an opportunity to implement the
90
80
successful “dumbbell principle” in Holstenstrasse. On
70
60
the one side, there would be Sophienhof and
50
QuerPassage, and on the other side, an efficient Karstadt
40
30
department store would act as a magnet. The entire
20
10
Holstenstrasse could profit by such if the real estate
0
2002 2003 2004 2005 2006 2007
owners would invest in their own properties in the
durchschnittliche average development Entwicklung of der
context of a PACT. In all probability, the presently
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Kiel of
stagnating rents in this area would once again increase.
shop rents in Kiel
Neumünster
With more than 78,000 inhabitants, Neumünster is the fourth largest city in Schleswig-
Holstein and generates a centrality index ranking of 149.3. The retail district in Neumünster
is located at Grossflecken and Kuhberg. The name Grossflecken describes its topographical
characteristics. The road is a large, round and unclear location, where, in addition, the sides
of the street are separated from each other by heavy car traffic. This substantially impedes
the exchange of pedestrian flow.
The area most in demand from retailers lies between Karstadt and Mühlen-
Lütjenstrasse/Holstenstrasse. However, in Neumünster the demand of national retailers for
retail space remains low. Many well-known chain retailers one frequently sees in cities of
this size are lacking in Neumünster. The reason is to be found in the fact Neumünster cannot
manage to direct the streams of pedestrians into the city centre on account of the very
strong Nortex fashion centre on the outskirts of town and the poor visit quality in the
pedestrian areas.
Retail trade in Neumünster’s city centre will suffer even more when a 20,000m2 McArthur
Glen/Michel Objektbau Designer Outlet Center (the “DOC”) opens on the outskirts of town.
If successful, an option for an additional 10,000m2 already exists. Thereby, the city expects
to gain more purchasing power from the surrounding area and to offer competition to the
138

strong Dodenhof warehouse department store in Kaltenkirchen, which would like to
increase its retail space by 9,000m2 .
The neighbouring boroughs around Neumünster have spoken out against the DOC. They
are trying to thwart the plan at provincial state government level. In addition, for the
Neumünster city centre the DOC will offer no enrichment, since many chain retailers will
not want to expose themselves to price competition with the DOC, and will continue forego
Neumünster. As a consequence, rents will fall and the blocking of investment will increase.
Lübeck
Over the past few years Lübeck has had the best development in terms of stabilization and
increased attractiveness of its city centre. According to BBE GeoMarketing GmbH, the retail
trade centrality index was still at 136 in 2003. In 2007 it was at 145.7. This increase makes
clear that the city centre has posted gains not only because of its touristic flair, but also,
and most importantly, because of the drawing power attained improved configuration of
modern, contemporary retail trade-oriented use concepts.
The arrival of Peek & Cloppenburg directly on the Markt in the Spring of 2005 has boosted
the attitude of the downtown retail industry to the location of Lübeck and revived public
interest in it. The presence of Peek & Cloppenburg has not only led to a considerable
improvement of the retail spaces in the Kohlmarkt and Holstenstrasse areas, but also , on account
Lübeck, Project study Breite Strasse 36–42, s. Oliver
CENTRUM: Project development
COMFORT: Investment, Consulting, Letting
139

of increased pressure of demand, it has strengthened the
prime location, Breite Strasse, even more.
In the last five years alone COMFORT Hamburg GmbH
in cooperation with CENTRUM Grundstücksgesellschaft
mbH has carried out five project developments with a
project volume of approximately 90 million euros in
Lübeck. In so doing, no less than 16,500m2 in sales area
have been developed. Apart from to the abovementioned
Peek & Cloppenburg store located at Markt
1, the following developments are in cluded: the
commercial buildings at Breite Strasse 39-43 with Zara,
Woolworth and Buddelei as tenants, at Breite Strasse 47-
53 with tenants Hennes & Mauritz, Ihr Platz and Roland
Schuhe as well as at Breite Strasse 37 with the
internationally operating Danish fashion retailer,
Bestseller, which offers its Vero Moda and Jack & Jones
lines on a sales area of 900m2 .
The Düsseldorf CENTRUM Grundstücksgesellschaft in cooperation with COMFORT Hamburg
has now acquired both commercial buildings located at Breite Strasse 36-40/Beckergrube
1-3 and Breite Strasse 42 in the historical city centre of the Hanseatic City of Lübeck, the
goal being to place a further urban development style on this prominent site. In order to
find an optimal solution between functionality and economics, on the one hand, and an
appropriate architectural response in the historical context, on the other hand, a competition
was held with six architectural firms taking part. The central section in the historic old city
centre, which due to its exemplary character for the Hanseatic “Städtefamilie” (family of
towns) in the Baltic Sea area has been recognized since 1987 in its entirety as a UNESCO
world heritage cultural site, and thus benefits from special protection, demands high
qualitative requirements concerning urban construction and architectural design.
The design by the Berlin office of Grüntuch & Ernst emerged as the winner of the competition.
The preliminary drafts of the authorized agent for the design, the architectural firm of Heiko
Vahjen from Braunschweig, envisage the new development of a modern inner-city
commercial building instead of a postwar building from the past. From the point of view
of all those involved and from a political standpoint, the planned construction offers the
chance to further strengthen the historic city centre of Lübeck unequivocally in its position
as the regional metropolis.
The project development which COMFORT Hamburg initiated is practically fully rented. A
modern commercial building has been created for three main tenants and offers more than
3,800m2 of rental space on the property of the building used formerly by the Landesbank.
Future tenants include the fashion retail chain, s. Oliver, as well as a further internationally
successful fashion company and a high-quality food retailer. Building work should begin
by mid-November 2007. Completion could already be carried out by the Autumn of 2008.
140
Average shop rents in prime locations
in Lübeck for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
110
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2002 2003 2004 2005 2006 2007
average durchschnittliche development Entwicklung of der
shop Ladenmieten rents throughout in Deutschland Germany
average Ladenmieten development in Lübeck of
shop rents in Lübeck

The project volume in the Hanseatic city amounts to approximately 23 million euros.
Demand in the Hanseatic City of Lübeck has constantly increased over the past few years
due to this collective commitment in spite of the fact there were already several successful
retail trade developments in Lübeck and directly because of such. Since successful retailers
gladly set up shop in Lübeck, where others already enjoyed success before them, this section
of Breite Strasse developed as the absolute prime location. The former Haerder property
estate, today the Haerder shopping centre from building developer, Tenkhoff, from Berlin,
could now act as an alternative to this development. Approximately 12,000m2 of retail trade
space has emerged, which bearing in mind its total
configuration and the quality of its location, is demanding
large efforts on the part of the landlord. The city is already
carrying out preparatory work in order to promote this area
as well. The Wahmstrasse is being rejuvenated and the
pavement of Breite Strasse is being joined to the Sandstrasse
in order to broaden the pedestrian area of the Sandstrasse
and make it more attractive.
A further task now is to develop this prime location further
in the direction of Holstentor. Due to the demand situation
this seems possible and the realization thereof should not
be put at risk by listening to the vociferous proponents in
favour of extending the area.
Maximum rents in Schleswig-Holstein in 2007
Jan Philipp Rausch,
Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Elmshorn 48,331 102.0 131.1 35 18
Flensburg 86,080 94.9 167.9 76 40
Kiel 234,433 94.9 147.7 90 50
Lübeck 211,825 95.4 145.7 100 55
Neumünster 78,072 95.7 149.9 36 15
141

THURINGIA
Thuringia is on the right track in tying up its tradition
Average shop rents in prime locations
as a high performance economic location in the centre
in Thuringia for shop locations
with retail sales area of 80–120 square meters
of Germany and Europe. Economic development is being
in comparison to the average development
of shop rents in Germany
carried out by a multitude of high performance medium-
70
sized companies as much as by both domestic and foreign
60
investors. Even if economic growth has slowed down
50
over the last year, the development of competitive
40
economic structures continues uninterrupted. Today, a
30
broadly diversified industry, which ranges from food
20
production to the automobile industry through to high
10
technology industries, such as biotechnology and
0
2002 2003 2004 2005 2006 2007
optoelectronics, denotes the economic situation in
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents throughout in Deutschland Germany
Thuringia. Likewise belonging thereto is an efficient
small trade sector as well as a macro-economy, retail
trade and a service industry economy. Thus, the economic
durchschnittliche average development Entwicklung of der
Ladenmieten shop rents in in Thuringia
Thüringen
structural change in Thuringia has progressed far, but is not yet complete. The average
unemployment rate throughout Thuringia is 15.3%. It is the lowest unemployment rate in
East Germany. The larger cities of Erfurt, Jena, Eisenach, Gera, Weimar and Suhl/Zella-
Mehlas along the A4 and A71 autobahn but also medium-sized cities, such as Gotha and
Ilmenau, provide fertile ground for the sustained economic upswing.
Certainly there are also problems in Thuringia, with which almost all East German regions
have to contend: a decline in birthrates, still above average high unemployment rates in
relation to national German averages and the emigration of the younger population.
Thuringia is the smallest of the five new Länder of the Federal Republic of Germany, but
it ranks 12th with approximately 2.34 million inhabitants in national population comparisons.
In the course of demographic changes, the population will decrease 9.2% between 2004-
2020 on a regional averages. In cities such as Erfurt, Jena and Weimar, population decrease
is substantially lower or compensated by a higher centrality index. Retail trade will have
to adjust itself to these decreasing circumstances, and due to the age pyramid, also to
modified target groups.
Initially, careful handling appears fundamentally necessary in the expansion of retail trade
area bearing in mind the retail sales area per head, which is high in comparison to the
national German average, with, simultaneously, a lower purchasing power per head (14,400
euros; 14th place on a national average).
Erfurt
The developments in the regional state capital of Erfurt are of national significance. Erfurt,
with approximately 200,000 inhabitants, is the largest city in Thuringia. The Anger,
142

Bahnhofstrasse and Schlösserstrasse pedestrian area are
continuously undergoing further development as a focal
point for urban retail trade. The Anger retail location
can still be considered the absolute prime area and is,
accordingly, heavily sought after.
In the meantime, numerous redevelopment and
40
modernization measures have been completed in the
30
city. In order to emphasize retail trade, there is the
20
10
completion of construction in the former “Hauptpost”
0
in the Anger, into which the investor poured
2002 2003 2004 2005 2006 2007
durchschnittliche average development Entwicklung of der
approximately 40 million euros into the upgrading and
Ladenmieten shop rents throughout in Deutschland Germany
Ladenmieten average development in Erfurt of
remodelling of the office and retail spaces. A further
shop rents in Erfurt
project was undertaken in the Anger, where, in the
meantime, Benetton and Zara have opened branch stores. Erfurt’s city centre may receive
a further boost with the forthcoming completion of the Erfurt Hof located in the forecourt
of the train station at the corner of
Bahnhofstrasse. Here approximately 14.3
million euros were invested in renovating
the area.
Erfurt, Anger 55–56, Esprit/Mexx
Gera
Average shop rents in prime locations
in Erfurt for shop locations
with retail sales area of 80–120 square meters
in comparison to the average development
of shop rents in Germany
In the Anger, owners of shops with a
surface area of 80-120m2 obtain an
average maximum rent of 80 euros/m2 per
month. For larger spaces between 300-
500m2 , top rents of 45 euros/m2 are paid.
In comparison to the previous year,
rental prices increased once more by
approximately 7%.
After Erfurt, Gera is the second largest city in Thuringia. Building projects such as the
“Gera-Arcaden,” “Amthorpassage” and the “Elsterforum” shopping centre in the city
centre strengthen the role of the city as a regional metropolis. However, these new centres
have visibly left a negative impact on the main shopping street. The shopping street is only
beginning little by little to develop positivly once more. However, from the Humboldtstrasse,
the Sorge pedestrian area still exhibits numerous vacancies.
Rents for shop premises measuring from 80–120m2 are about 35 euros/m2 . For larger spaces
between 300-500m2 top rents of up to 20 euros/m2 are paid. In relation to the previous year,
rents have once again increased more than 9%. With approximately 100,000 inhabitants,
Jena is the third largest city in Thuringia after Erfurt and Gera. It maintains its profile as a
dynamic and young high-tech location. Jena is simultaneously in great demand as a venue
90
80
70
60
50
143

for retail chains. If anything, prime retail space is rather limited. These spaces extend from
around the Markt and down the Löbderstrasse as well as in both the “Goethe-Galerie” and
“Neue Mitte Jena” shopping centres. In addition to the Intershop-Tower and the former
Hauptpost, the construction and use of the Eichplatz is also in the developmental phase.
Rents for a shop measuring 80–120m2 run around 45 euros/m2 . For larger spaces between
300–500m2 , top rents of up to 25 euros/m2 . In comparison to the previous year, rents have
remained largely unchanged.
The independent city of Suhl, profits from its proximity to Bavaria. A multitude of commuters
provides for lower unemployment and increased purchasing power in comparison to East
Germany. As a medium-sized town with cosmopolitan facilities and a good traffic
infrastructure, Suhl is a successful example of a regional economic policy that is working.
In Steinweg, in Suhl’s city centre area, a shopping centre with 10,000m2 of retail space will
be completed by the Spring of 2008. The investment volume amounts to 25 million euros.
COMFORT is advising the investor on letting.
The city centre of Weimar has not yet completely mastered the new development and
opening of the “Weimar Atrium” shopping centre with 13,000m2 of additional retail sales
space. This city of 62,000 inhabitants lives off of its national importance and tourism.
Particularly in the adjoining
areas of this city of Goethe and
Schiller, numerous business
premises still stand vacant.
On the other hand, the
Schillerstrasse/Wielandstrasse
pedestrian area is registering
a high number of chain store
establishments.
144
Maximum rents in Thuringia in 2007
Kristina Städter,
Investment, City Parking
Andreas Lösche,
Authorised signatory/Letting
TOP-CITY Inhabitants PP CP 80–120 m² [€ /m²] 300–500 m² [€ /m²]
Erfurt 202,844 91.7 115.8 80 45
Gera 103,948 89.0 139.7 35 20
Jena 102,532 92.8 118.7 45 25