TOM 07 2024 final

T
TOPS
M
OF THE MONTH
TOMO
RETAIL REAL ESTATE
TOPS
OF THE
MONTH
Essential News About The Players In In
The Retail Real Property Estate Market In in Germany
THE HOTTEST DEALS +++
INTERVIEWS +++ STATEMENTS
+++ PARTICULARS +++
ANALYSES +++ PROJECTS
presented by HI-HEUTE.DE
July 2024
There are also hardly any new project developments on the retail market.
Anything but a trend reversal
for project developments
Total volume down 6.8 percent in the first half of the year
The downturn has leveled off,
but the latest trends such as
project delays, a low number
of construction starts and project
developer insolvencies remain.
This is shown by the latest
analysis of around 21,000
projects under construction,
in planning or completed
between 2021 and 2028. According
to bulwiengesa‘s“Development
Monitor“tool, the
total project area across Germany
will decrease by 6.8%.
The office segment is the most
affected (-9.7%), logistics space
the least (-3.3%). The decline
was -9.2 percent in the residential
segment, -3.6 percent in the
retail segment and -8.2 percent
in the hotel segment. The total
volume amounts to around 173
million square meters. Almost
every fourth squ-are meter is
developed in one of the seven
A-cities.
Felix Embacher MRICS, Chief
Representative at bulwiengesa:
„It is still too early to declare
a turnaround. The project development
market is still idle.
Particularly problematic is the
withdrawal of project developers
from the A-cities in residential
construction - in other
words, precisely where new
construction should alleviate
the tense housing situation.
Project areas there are falling
by ele-ven percent. Rents will
continue to rise.“ Iris Dilger,
Managing Director of DIE
WOHNKOMPA-NIE and panelist
in the webinar to present the
market report, is at least slightly
optimistic: „There are signs
of a slight upturn in sales. However,
the regions in Germany
are responding differently. The
Rhine-Main region is still very
weak at the moment.“
The crisis on the project development
market is most evident
when looking at construction
starts and delays. In the view
of many project developers, the
conditions for being able to market
projects later are not in place
in the current market situation -
lower demand is offset by high
financing costs. There are also
still too few opportunities for
institutional investors. Pricing
is still difficult. The banks‘ presales
requirements are making it
difficult to start projects in the
property develop-ment business.
Francesco Fedele, CEO
of BF.direkt AG, comments:
„The financing of project de-velopments
remains challenging.
Insolvencies and restructurings
are a dominant theme in the
mar-ket. New financing is characterized
by rising margins and
falling loan-to-costs (LTC). This
value describes the ratio of the
loan to the total costs of a project.
For example, the LTC for
new-build apartments has fallen
Symbolic image: Adobe Stock
from around 80% in mid-2022
to around 70% in the second
quarter of 2024. As the wave of
insolvencies continues, we do
not expect the financing climate
for project develop-ments to improve
in the short term.“
At 4.7 million square meters,
the first half of 2024 saw a sharp
decline in construction starts
(-52% compared to previous
years). The slump is particularly
dramatic in the C cities, where
the decline is 67% compared to
2021 to 2023. In the A cities, the
decline is still the smallest at
45%. Logistics is also the most
stable asset class here (-26.5%).
The start of construction was
delayed by at least one quarter,
accounting for 28% of the total
project development volume.
Developers of hotel and retail
space are particularly hesitant
here. However, the following
applies: the better the location,
the less delayed a project is.

Page 2 T O M
Aengevelt (Dusseldorf) has
analyzed several trends that
suggest that districts will become
even more important
as an asset class. In contrast,
the urban development concept
of functional separation
has proved to be a mistake.
Accordingly, since the 1990s,
project developments have
increasingly aimed to create
intelligently mixed neighborhoods
in line with demand
instead of concentrating on
brittle solitary buildings.
DEVELOPMENTS
Positive prospects for
the neighborhood asset class
Synergies between types of use offer many advantages
July 2024
Neighborhoods are urban ensembles
consisting of several
buildings that are linked by
internal development, shared
infrastructure, interactions between
uses and a brand-forming
identity. A mixture of residential,
retail, service, gastronomy,
commercial, often also social,
educational, health, cultural and
leisure uses is typical. Neighborhoods
often have a focal
point, such as a square around
which retail, restaurants and
services are grouped to attract
footfall. The different types of
use in the district benefit from
synergies such as shared infrastructure
and short distances.
The urban design with recognizable
external boundaries and a
common architectural language
usually also contribute to the
identity of the district.
Neighborhoods can grow naturally
or be deliberately planned.
Project developments that not
only create individual buildings
but also sophisticated districts
have been around for thousands
of years. Hippodamus of Miletus
was already planning urban
quarters in the fifth century BC.
The Dutch Quarter in Potsdam is
an example from the 18th century,
and from the end of the 19th
century, major companies from
the chemical (Henkel, Hoechst,
Bayer), coal and steel (Krupp,
Thyssen), electrical (Siemens)
and automotive (Volkswagen)
industries in particular created
urban and architecturally designed
districts with housing
and social infrastructure around
their industrial plants in order
to settle their workers and their
The Deiker Höfe in Düsseldorf is a showcase project for district development.
Visualization: caspar / BM + P Architekten, Koncept
families there. In contrast, Le
Corbusier‘s concept of functional
separation, on the basis of
which the sterile large housing
estates of the 1960s and 1970s
were built, is regarded as an
urban planning mistake. Since
the 1990s in particular, however,
urban neighborhoods have
become an asset class that is enjoying
growing popularity. Corestate
and Bulwiengesa have
identified 616 neighborhoods
across Germany where construction
began between 2009
and 2025 - in fact, the actual
number is even higher.
Aengevelt differentiates between
different types of districts:
those with a focus on residential
use as well as additions with retail,
gastronomy and commerce
- the most common type - or districts
with a focus on office use
as well as additions with gastronomy,
hotels and residential
use. Furthermore, commercially
dominated districts with a special
focus, such as research and
science parks, then city districts
with a focus on typical inner-city
uses such as retail, gastronomy,
culture, education as well
as hotels, offices and housing
or districts with a special leisure
aspect such as marinas.
Showcase project Deiker Höfe
The Deiker Höfe in Düsseldorf,
which is currently under construction,
is a prime example of a
mixed-use district. Six buildings
with a total of 353 apartments,
15,000 square meters of office
space, 3,600 square meters of
retail and gastronomy, a hotel
with 137 rooms, a daycare centre
with 55 places and a network
of charging stations for e-mobility,
grouped as an ensemble
around shared courtyards, are
creating a district with its own
identity, synergies between the
uses and extremely short distances,
which shrink the Mayor of
Paris‘ goal of reducing walking
and cycling distances from a
maximum of 15 minutes to five
minutes in real terms.
Vertical districts, i.e. high-rise
buildings that integrate different
uses in the same building,
represent a special form of district.
For example, Aengevelt
has developed a sophisticated
conversion and subsequent use
concept for the former Düsseldorf
main post office, which has
since been realized by a renowned
pension fund and, following
restructuring, is now fully let on
a long-term basis and houses retail,
restaurants, a theater, Düsseldorf‘s
central library with
1.2 million visitors a year and
rising, as well as office use and
a multi-storey parking lot.
According to Aengevelt, the
neighborhood asset class is benefiting
from several trends.
New lifestyles have increased
interest in urban forms of living
with short distances to
restaurants, retail and services.
Corresponding urban mobility
concepts can be realized in particular
through mixed use and
internal development. In view
of the shortage of skilled workers,
employers can score points
by offering employees attractive
housing in the immediate vicinity
of their workplaces. The
integration of social infrastructure
such as daycare centers or
educational facilities improves
the scoring for the ESG criterion
„Social“ and increases the
acceptance of project developments
by authorities and political
bodies. In addition, innovative
energy and mobility concepts
can often be implemented more
efficiently at district level than
in individual buildings. From
an investor‘s point of view, the
mix of uses enables a more balanced
spread of risk and thus
also improves the ability to use
the property for third parties, as
future changes of use are easier
to implement.
Dr. Wulff Aengevelt, Managing
Partner of Aengevelt Immobilien:
„Intelligent, needs-appropriate
districts represent a
sophisticated asset class that is
in line with future trends. They
offer investors opportunities,
increase quality for all tenant
groups and contribute to the development
of urbanity. Thanks
to the synergies between the various
uses, economic, social and
ecological goals can be achieved
simultaneously, largely without
conflict. Neighborhoods
are therefore an important component
of future-oriented urban
development.“

Page 3 T O M
TOP STATEMENT OF THE MONTH July 2024
TOP STATEMENT
July
„On the one hand,
shopping centers need
fundamental changes,
but on the other hand
they also need continuous
good management.
It also depends
on the specifics of
each individual location.
Overall, we are
seeing more mixed
use than in the past.
Some locations require
radical measures,
such as the conversion
of an entire level.“
Jörg-Michael Zimmermann,
Managing Director of Multi
Germany in an interview with
TOM – Tops Of The Month

Page 5 T O M
ANALYSES July 2024
Retail investments perform best
BNP Paribas: Still at the top of the ranking of the most important property types
Two important trends can be
derived from the transaction
volume on the retail investment
market at mid-year.
On the one hand, the overall
result for the first six months
was a good EUR 3.6 billion, up
on the previous year (+92%)
but below the long-term average
(-6%). Although this
reflects the noticeable improvement
in market sentiment
in the middle of the year, the
average volumes of the past
ten years are not yet achievable.
On the other hand, retail
investments were able to
defend their leading position
in the asset class comparison,
which they already held after
the first quarter, in the halfyear
results as well. This is the
result of an analysis by BNP
Paribas Real Estate.
With a market share of 30%,
they continue to lead the ranking
of the most important property
types, ahead of logistics
properties (around 2.8 billion;
23% share) and office properties
(2.2 billion; 18% share).
„It is pleasing to note that retail
investments not only registered
the highest market momentum
due to major sales drivers, but
also reported the most sales,
which is an indication of the retail
segment‘s good competitive
positioning compared to other
asset classes,“ explains Christoph
Scharf, Managing Director
of BNP Paribas Real Estate
GmbH and Head of Retail Services.
In view of the fact that department
stores account for 39% and
commercial properties for 37%
of the market, the high street
segment in particular stands out
in terms of the distribution of
turnover by property type.
In the department store sector,
the sale of KaDeWe to the Central
Group and RFR‘s majority
takeover of seven Galeria properties
should be mentioned
first and foremost. In the commercial
property sector, the major
deals of Fünf Höfe and Maximilianstrasse
12-14 in Munich
are worth mentioning alongside
many smaller ones. As the third
important pillar, the retail park
segment also has a substantial
market share of 23%.
Christoph Scharf
In the top markets, the retail investment
volume continues to
be closely linked to individual
major transactions in the threedigit
million range. Accordingly,
only Berlin (just under 1.1
billion) and Munich (around 1
billion) were able to generate
high volumes through the aforementioned
deals for KaDeWe in
Berlin and Fünf Höfe and Maximilianstrasse
12-14 in Munich.
In addition to these turnover
drivers, smaller office and department
store deals as well as
food transactions are repeatedly
recorded in the A cities, which
only have a minor impact on total
turnover. In total, the A-locations
accounted for around €2.4
billion (67% pro rata) in the first
half of the year.
There were no further adjustments
to the net prime yields in
the first six months. This puts
the seven A-locations in a range
between 3.45% and 3.95%. Meanwhile,
retail parks are quoted
at 4.75 %, individual food retailers
at 4.90 %, shopping centers
at 5.60 % and DIY stores at 5.70
%.
„The retail investment market
can look back on a satisfactory
first half of the year, in which
it took the lead among the asset
classes, was able to report individual
major transactions and
no further price declines were
observed in the premium segment
for the time being. It is a
pleasing sign that high-street investments
are making a decisive
contribution to the positive market
development,“ adds Christoph
Scharf.
The portfolio segment, which
is currently still underrepresented
with a share of just under
15%, is expected to pick up noticeably
in the coming quarters.
Package sales with a focus on
the food sector will remain the
focus of demand. As a result, it
can be assumed that investment
activities in the specialist retail
sector, which has accounted for
around half of market activity
on average over the last ten years
(H1 2024: 23%), will gain
significant market share in the
second half of the year. In the
development of prime yields,
the trend is consolidating that
the price adjustment processes
have now noticeably lost momentum.
From today‘s perspective,
no further increases in yields
are expected in the second
half of the year. Against the
backdrop of the general conditions
outlined above, it is likely
Photo: BNP Paribas Real Estate
that retail investment turnover
will also be higher at the end of
the year than in 2023 (around
5 billion). However, the longterm
average (just under 11.5
billion) is unlikely to be achieved
in the current year without
special factors, which are not
currently on the horizon.
T
TOPS
O M
OF THE MONTH
TOM
TOPS
OPS F THE ONTH
OF THE
RETAIL REAL ESTATE
Essential News About The Players In In
The Retail Real Property Estate Market In in Germany
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Page 7 T O M
RETAIL July 2024
Retailers support city center activities on a broad front, for example city festivals.
Symbolic image: Pixabay / Marlene Bitzer
German Retail Association expects
a significant upturn in consumption
Retailers invest around one billion a year in city centers
Despite the rather bleak situation
in the retail sector in
many places at the moment,
the German Retail Association
(HDE) is sticking to its
sales forecast for 2024. According
to a recent HDE survey
of 800 retail companies, 42%
expect sales to stagnate in the
second half of the year and
36% expect them to decline
compared to the same period
last year.
The retail association warns
against the further desolation of
city centers in view of further
business closures. At the same
time, the association emphasizes
the high social importance
of the sector and its great commitment
to sports clubs, city
festivals and many other social
causes.
The weak development of private
consumption in the first
few months of the year gives
the retail sector little scope for
major sales growth. In the first
four months, sales were below
the HDE forecast for the year as
a whole.
Hardly any scope
for growth
However, the HDE expects
consumption to pick up significantly
over the course of the
year and is therefore sticking
to its forecast of nominal sales
growth of 3.5% compared to the
previous year. In line with the
difficult conditions, the current
HDE survey shows that almost
half of the sector expects sales
to be below the previous year‘s
level.
In view of the often challenging
situation, the HDE estimates
that 5,000 stores will close their
doors for good this year. „We
must not get used to this negative
development, as entire city
centers will become deserted as
a result,“ says HDE President
Alexander von Preen. A look
at the sector‘s social commitment
shows just how important
it is for society as a whole that
retail companies do not disappear
from the market en masse.
According to the latest HDE
survey, around 80 percent of retailers
are also involved outside
their companies - for example
in clubs, festivals or sporting
events.
Social
commitment
On average, this amounts to
150 hours and 8,000 euros per
year. If you extrapolate this to
the entire industry, the HDE estimates
the public welfare commitment
of retailers in Germany
at around one billion euros per
year.
Depreciation
program called for
Von Preen: „In order to achieve
a real revitalization of city centres,
more investment in new
stores and the modernization of
existing stores is needed. A special
program for write-downs
on investments in city centres
can provide a decisive impetus
for the future of city centers.“
There was already very good
experience with an investment
program in the early 1990s. The
cities could steer investments to
the right locations with a specific
zoning and set the right
incentives for companies to invest.
This would not only help
to preserve multifunctional city
centers, but would also secure
jobs.

Page 9 T O M
INTERVIEW July 2024
Of building sins, guiding ideas
and a holistic design process
Retail design of the future: exclusive discussion with Schwitzke managing directors
Klaus and Karl Schwitzke
are among the best-known
architects and designers in
the German retail real estate
sector. As joint managing directors,
they are responsible
for the further development of
the entire Schwitzke Group,
which is headquartered in
Düsseldorf. The group creates
brand personalities, builds
vibrant districts and urban
meeting places: from analog
or digital stores to shopping
centers, from offices to restaurants
or hotels.The group
of companies manages the
entire process - from strategic
consulting to professional conversion
and expansion. The
company also has an international
presence with its own
offices in several countries.
TOM editor-in-chief Thorsten
Müller visited the two and
Karl Schwitzke‘s son Lukas,
who is responsible for brand
development, at the headquarters
in Düsseldorf and
conducted a journalistic interview
with the trio.
TOM: As we discussed in detail
in our latest book, city
centers are undergoing a major
transformation process.
What is particularly important
here from an architectural
point of view? Where have
mistakes been made and what
does it need to look like if it is
to be successful?
space due to changes in consumer
behavior, landlords and, of
course, the cities will have to
react.
Karl Schwitzke: I think that cities
today have to take a much
closer look at what they want
to provide for their citizens.
A larger city certainly needs a
compact and attractive center
with a diverse range of products
and additional district centers
with local supplier qualities and
a niche offering.
Smaller towns should concentrate
on supplying their citizens.
There are a whole range of
brands or retailers that do excellent
business in smaller towns
in particular. Not every town
has to look the same and have
an identical offering.
Klaus Schwitzke: The quality
of stay that a city or a district offers
is of central importance for
the success of a city. To achieve
this, it is important to rethink
the use of public space. We need
a lot more greenery in our cities,
if only to keep the climate pleasant.
But we also need enough
restaurants and a diverse cultural
offering.
Karl Schwitzke: We often see
cities investing a lot of money in
their city centers, but neglecting
the districts. But it is often the
city districts that are very vital
and successful. The people who
live here feel very connected to
their neighborhood. It is very
easy to support this connection
with appropriate events or cultural
offerings. This connection
can also be supported with welldesigned
public spaces where
people can meet and spend time.
Even if this means restricting
stationary traffic somewhat.
TOM: What consequences
does this transformation process
have on your daily work?
Karl Schwitzke: We have our
origins in the development of
retail formats for fashion brands
and large chain stores. So we
have always been involved in
retail and know most cities very
well. Due to current developments,
we are increasingly being
called in when a retail space no
longer works and needs to be
restructured. This means that
we now not only deal with the
retail space, but with the entire
property, with the aim of developing
a utilization concept
that enables the owner to work
with the property economically
again. Of course, this also changes
the way we work. Construction
in existing buildings,
revitalization, conversions and
extensions through to building
construction measures are part
of our daily practice.
Klaus Schwitzke: However,
this also means that we are not
only planning retail space for
different sectors, but also restaurants,
hotels, offices, doctors‘
surgeries, etc. Our work
has become much more diverse.
Our work has become much
more diverse, of course also due
to our expansion abroad.
Lukas Schwitzke: In contrast
to a traditional architect, who is
primarily concerned with how
a property can be used to the
maximum and, of course, designing
the external appearance
of a building, the communicative
quality of a building is of
crucial importance to us. Only
a building that achieves social
and cultural relevance through a
defined story and makes a contribution
to urban society will
be economically successful in
the long term.
TOM: How have you structured
the content of your evergrowing
company?
Klaus Schwitzke: Well, a com-
Karl Schwitzke: Due to the
high demand from many brands
for retail space, we have created
far too much retail space in
our cities over the last 25 years.
Unfortunately, the effects on the
existing retail landscape have
not been sufficiently examined.
Cities such as Essen, Dortmund,
Kaiserslautern and Düsseldorf
are now having to come to
terms with the mistakes of the
past. Even inner-city shopping
centers are now often proving to
be detrimental to the shopping
streets.
Klaus Schwitzke: If the brands
that were responsible for the
boom are now reducing their
Various districts in Kiel‘s city center are to be developed and positioned. The Schwitzke Group is supporting
the team around the investor with the development and revitalization of the upper Holstenstrasse,
including the Nordlicht Center, which is to receive an attractive tenant mix and become a destination
at the boat harbour.
Visualizations: Schwitzke & Partner

Page 10 T O M
INTERVIEW July 2024
After the interview (from left): Thorsten Müller (TOM), Lukas, Karl and Klaus Schwitzke (all Schwitzke & Partner).
pany with around 200 employees
is still quite manageable.
Essentially, we have three building
blocks, each with its own
range of services. Firstly, there
is the planning office, which we
started with in 1989. We later
founded our construction company
to simplify construction
in Europe for our international
customers. Next came our brand
agency, with which we initially
pursued classic branding,
followed by in-store communication
for our retail customers.
The largest field of activity for
this agency has now become
signaling, customer guidance
systems and real estate branding.
In addition to these three
main areas, we have offices in
Düsseldorf, Berlin, Munich and
Krakow. We are currently moving
our Dubai office to Riyadh
in Saudi Arabia.
TOM: You‘ve already talked a
lot about two of the building
blocks, what about marketing?
Has a lot changed here
too?
Lukas Schwitzke: Yes, of
course. There is an increasing
awareness of how important
it is to think about your own
positioning and your own unique
position in the competitive
environment. This applies not
only to larger buildings such as
shopping centers or office buildings,
but also to cities and their
districts. As communication designers,
we can help to develop
a coherent overall concept before
architects start designing
buildings.
Karl Schwitzke: There is often
a lack of a central idea or story
that functions like an umbrella
brand and enables users or
guests to connect emotionally
with the location. We have two
excellent examples here in Düsseldorf:
the Kö as the epitome
of luxury shopping and the Altstadt
as the longest bar in the
world. Both are stories that have
even established themselves internationally.
TOM: Your entrepreneurial
activities abroad have developed
very well. What were the
reasons for this and what are
your plans for the future?
Karl Schwitzke: There are two
main reasons for our international
success: In established markets
such as France, Belgium,
England, Austria, Switzerland,
etc., we have been successful
primarily due to our reliability in
the implementation of projects,
i.e. quality of execution, cost certainty
and punctuality. These are
issues that are of crucial importance
for retail companies.
Klaus Schwitzke: In markets
such as Eastern Europe, the
Middle East, India, etc., local
brands or retailers are coming
under increasing pressure from
international brands. For example,
many local brands have
often run out of space in the
high-end shopping malls in Dubai.
We were then able to help
them become competitive in
the domestic market with new
concepts. And many of our customers
have subsequently even
expanded internationally.
Karl Schwitzke: We will be
opening our office in Riyadh,
Saudi Arabia, in the fall. We
have been working in Saudi
Arabia for years. However, the
country has changed enormously
in the last five years. Not
only are women now allowed
to drive, but gender segregation
in public spaces has also been
largely abolished. Saudi Arabia
is expecting around 60 million
tourists per year in the future.
This means that the atmosphere
in the country has already
changed dramatically and the
commercial landscape is adapting
to the new circumstances.
We now have the same situation
as in Dubai 15 years ago. There
are also many strong local
brands in Saudi Arabia that now
have to face up to international
competition. Interestingly, we
also work for many international
brands in all these countries.
These brands then appreciate
our market knowledge and our
local presence for their expansion.
Klaus Schwitzke: Nevertheless,
Germany naturally remains
our most important market.
In addition to our work in
the retail, office and restaurant
sectors, we are seeing new developments
in the healthcare,
hotel and mobility sectors.
The second largest area is now
the development of concepts
for the conversion of existing
properties. As we have always
worked in inner-city areas, we
naturally have a great deal of
expertise in building in existing
buildings.
In contrast to international
brands or the large retail companies,
the large real estate developers
are very decentralized.
In order to be able to work well
with these companies, we have
decided to set up local offices
in Germany too. In addition to
Düsseldorf as our headquarters,
we have had an office in Berlin
for many years and in Munich
for two years. Next, we want to
open an office in Frankfurt and
one in Hamburg. That would
put us in an ideal position in
Germany.

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owners. With our tailored solutions and experience, you will benefit
from optimum management costs. And at all times, we have value
retention and the sustained development of your centre in mind.
We go one step further for you.
Joaquin Jimenez Zabala
Tel. +49 162 7861-324 joaquin.jimenez.zabala@wisag.de

Page 12 T O M
GUEST CONTRIBUTION July 2024
Never waste a good crisis -
upheaval in stationary retail
Exclusive guest article by Sascha Storm (Seybold Gmbh)
New retail openings? Yes, there
still are. Which retailers are
now on course for expansion
and why the current situation
also offers opportunities. An
exclusive guest article by Sascha
Storm, Head of Portfolio
Management & Expansion at
Seybold GmbH, known as a
full-service platform for store
locations.
After the coronavirus pandemic,
bricks-and-mortar retail has experienced
a veritable wave of
bankruptcies. Last year, many
large textile companies and fashion
retailers in particular were
affected by insolvencies, as a
study by Allianz Trade shows.
On the other hand, we are seeing
brands from abroad continuing
to expand in Germany. These
mostly come from Europe,
where there is an equally long
tradition in retail, and from markets
that can establish a certain
connection to the target market
of Germany, such as the Netherlands,
Italy or England.
Asians and the USA
are increasingly
expanding
Chain stores from Asian countries
such as Japan and South
Korea are also increasingly expanding
into Germany, often
driven by unique product ranges
and strong brands. Expanding
stores from the USA are also
entering the market, focusing
on Germany due to its stable
economy, affluent population
and central location in Europe.
This is currently the case with
the American furniture company
RH Restoration Hardware,
which is gradually gaining a
foothold in Europe.
Opportunities for
German retailers
However, there are also opportunities
for retailers from Germany.
Those brands that can
grow under their own steam are
currently in a comfortable position.
This is because the balance
Sascha Storm, Head of Portfolio Management & Expansion at Seybold GmbH. Photo: Seybold
of power has shifted as a result
of the space that has become
available in many places - rents
are currently negotiable, even
in prime locations. As a result,
chain stores can now open in
locations that have been on the
wish list for some time.
Do your homework
The first step for retailers looking
to expand is to carry out
a thorough market analysis and
site selection to ensure that new
stores are opened in locations
with high growth potential. In
addition, a strong brand identity
and a convincing value proposition
are needed to attract and
retain customers. Ultimately,
in addition to the location, the
brand and its brand image determine
whether the shopping
experience remains an unforgettable
one or whether customers
will prefer to avoid the store in
future.
In practice, however, we see
that the analysis part is often
neglected. An expansion strategy
that ultimately works cannot
do without detailed financial
planning. Calculating a wellfounded
P&L over three years
would rule out one location or
another from the outset because
it would become clear that the
contractual conditions are not
suitable.
Analysis part
comes up short
A wrong location decision must
also be avoided, as in many cases
a commitment is made for a
longer period of time. Smaller
chain stores in particular have
some catching up to do in this
area, but this is also neglected
in many places in the fashion
industry.
Technology opens
up opportunities
Ultimately, the use of technology
and data analysis today
offers completely different opportunities
than just a few years
ago to make informed business
decisions and increase operational
efficiency. Thanks to artificial
intelligence, scenarios can
now be calculated to determine
how potential location decisions
will affect a company‘s own
portfolio or which environment
is particularly suitable. The days
of relying purely on experience
and industry knowledge are a
thing of the past.

Page 13 T O M
MAP OF THE MONTH July 2024
Retail turnover growth rate, Europe
GfK’s Map of the Month for July shows the retail
turnover growth rate in 31 European countries in
2023. Across the EU, a total of 5.5 percent more
money flowed into the retail sector in 2023 compared
to the previous year. In real terms, however,
the retail sector recorded a decline in turnover
due to continued high consumer prices and consumers’
reluctance to spend. The highest growth
rates within the EU were observed in Eastern
European countries such as Bulgaria (+18 percent),
Romania (+14 percent) and Croatia (+14
percent), with larger markets such as Spain and
Poland also recording growth rates of over 12
percent.

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