In 2016, for the first time in many years, both asking rates and attainable rents for retail space fell in some inner-city locations in Hamburg. Landlords in Hamburg were once more increasingly prepared to discuss terms, so that both sides agreed contracts more rapidly than in the past. “Mostly, lower prices were seen for retail space of over 300 m² or premises with less advantageous lay-out. In view of how the growth of online shopping has cut into sales in bricks-and-mortar stores, this change of tactic on the part of many landlords was long overdue,” says Sven Bechert
, head of retail at the Hamburg property services provider Grossmann & Berger, member of German Property Partners (GPP).
Profitability beats market presence
Instead of securing a location at any price, managers now have to calculate the viability of retail and restaurant space far more precisely. If the figures do not tally, tenants take the logical step of leaving the location or declining to renew the lease.
Highest rents possible in Spitalerstrasse and Neuer Wall
remarks that top properties sized between 80 and 120 m² can still be let for top rents in Spitalerstrasse, where footfall is high, and in the luxury environment of Neuer Wall. In 2016 the top rents rose slightly to €300/m²/month, compared with €280/m² in 2015.
More contracts, lower take-up of space
The growing willingness of landlords to negotiate terms made the market far more fluid. In 2016 Grossmann & Berger noted 11% more contracts (56) in Hamburg’s inner city than in 2015. However, the actual take-up of space fell by 10% (about 19,000 m²). Whereas most of the contracts (26) were signed for small premises of 150 m² or less, the lion’s share of take-up (34%) was registered in the 1,001 to 2,000 m² size category.
No new retail developments projected
Unlike 2015, when the former Vattenfall/HEW building was turned into the “Perle Hamburg” shopping mall, the adjoining HSH Nordbank mall was redeveloped, and “Streit’s Haus” was converted into shop space, no new inner-city retail projects came onto the market in 2016. The major redevelopments “Alter Wall” and “Stadthöfe” are expected to be completed at the end of 2018 or thereafter.
Most textiles retailers are in City West
Apparel companies were the biggest group of new tenants in Hamburg city centre, accounting for 28% of take-up. However, in 2015 they accounted for a massive 52% of the total. The biggest new agreement signed by a clothing firm was for 1,150 m² of space, a contract brokered by Grossmann & Berger for Globetrotter
in the “Girardet Hoefe” (Gerhofstrasse 19). The outdoor specialist plans to open its first city concept here in March. Apart from a few exceptions, take-up by apparel retailers has concentrated on City West. “Here there is a wider choice of retail space with more affordable rents than on Mönckebergstrasse, Spitalerstrasse or the adjoining streets and malls,” explains Bechert
Spending on home improvements boosts furnishings trade
Together, the related sectors furniture/furnishings (26%) and home accessories/household articles (7%) accounted for 33% of take-up of space. This was almost twice the figure seen in 2015, when their share was 19%. “Due to extremely low levels of interest, many people prefer to spend money on their homes and furnishings/fittings,” says Bechert
. “This trend is reflected by the increased number of suppliers moving into Hamburg city centre.” In 2015 Clas Ohlson, a Swedish retailer of household goods, moved into “Streit’s Haus” on Jungfernstieg, renting 1,800 m² of space to open its first German branch; it was followed in 2016 by the Danish retailer of designer home accessories and furnishings, Illums Bolighus,
which Grossmann & Berger assisted in the search for its first German store, located in Hamburg city centre. On 11 November 2016 Illums Bolighus opened in premises previously occupied by Habitat, a 1,500 m² store at Neuer Wall 54. This was the largest rental agreement signed by a firm in the furniture/furnishings and home accessories/household sectors. In 2017 BoConcept
will return to Hamburg city centre after a lengthy absence. Grossmann & Berger brokered the 320 m² of sales floor that the Danish designer-furniture and home accessories chain store has taken in space formerly used by Pepe Jeans at Gänsemarkt 33.
Backlog of demand in the health food sector
Apart from clothing and furnishing retailers, increasing numbers of restaurant concepts are taking an interest in Hamburg city centre, although this is hardly reflected in the figures as yet. In 2016 this segment accounted for 13% of the take-up of space. Compared with 2015 (15%) this share was barely changed. “More and more people eat out instead of at home. At the same time, customers are now willing to pay more for good ingredients and products,” says Bechert
. “That is empowering for health and premium fast food concepts. Hamburg city centre has a lot of catching up to do in this segment compared with the situation in other countries.” The rental agreement that Grossmann & Berger brokered in 2016 for Mad about Juice
, which opened its second juice bar in the “Metropolis-Haus” at Dammtorstrasse 29-32, is one example.
The market survey may be downloaded from our website
Source photo: Grossmann & Berger GmbH
Photo caption: In November 2016 Illums Bolighus, a Danish retailer of designer home accessories, opened in Hamburg. The 1,500 m² store at Neuer Wall 54 features well-known design classics and a selection of innovative brands in the design, lighting, gastronomy, bathroom, wellness and fashion segments.