bulwiengesa and ImmoScout24 have published a joint Commercial Barometer, which presents a comprehensive analysis of the German commercial real estate market. This publication combines bulwiengesa's continuous market and transaction data with supply and demand data from millions of ImmoScout24 listings. The analysis indicates that the market does not show homogeneous development but is increasingly differentiating according to factors such as location, quality, and use. These insights are crucial for strategic alignment in the real estate business.
In the retail segment, a divergent development can be observed. While prime rents in prime locations of A-cities show a stable level of approximately 250 EUR per square metre, the disparity between top locations and other areas is intensifying. This observation is supported by data from ImmoScout24: in the A-cities, a slight increase in demand of six index points has been recorded since 2022, whereas demand in the rest of Germany significantly decreased to an index value of 79. Simultaneously, the supply of retail space saw an increase of around 33 percent.
Structural Shifts and New Usage Concepts
Oliver Rohr, Head of Consulting at bulwiengesa, states that a widespread recovery is not occurring in retail; rather, there is a clear concentration on the most resilient inner-city locations. Classic prime locations are succeeding in maintaining their position, while many secondary locations are exposed to structural pressures and require alternative usage concepts. This development indicates a sustainable shift in attention and engagement.
City centres are undergoing a transformation. Classic prime locations are experiencing consolidation and focusing on a few high-frequency streets characterised by strong brands and innovative concepts. There, prime rents are stabilising at a high level. In parallel, adjustment processes continue in B- and secondary locations. Land use is changing fundamentally; traditional retail concepts are increasingly complemented or successively substituted by gastronomy, leisure activities, and services. Larger spaces, in particular, are losing attractiveness, while there is increased demand for smaller, flexibly usable units with efficient layouts. As a result, city centres may lose retail space but gain in profile and develop into multifunctional experience spaces.
Future Prospects for Inner-City Retail
The developments outlined signal a necessity for players in retail and the real estate industry to adapt their strategies. The repositioning of city centres towards experience hubs requires innovative approaches in area development and marketing. For FREITAG® Immobilien, this presents new opportunities and challenges in advising on and brokering properties that must meet these changing requirements. Precise market knowledge and an understanding of these structural changes are of crucial importance.
