New Deals and realistic Optimism in the Market
Even during the crisis our market sector was relatively stable. For 20 years we have been in the market of neighbourhood shopping centres, specialized market centres and discount markets and we have done deals during and despite the crisis – less than the years before – but only the prices went a bit down, in general the market remained resistant against downswing. Optimism could be realized already at the spring 2010 MIPIM. Less but more serious participants and in addition to the single deals there are some greater deals, too, including the institutional investors who always wake up later. We are sure that this year will show considerable turnover.
We think: 
- This year deals will be dominated by German investors, but we negotiate with a lot of foreign investors, too. The prices have risen this year by at least half a year’s rent, but they are still a lot below the average, an excellent situation if you consider the interest rates for loans.
- Everybody talks about and wants Core real estate, but we are not sure that many of them know what that means in respect to discount markets and neighbourhood shopping centres. For example: is a discount market in a small town at an arterial road, easy access, good visibility, large parking facilities core or not? For some of the big players it is too small and not in the inner city of a big city. But many experts know from experience it is a stable and long lasting investment.
- It still takes a long time for due diligence and bankers’ work.
- A lot of tenants and new tenants are in the market, looking for opportunities, so the rental basis is better now for good deals to come.
- In the retail industry sector of the anglo-saxon countries the number of consumers who are merely lacking the money for expensive shopping centres is rising. This is an ideal base for skilled discounters such as Aldi, Lidl, etc. to profile and gain larger market shares if they adjust to local needs in terms of outfit and supply. The design of their lease contracts will influence whether the retail real estate markets will become lucrative cash-cows.
- In Germany you can buy the original already: realistic investors with a solid financial background now have excellent chances to make good, solid and still cheap deals, easy to manage properties with stable cash flows that are largely resistant against business cycles.
