Current Market Situation
We can take one thing for sure: for the next months ( worst case up to 2 years) there will arise sudden bad news in the real estate, banking and consultant scene so tomorrow some of our predictions may be out of time. In our everyday work of the last years we were considered by some big heads in the banking, consultant and investment sector too conservative, cautious, and prudent. Our policy was to sell one by one even if it were single retail markets and that meant due diligence one by one instead of trying to concentrate on big portfolio deals with an average checking – today we see it were mainly those people who now try to escape from personal responsibility for losses and write-offs. We still realise good and safe deals for our customers and partners and smile.
- Despite financial crisis and decline of investment volume there is still severe interest in the retail real estate market. (only the Big Deals do not happen at the moment)
- Discount and interesting, fresh formats in the food and specialized market sector are still expanding and prospering, even in the US and UK.
- You need know how about trends and strategies in this sector in the local market to invest in solid and profitable outlets.
- The retail market is still booming world wide: the retailers expand and business gets more international. Next to Central and Eastern Europe and Turkey the Asian and Middle East are regarded at as bearing the greatest potential. On the other hand you must accept infrastructure, juristic and other uncertainties for your turnover. In Germany however is a stable turnover of € 380 Billion in the last years. There is only a shift within the sectors.
- Nowadays not only location is important but socio-economic and urban development aspects. You need analysis of catchment areas and absorption of purchasing power as well as sustainability to see who will survive and be prospectous.
- Nowadays in Germany, a certain paralysis can be noticed amongst numerous investors who paid hype-prices in the past; they now only watch. They are too strictly inspired by the anglo-saxon model – which is fatal as they now expect falling prices in Germany like the decline in the UK and the USA and this is according to their unreal expectations of rapidly rising prices in the years before. Therefore, they now miss interesting investments due to a lack of knowledge of the German market (“The larger the company, the larger the resistance against consultancy of local partners”).
- Others do not want to do without the extra profit during the hype-years and transfer their expensive refinancing costs to reduced offers/LOIs.
- Thus, one should not believe everything, but be patient. See this crisis as a chance to enter the market. The prices for good investments will rest stable and after the crisis they will rise in value.
- 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 very cheap deals, easy to manage properties with stable cash flows that are largely resistant against business cycles.
