Germany: Retail Investment Q4 2018
Date Published: 13/02/2019
Looking at the far-reaching structural changes currently happening across the retail landscape, we expect the selective approach being taken by investors in their decisions to purchase retail property to continue in 2019. Many investors who tend to be rather risk-averse in the current market cycle will likely wait for the long overdue revitalization and repositioning of shopping centers and downtown department stores before again showing interest in products outside the core segment. Based on this trend, we expect to see a rise in shopping center yields over the course of 2019. The retail warehouse segment, which is dominated by grocery, will for now remain a main force behind transaction activity, which will cause purchase prices to stabilize and, in some cases, increase slightly. Despite the high number of dealssigned, the limited volumes generated by this asset type could mean that the €10bn-mark will be difficult to reach in 2019, especially with supply becoming increasingly scarce.