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Retail: Shopping centres in transition: fewer shops, more offices

Retail: Shopping centres in transition: fewer shops, more offices

Fitness studios, doctor’s offices, libraries: in many shopping centers, visitors can now do more than just shop. Mixed-use concepts are on the rise.

The shopping world in Germany is changing: stores for clothing, shoes, accessories and electronics still play a major role in shopping centers. However, their share of the total area is declining and their importance could continue to decline in the future. This is the conclusion reached by the “Shopping Center Report 2024” from the Cologne retail research institute EHI.

“More and more centers are reducing their retail space and focusing more on other uses such as leisure, restaurants, sports, doctor’s offices, offices, daycare centers and housing,” said study author Lena Knopf. “Mixed uses have one advantage: they are more lively. People visit the centers because they can also do many other practical things there.”

According to a recently published EHI survey, one in three shopping center managers say they have reduced their own retail space in the past five years or are planning to do so in favor of other types of use. Mixed uses are usually found on the upper floors, with offices and healthcare/doctor’s offices being the most common.

They can be found in more than half of the shopping centers and fitness studios in every third. Public institutions such as authorities, libraries, daycare centers and schools are somewhat rarer. The operators see positive synergy effects for retail in all forms. In every third center the retail share is only less than 80 percent.

Visitor frequencies lower than before the pandemic

The trend towards more mixed-use concepts is also evident in department store space that has become available due to the departure of large tenants such as Real or Galeria Karstadt Kaufhof. More could soon follow. For example, 5 of the 16 Galeria branches that are due to close in August are located in shopping centers.

The operators are struggling with another problem: in every second mall, visitor frequency is lower than before the corona pandemic. In many places, vacancy rates have increased. In almost every second center, at least five percent of the retail space is empty, and in every fifth center, ten percent or more is empty.

According to the study, the number of shopping centers has fallen slightly for the first time in 60 years; at the end of 2023 there were 506 across Germany, compared to 509 in the previous year. The decline is due to the fact that the retail share of some stores slipped below the minimum size of 10,000 square meters defined for shopping centers due to conversions.

The chain stores most represented in the stores are the shoe retailer Deichmann with 283 locations, the textile chain Ernsting’s family (257), the drugstore dm (238) and the mobile phone provider O2 Telefónica (233).

Source: Stern

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