TOM 04 2024

Page 11 T O M
CENTERS April 2024
From mixed-use to events, many shopping centers are looking for concepts to position themselves for the future.
Symbolic image: Unsplash / Krisztina Papp
Shopping centers reposition themselves
White paper sheds light on the situation of the asset class
Shopping centers find themselves
in a challenging competitive
environment. Global
crises and war situations are
driving up costs, unsettling
customers and resulting in a
reluctance to spend while at
the same time reducing rental
income.
Despite the difficult waters,
center managers are trying to
develop solutions to make their
centers fit for the future. Mixeduse
is already a proven trend, as
are measures such as increased
and cost-saving energy efficiency
and attractive events.
Decline in rental
volume
„Of course, these can be sensible
measures to combat vacancies
and declining visitor frequency.
However, it is impressive to see
the different lines of development
that are emerging in shopping
centers,“ says EHI study
author and retail real estate expert
Lena Knopf, explaining the
results of the white paper „Center
Management in Focus“ by
EHI and GCSP.
In a clear majority of around
two thirds of centers, the rental
volume (excluding ancillary
costs) declined between 2021
and 2023. The two main reasons
for this are subsequent lettings
with lower rents to retailers and
rent reductions on existing contracts.
Events increase
attractiveness
Only in the more recent centers
built after 2010 did the proportion
with increased rental income
outweigh the proportion
with decreased rental income.
The centers with retail space of
between 30 and 40,000 square
meters performed the worst.
The smallest centers with ten to
20,000 square meters of retail
space performed best, with the
lowest proportion of decreased
rental income and the highest
proportion of increased rental
income. Increased mixed-use
concepts such as leisure facilities
or medical services are attracting
new tenants to shopping
centers.
Events are an established measure
to increase the attractiveness
of a shopping center and
strengthen customer loyalty.
Seasonal occasions such as
Christmas or Easter (93%) promise
the greatest success, followed
by fun events suitable for
families (73%). Overall, many
centers (43%) are organizing
fewer events than before the
pandemic or the same number
(46%). The larger centers are in
the lead. The smaller the center,
the more difficult it is to host
many successful events. Every
second small center under
20,000 square meters reduces
the number of events, but only
around one in three large centers
with 40,000 square meters
or more.
Frequency and
turnover
Visitor frequency - often measured
using video, light or laser
technology - has fallen in 54%
of shopping centers compared
to the pre-coronavirus level in
2019, but 30% have observed
a constant frequency and only
16% are happy about more customers.
However, retail sales
are looking slightly better. At
35%, they are higher or even
significantly higher, and at 29%
they are at a similar level - even
though this growth is currently
accompanied by relatively high
inflation rates, which means that
many retail sectors have been
able to increase their sales in
nominal terms but not in real
terms.
Often moderate
vacancy rate
More than half of the centers
(57%) have a moderate vacancy
rate of up to 5% of the retail rental
space. A good third (34%) of
centers even have a low vacancy
rate of up to 3% this year, although
this was almost twice as
many (66%) in 2019. The proportion
of centers with vacancies
of more than five percent
has more than doubled from 19
percent in 2019 to 44 percent in
2024.