08/09
                             feelestate.de




German Shopping Centers:
Leasing in tough times
– what has changed?
Germany on its way into/out of a recession?




German Shopping Centers: Leasing in tough times – what has changed?   2
Development of sales in German retail




German Shopping Centers: Leasing in tough times – what has changed?   3
Company I Lease System


            1
          rent                                                                     ...
Company I Lease System

              avg. rent per sqm and year: €250
                                                   ...
Shopping Centers I Tenants Structure Top 10 tenants*



                                                                  ...
Shopping Centers I Maturity Distribution of Rental Contracts*



                                                         ...
Shopping Centers I Sector and Retailer Mix*


            non-food/electronics
                   20%                     ...
Current situation in Germany


              drop in demand (due to taxes, financial crisis, etc.)

              decline ...
Insolvencies of Retailers in Germany

              Rising press re on landlords d e to increase in retail
               ...
Karstadt as Tenant of Deutsche EuroShop

              Main-Taunus-Zentrum:
              approx 16.200 m², 2 levels, leas...
Karstadt as Neighbour of Deutsche EuroShop: Rhein-Neckar-Zentrum




German Shopping Centers: Leasing in tough times – wha...
Karstadt as Neighbour of Deutsche EuroShop: Rathaus-Center Dessau




German Shopping Centers: Leasing in tough times – wh...
How to react to the crisis – as tenant




German Shopping Centers: Leasing in tough times – what has changed?   14
Strategies of still successful tenants

                                                                      rent reducti...
Successful tenants willing to expand




German Shopping Centers: Leasing in tough times – what has changed?   16
How to react to the crisis – as landlord


              creative and more effective marketing-activities
              (b...
New Trends in the retail sector




German Shopping Centers: Leasing in tough times – what has changed?   18
Verticalization




             International sourcing of goods
             Skipping of intermediate trade levels
      ...
Monolabel-/Lifestyle-Stores




German Shopping Centers: Leasing in tough times – what has changed?   20
Specialisation


         … of products on offer and of target groups




German Shopping Centers: Leasing in tough times ...
International operating tenants




                                                                      AIGLE   Sacha


...
Labelshops - producers and retailers




German Shopping Centers: Leasing in tough times – what has changed?   23
Current trends in the leasing of shopping centers

              more variety of shops

              size (of shops) DOES...
Successful leasing of shopping centers in tough times is all about...

         … replacing outdated shop-concepts




Ger...
Successful leasing of shopping centers in tough times is all about...

         … selecting new and innovative concepts


...
Successful leasing of shopping centers in tough times is all about...

         … selecting new and innovative concepts


...
Successful leasing of shopping centers in tough times is all about...

         … change to latest shop design




German ...
Successful leasing of shopping centers in tough times is all about...

         … change to most demanded assortment of go...
Successful leasing of shopping centers in tough times is all about...

         … ideal targeting




German Shopping Cent...
Successful leasing of shopping centers in tough times is all about...

         … selecting the most popular brands




Ge...
Successful leasing of shopping centers in tough times is all about...

         … maximum utilisation of space




German ...
Successful leasing of shopping centers in tough times is all about...

         … ideal customer-approach




German Shopp...
Successful leasing of shopping centers in tough times is all about...

         … latest front- and light-design




Germa...
Successful leasing of shopping centers in tough times is all about...

         … modifying the variety of shops by tradin...
Consequences for landlords

             Flexibility
               • Rapidity in retail (replaceability)
               •...
Consequences for the rent-level

         Example: Altmarkt-Galerie Dresden
              Average rent in 2002 (opening):
...
Extension of the Altmarkt-Galerie Dresden




              The lettable area is set to increase by approx 32 000 m²
     ...
Conclusion




        German Shopping Centers:
        Leasing in tough times
        – what has changed?

        Not mu...
Appendix I Contact

         Deutsche EuroShop AG
         Investor & Public Relations
         Oderfelder Straße 23
     ...
Upcoming SlideShare
Loading in...5
×

Deutsche EuroShop "Leasing in tough times - what has changed?"

640

Published on

25.08.2009, Credit Suisse Real Estate Round Table, London:
"Leasing in tough times - what has changed?"
Presentation of Olaf G. Borkers, CFO

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
640
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
41
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Deutsche EuroShop "Leasing in tough times - what has changed?"

  1. 1. 08/09 feelestate.de German Shopping Centers: Leasing in tough times – what has changed?
  2. 2. Germany on its way into/out of a recession? German Shopping Centers: Leasing in tough times – what has changed? 2
  3. 3. Development of sales in German retail German Shopping Centers: Leasing in tough times – what has changed? 3
  4. 4. Company I Lease System 1 rent General form of turnover-linked rent lease contracts for DES-tenants Participation in sales growth of retail i d il industry CPI-linked minimum rent 0 1 2 3 4 5 6 7 8 9 10 years Lease standards: 10 years lease only no break-up option turnover-linked rents t li k d t minimum rents are CPI-linked German Shopping Centers: Leasing in tough times – what has changed? 4
  5. 5. Company I Lease System avg. rent per sqm and year: €250 avg. German retail: avg. turnover per sqm and year: €4,700 €3,330 Rent to sales ratio: 6.5 9.5% Rent-to-sales-ratio: 6.5-9.5% weighted maturity of rental contracts: >7 years € million 5% 115.3 115 3 115 4% 95.8 92.9 3% 2.8% 90 2.6% 2 6% 2.4% 2.2% 72.1 2.0% 2% 1.8% 61.4 65 57.9 1% 0% 40 2003 2004 2005 2006 2007 2008 Revenue Rate of turnover linked rent turnover-linked German Shopping Centers: Leasing in tough times – what has changed? 5
  6. 6. Shopping Centers I Tenants Structure Top 10 tenants* Low level of Metro-Group 5.1% dependence on the top 10 tenants Douglas-Group 4.6% Peek & Cloppenburg 2.7% H&M 2.2% Inditex 2.0% New Yorker 1.9% Deichmann 1.9% dm-Drogeriemarkt 1.4% REWE 1.3% Engelhorn & Sturm 1.3% Other O h tenants total 24.4% total 75.6% *in % of total rents as at 31 Dec 2008 German Shopping Centers: Leasing in tough times – what has changed? 6
  7. 7. Shopping Centers I Maturity Distribution of Rental Contracts* Long-term contracts guarantee rental income 2014 et sqq: 69.4% 2009: 2.1% 2010: 2.3% Weighted maturity > 7 years 2011: 10.0% 2012: 12.8% 2013: 3.4% *as % of rental income as at 31 Dec 2008 German Shopping Centers: Leasing in tough times – what has changed? 7
  8. 8. Shopping Centers I Sector and Retailer Mix* non-food/electronics 20% department stores Balanced sector and 13% retailer diversification food 7% health & beauty 6% inter-/national retailers catering 49% 4% fashion services 49% 1% local entrepreneurs 26% regional retail chains 25% *in % of lettable space as at 31 Dec 2008 German Shopping Centers: Leasing in tough times – what has changed? 8
  9. 9. Current situation in Germany drop in demand (due to taxes, financial crisis, etc.) decline in sales (up to -30 %) increase in retail space (due to insolvencies of large-sized units) closing down of shops ( g (due to decline in sales) ) increasing fluctuation demand for retail areas is concentrating on special locations locations, shop-sizes etc. changes in sociodemographic structures (e. g. age structure, size of households, etc.) new forms of distribution (e. g. Internet, Petrol stations, Teleshopping, etc.) funding problems for tenants due to changes in bank policies German Shopping Centers: Leasing in tough times – what has changed? 9
  10. 10. Insolvencies of Retailers in Germany Rising press re on landlords d e to increase in retail pressure due space (especially large units) German Shopping Centers: Leasing in tough times – what has changed? 10
  11. 11. Karstadt as Tenant of Deutsche EuroShop Main-Taunus-Zentrum: approx 16.200 m², 2 levels, lease contract until 31.12.2026 Phoenix-Center H b Ph i C t Hamburg: approx 3.200 m², 1 level, right to cancel until 31.12.2009 German Shopping Centers: Leasing in tough times – what has changed? 11
  12. 12. Karstadt as Neighbour of Deutsche EuroShop: Rhein-Neckar-Zentrum German Shopping Centers: Leasing in tough times – what has changed? 12
  13. 13. Karstadt as Neighbour of Deutsche EuroShop: Rathaus-Center Dessau German Shopping Centers: Leasing in tough times – what has changed? 13
  14. 14. How to react to the crisis – as tenant German Shopping Centers: Leasing in tough times – what has changed? 14
  15. 15. Strategies of still successful tenants rent reduction program rent reductions optimizing the shop-portfolio p g pp suspension of rental index (as ( a precaution) ti ) / closure of specific branches expansion by higher subsidies from the landlord f th l dl d refusal of rent increases German Shopping Centers: Leasing in tough times – what has changed? 15
  16. 16. Successful tenants willing to expand German Shopping Centers: Leasing in tough times – what has changed? 16
  17. 17. How to react to the crisis – as landlord creative and more effective marketing-activities (by the center-management) deferral of rent payment plan agreement (temporary) rent reductions premature termination of contract (with/without separation fee) Every step has to be individual, depending on the tenant's specific situation German Shopping Centers: Leasing in tough times – what has changed? 17
  18. 18. New Trends in the retail sector German Shopping Centers: Leasing in tough times – what has changed? 18
  19. 19. Verticalization International sourcing of goods Skipping of intermediate trade levels Rapid sourcing of goods (e.g. ZARA: from first product-idea to shop in 16 days) German Shopping Centers: Leasing in tough times – what has changed? 19
  20. 20. Monolabel-/Lifestyle-Stores German Shopping Centers: Leasing in tough times – what has changed? 20
  21. 21. Specialisation … of products on offer and of target groups German Shopping Centers: Leasing in tough times – what has changed? 21
  22. 22. International operating tenants AIGLE Sacha TANEO German Shopping Centers: Leasing in tough times – what has changed? 22
  23. 23. Labelshops - producers and retailers German Shopping Centers: Leasing in tough times – what has changed? 23
  24. 24. Current trends in the leasing of shopping centers more variety of shops size (of shops) DOES matter agglomeration of chain stores / verticalization less market actors international expansion strategic partnership of tenants and landlords accelerating change of markets overall concept overall-concept of architecture, tenant mix tenant-mix and professional center-management German Shopping Centers: Leasing in tough times – what has changed? 24
  25. 25. Successful leasing of shopping centers in tough times is all about... … replacing outdated shop-concepts German Shopping Centers: Leasing in tough times – what has changed? 25
  26. 26. Successful leasing of shopping centers in tough times is all about... … selecting new and innovative concepts German Shopping Centers: Leasing in tough times – what has changed? 26
  27. 27. Successful leasing of shopping centers in tough times is all about... … selecting new and innovative concepts German Shopping Centers: Leasing in tough times – what has changed? 27
  28. 28. Successful leasing of shopping centers in tough times is all about... … change to latest shop design German Shopping Centers: Leasing in tough times – what has changed? 28
  29. 29. Successful leasing of shopping centers in tough times is all about... … change to most demanded assortment of goods German Shopping Centers: Leasing in tough times – what has changed? 29
  30. 30. Successful leasing of shopping centers in tough times is all about... … ideal targeting German Shopping Centers: Leasing in tough times – what has changed? 30
  31. 31. Successful leasing of shopping centers in tough times is all about... … selecting the most popular brands German Shopping Centers: Leasing in tough times – what has changed? 31
  32. 32. Successful leasing of shopping centers in tough times is all about... … maximum utilisation of space German Shopping Centers: Leasing in tough times – what has changed? 32
  33. 33. Successful leasing of shopping centers in tough times is all about... … ideal customer-approach German Shopping Centers: Leasing in tough times – what has changed? 33
  34. 34. Successful leasing of shopping centers in tough times is all about... … latest front- and light-design German Shopping Centers: Leasing in tough times – what has changed? 34
  35. 35. Successful leasing of shopping centers in tough times is all about... … modifying the variety of shops by trading-up German Shopping Centers: Leasing in tough times – what has changed? 35
  36. 36. Consequences for landlords Flexibility • Rapidity in retail (replaceability) • New profile of requirements ( p q (size, specific location, etc.) , p , ) • New trends / assortments of goods Creating of • Structures of supply (variety of retail space, etc.) • Add d value f retailers Added l for t il • Overall high quality concept of architecture, variety of shops, quality level and always: focus on the y German Shopping Centers: Leasing in tough times – what has changed? 36
  37. 37. Consequences for the rent-level Example: Altmarkt-Galerie Dresden Average rent in 2002 (opening): 25.62 25 62 € per sqm and month Average rent predicted for extension: 30.42 € per sqm and month If you have the right product y you can achieve the right p g price, , even in tough times German Shopping Centers: Leasing in tough times – what has changed? 37
  38. 38. Extension of the Altmarkt-Galerie Dresden The lettable area is set to increase by approx 32 000 m² approx. 32,000 (currently approx. 44,500 m²), allowing some 90 new shops to open Expansion includes 3 000 m² office space and 5 000 m² 3,000 5,000 for a hotel Approx. €155 million total investment volume (approx. €77 5 million f DES) ( €77.5 illi for German Shopping Centers: Leasing in tough times – what has changed? 38
  39. 39. Conclusion German Shopping Centers: Leasing in tough times – what has changed? Not much. It has always been challenging... German Shopping Centers: Leasing in tough times – what has changed? 39
  40. 40. Appendix I Contact Deutsche EuroShop AG Investor & Public Relations Oderfelder Straße 23 20149 Hamburg Claus-Matthias Böge Chief Executive Officer Tel. +49 (40) 41 35 79 - 20 / -22 Fax +49 (40) 41 35 79 - 29 ( ) E-Mail: ir@deutsche-euroshop.com Web: www.deutsche-euroshop.com Olaf G. Borkers Chief Financial Officer Important Notice: Forward-Looking Statements Statements in this presentation relating to future status or circumstances, including statements regarding manage- ment s ment’s plans and objectives for future operations sales operations, and earnings figures, are forward-looking statements of goals and expectations based on estimates, assumptions Patrick Kiss and the anticipated effects of future events on current and Head of Investor & Public Relations developing circumstances and do not necessarily predict future results. Many factors could cause the actual results to be materially different from those that may be expressed or implied by such statements. Deutsche EuroShop does not intend to update these forward-looking statements and does not assume any Nicolas Lissner obligation t do so. bli ti to d Manager Investor & Public Relations German Shopping Centers: Leasing in tough times – what has changed? 40
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×