Based on the massive and, in our view, sustainable changes in the retail market described above, the question of the impact on the property market naturally also arises.
In the fashion sector in particular, the consequences in the form of consolidations and closures are already clearly recognisable. Well-known large textile chains such as C&A and H&M have closed around 20 per cent of their shops during the pandemic alone. Other textile retailers such as Esprit or Gerry Weber used the insolvency proceedings for extensive consolidations.
In the short to medium term, we expect to see a massive supply overhang in shopping centres and city centre department stores. In our opinion, this excess supply will mean that the good city centre locations in prime locations and the very well-established shopping centres will continue to find prospective tenants, in some cases with significant falls in rents.
However, outside of these areas, which can be classified as very good, considerable vacancies are to be expected, especially as it will not be possible to continue to occupy 100 per cent of retail space in the medium term with an expected decline in sales of more than 30 per cent.
This inevitably raises the question of subsequent use and how this can best be realised. We are convinced that attractive uses are still conceivable for a large proportion of the properties - although an awareness of the investment costs incurred and any expected loss of rent must be realistically assessed.
