Sector Information Retail
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City of Munich Department of Labor and Economic Development Sector information July 2018 Retail in Munich - Retail in Munich – Shopping at its best 1 - Healthy business drives purchasing power 2 - Munich's retail landscape: facts and figures 3 - Retail space 3 - Retail sales 3 - Purchasing power 3 - Purchasing power and retail sales indices in Germany 3 - Pedestrian footfall in 2017 4 - Retail rents 4 - Top rents in Munich's prime retail locations, 2017 4 - Online trading 5 - Dynamic development 6 - Major shopping malls in the city 8 - City center 8 - Shopping malls in Munich 8 - Local government's node strategy – an effective tool to control and cultivate growth 10 - Key players in the city center 11 - Further information 12 Retail in Munich – Shopping at its best Variety is the name of the game when you shop in Munich. Famous for its attract- ive offerings, the local retail community covers every price bracket and leaves nothing to be desired. Is designer fashion your thing? Or would you prefer something that makes an indi- vidual statement? Fancy a stroll through the pedestrian zone? Or how about a spot of window-shopping among the luxury boutiques on the Maximilianstrasse, Theat- inerstrasse or Brienner Strasse ? Munich's historic old town center and the various outlying urban districts cater to literally every taste. Small, traditional stores rub shoulders with international retail chains. Selective specialty retailers jostle for position with well-stocked department stores. Eye-catching designer outlets are Published by: City of Munich, Department of Labor and Economic Development Herzog-Wilhelm-Straße 15, 80331 Munich, Germany, www.munich.de/business Responsible for contents: Britta Buck, Phone +49 (0)89 233-22608, Fax +49 (0)89 233-27966, mailto: [email protected] City of Munich Department of Labor and Economic Development July 2018 veritable oases for the individualist. Tradition meets the modern day, the regional crosses paths with the international. Especially in the city center, inviting arcades and stylish, secluded courtyards give the Munich shopping scene a truly unmistakable flair. Healthy business drives purchasing power Munich is rightly regarded as a top retail location. The city's perfectly conducive economic climate is doubtless one of the key reasons: • For years, Munich has occupied a leading position as one of Germany's most dynamic business regions. • Unemployment is well below both the national and Bavarian averages. • An above-average proportion of "high potential" individuals – well-qualified people with commensurate salaries – work in Munich. • 2017 was yet another record year for Munich's tourist industry: 7.8 million arrivals and 15.7 million overnight stays were registered for Munich hospitality providers with ten or more beds in 2017. Visitors from German- speaking Europe notched up a total of 8.8 million overnight stays in the Bavarian capital – 56 percent of the total. The other European markets generated 4.2 million overnight stays, while the Asian markets contributed 1.9 million overnight stays. Growth was recorded across all countries in the latter region. Guests from India posted the longest average stays of 3.4 days. Overnight visits from the US added up to 995,000, while overnight stays by visitors from the whole North and South American market came to 1.4 million. All in all, the total number of domestic arrivals rose to 4.2 million, with the number of domestic overnight stays up to 8 million. The 3.5 million guests from abroad recorded a total of 7.7 million overnight stays. Since overnight stays by visitors from abroad account for around 50 percent of the overall total, Munich remains the German city that attracts the largest proportion of foreign tourists. Tourism correlates closely with retail. On the one hand, a diverse retail landscape makes Munich even more attractive as a travel page 2 City of Munich Department of Labor and Economic Development July 2018 destination. On the other hand, tourists themselves boost demand and have a positive impact on the retail industry. Local retailers are benefiting in particular from the increase in visitors from abroad. Munich's retail landscape: facts and figures Retail space Munich boasts a total of 1.81 million m2 of retail space. Nearly half a million square meters (490,400 at the last count) are situated in the city center alone. Retail sales Per-capita retail sales give a fair indication of a city's importance as a retail loca- tion. On this score too, Munich leads the table of Germany's largest cities. In 2017, per-capita retail sales were 48.5% above the national average. Purchasing power Purchasing power designates the disposable income available to private house- holds for general consumption. Munich itself, the surrounding urban district and nearby Starnberg consistently occupy the top slots in the whole of Germany. The city of Munich has a purchasing power index of 135.5 (2017) – well ahead of cities such as Düsseldorf, Frankfurt and Stuttgart. Purchasing power and retail sales indices in Germany City Population on Per-capita purchasing Per-capita retail sales January 1, 2016 power index in 2017 index in 2017 (national average = (national average = 100) 100) Munich 1,450,381 135.5 148,5 Düsseldorf 612,178 118.7 134,7 Frankfurt 732,688 114,8 117,3 Stuttgart 623,738 111,8 132,4 Hamburg 1,787,408 109.4 124,2 Cologne 1,060,582 108.1 132 Berlin 3,520,031 91.7 103,2 (Source: BNPParibas Real Estate GmbH, German Retail Market 2018) page 3 City of Munich Department of Labor and Economic Development July 2018 Pedestrian footfall in 2017 According to Engel & Völkers' annual footfall report, Munich's Neuhauserstrasse (approx. 15,248 pedestrians per hour) ranks as one of the busiest premium retail locations in Germany, second only to Stuttgart's Königstrasse (17,018). Third place goes to the Schildergasse in Cologne (approx. 15,089 pedestrians per hour), closely followed by Munich's Kaufingerstrasse (approx. 14,816) and the Georgstrasse in Hanover (approx. 14,189). These are the findings of the latest footfall analysis conducted by Engel&Völkers Commercial in 38 cities in Germany. Footfall was counted on a Saturday in April 2017. (Source: Engel&Völkers, Footfall Analysis 2017, Retail Services) Retail rents Munich has for years commanded the highest retail rents anywhere in Germany. In 2017, top inner-city rents ranged from EUR 120/m² in Tal to EUR 370/m² in the Kaufingerstrasse/on Marienplatz. Top rents in Munich's prime retail locations, 2017 Street Top rents in €/m² Kaufingerstrasse/Marienplatz 370 Neuhauser Strasse 340 Maximilianstrasse 310 Weinstrasse 250 Theatinerstrasse 230 Sendlinger Strasse 210 Residenzstrasse 190 Tal 120 Top rent: €/m²/month when premises are re-let; 100 m² ground-level selling space; 6-m display window (Source: BNPParibas Real Estate GmbH, German Retail Market 2017) page 4 City of Munich Department of Labor and Economic Development July 2018 National and international comparison of retail rents The Bavarian capital's lead over other German cities has narrowed in recent years. After Munich's top locations, Germany's most expensive retail high streets are found in Berlin (EUR 320/m²), Frankfurt (EUR 300/m²) and Düsseldorf/ Hamburg/ Stuttgart (EUR 275/m²). International comparison currently singles out New York's Upper Fifth Avenue as the most expensive retail location in the world (EUR 2,355/m²). It is followed by Causeway Bay (EUR 2,139/m²) in Hong Kong and the New Bond Street (EUR 1,350/m²) in London. Germany's most expensive retail high street – Munich's Kaufingerstrasse/Neuhauserstrasse (EUR 370/m²) – currently ranks twelveth in the world. Aside from the city's prime locations, rental levels are as follows: Location Average rent (€/m²) City 1B (200m²) 105-175 City outskirts, urban district 20-55 centers (200m²) City outskirts, specialty stores 15-23 (200m²) (Source: Immobilien-Marktbericht 2017/2018, Colliers International) Online trading The online market is thus growing faster than expected. The highest proportion of retail revenue is realized by the clothing, electrical appliances and leisure/hobby segments. Although specialty retailers' gains from online channels are still below average, the Online Monitor published by the German Retail Association (HDE) still indicates stronger online growth in stationary retail as a whole. There is also an observable trend toward further gains in the mobile retail segment. Smartphones have become the pivotal point of access to today's customers. (Source: German Retail Association (HDE): Handel digital - Online-Monitor 2018) page 5 City of Munich Department of Labor and Economic Development July 2018 Dynamic development Munich's powerful attraction as a retail hub is also reflected in the current number of new openings and a consistently long list of revitalization and new building projects. In the heart of the city, the Alte Akademie is being converted to a 23,000 m2 urban quarter complete with apartments, stores, offices, cafés and restaurants. Retailers will occupy nearly half of the total floor space. Completion and opening are scheduled for the end of 2021. The venerable Oberpollinger department store is being converted during ongoing operation. Generously dimensioned retail spaces are taking shape that will sell world-famous brands in concept stores. The objective is to transform the building into a “visionary, open department store”. The new “The Storey” in the basement and the “Living Storey” on the fourth floor give an impression of what lies ahead. The owner of the Karstadt department store at the railway station likewise has remodeling plans. One option is to replace the long 1970s building in place today with two new facilities that would also improve the appearance of the area around the station. Between 2018 and 2026, Munich's central railway station will be modernized in several phases.