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

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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

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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)

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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)

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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. The first phase will be a complete rebuild of the Starnberg wing, where a roughly 70-meter-tall retail, office, café and restaurant complex will add an eye-catching new feature. Once the entire project is completed in 2026, railway operator Deutsche Bahn envisages a revamped station with roughly 105,000 m² of space for offices and practices, conference rooms, a hotel, cafés, restaurants and shops, creating a “gateway to the city” that improves access to the old town center and the pedestrian zone.

On Oertelplatz in Munich's northwestern district of Allach, the EVER.S project is creating a modern urban district center with 14,000 m² of floor space for retail, services, cafés and restaurants. The new center is due to open in 2019.

Also on the western edge of the city, as many as 20,000 people will live and up to 7,500 will work in the new district of Freiham. Plans for a shopping center in the

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July 2018 new heart of this district are now taking on a more concrete form: Around 20,000 m² of selling space is envisaged, of which roughly 6,000 m² is earmarked for local supplies. The decision for a specific investor was made at the end of 2017. Construction work is scheduled to begin in 2019.

Starting in 2019, a new building on the corner of Planeggerstrasse/ Bodenseestrasse will expand the shopping mall at the center of Pasing. The new facility will accommodate both a hotel and 3,700 m² of retail space.

The PEP shopping mall in Neuperlach on the southeast edge of Munich has been modernized. A new building has added 8,000 m2 of extra shopping space. Since May 2018, the mall has thus boasted 135 stores across a total of 60,000 m2.

Another vibrant urban district center is now taking shape on the Hanns-Seidl-Platz right opposite the PEP. Alongside apartments and a civic center, what will be known as the Perlach Plaza will also accommodate 10,000 m2 of retail space for specialty stores.

A new wing of the Riem Arcades in Messestadt West opened in March 2018. The additional 10,000 m2 of space has ramped this mall up to a total of 140 stores.

At the east end of Munich, a commercial building with about 4,000 m2 of floor space will open in 2018 in the district center around the Messestadt Ost subway station in Messestadt Riem.

Under the name “Werksviertel”, a 38-hectare urban district featuring 1,150 homes and giving work to 7,000 people is taking shape at the back of the east-end Ostbahnhof station. This new district will accommodate all kinds of shopping facilities, including a mall for local supplies.

Another east-end project is the development of the new Baumkirchen Mitte quarter in the district of Berg am Laim. Alongside 560 new apartments, the new Neo commercial building with more than 10,000 m2 of floor space for retail uses opened here at the end of 2017.

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Major shopping malls in the city

City center Munich's best-known shopping precinct is the old town center, which is full of pop- lar shopping streets and arcades. The more exclusive, up-market face of the city center is encountered in the Weinstrasse, Theatinerstrasse, Maximilianstrasse, Residenzstrasse and Brienner Strasse. Another very busy shopping area is demarcated by the Kaufingerstrasse, Neuhauser Strasse, Tal and Sendlinger Strasse. Gourmets from around the world flock to the Viktualienmarkt to enjoy its unique flair and dazzling array of choice foods.

Shopping malls in Munich Outside the city center, Munich currently has the following main shopping malls:

• Olympic Shopping Center, OEZ Situated in the northwestern district of Moosach, the Olympic Shopping Center (commonly known as the "OEZ") is Munich's largest shopping mall. The OEZ boasts some 56,000 m² of store space on two levels. It accommodates around 135 specialty stores, department stores, several large textile stores, grocers/greengrocers, service companies and an attractive selection of restaurants and cafés. The mall is operated by ECE Projektmanagement GmbH & Co. KG. Contact: [email protected].

• Munich-Neuperlach Shopping Center, PEP The PEP mall is the largest shopping facility in the eastern part of Munich. 125 specialty stores, service companies, cafés and restaurants present a diverse array of offerings in around 50,000 m² of net floor space on three levels. The mall is op- erated by ECE Projektmanagement GmbH & Co. KG. Contact: [email protected].

• The Riem Arcades Opened right opposite the new exhibition center in March 2004, the Riem Arcades are the third-largest shopping mall in Munich. The Arcades immediately carved out a niche as the pulsating heart of the Messestadt Riem district. Around 48,600 m² of retail space provide ample room for around 128 stores, cafés and restaurants. The three-story mall is operated by Unibail-Rodamco Germany GmbH. Contact: [email protected]. page 8 City of Munich Department of Labor and Economic Development

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• Pasing Arcades With its extension having been completed in March 2013, the Pasing Arcades now constitute an attractive shopping mall comprising roughly 39,000 m² of retail and service space across three floors, shared by nearly 150 stores. The thoroughly modern shopping mall is operated by Unibail-Rodamco Germany GmbH. Contact: [email protected].

• MIRA Shopping Center, Munich-Nordheide The new MIRA center opened in March 2008 and is Munich's smallest shopping mall. Some 16,000 m2 of retail space allows 70 stores to sell their goods and ser- vices. Close attention was paid to the use of natural materials in developing this thoroughly modern complex. Contact: [email protected].

• Fünf Höfe The Fünf Höfe arcade on the edge of Munich's city center took shape from 1998- 2003 when a HypoVereinsbank building complex was gutted and converted. The arcade combines around 60 stores covering approximately 14,000 m2 of floor space with eight cafés and restaurants that add a further 2,500 m2. The mall also includes the Hypo-Kunsthalle art space (about 3,200 m2), which presents temporary exhibitions addressing varying themes, artists and periods. B&L Property Management GmbH is the current operator of the Fünf Höfe. Contact: +49 (0)89 2444-9580

• Hofstatt The Hofstatt shopping arcade opened on the former site of newspaper publisher Süddeutsche Zeitung, between Sendlingerstrasse, Hackenstrasse and Färbergraben in Munich's old town. Totaling more than 15,500 m2 of retail and 18,000 m2 of office space, it is a singularly attractive address for commercial enterprises and businesses. The creation of a public arcade has effectively integrated what used to be the isolated Hackenviertel district in the center of the city. The Hofstatt is operated by Hines Immobilien GmbH. Contact: +49 (0)89 14333650

• Stachus Arcades Following the virtual completion of this redevelopment in June 2011, the Stachus Arcades now stand out as a modern, well-lit shopping mall with a distinctive char-

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July 2018 acter – and as an architectural highlight in the heart of Munich. The arcades cur- rently comprise around 60 stores, cafés and restaurants covering a total of 8,000 m². ARGON GmbH took over as operator of the Stachus Arcades in July 2013. Contact: [email protected]

Local government's node strategy – an effective tool to control and cultivate growth

To keep dynamic growth in the city's retail landscape compatible with urban devel- opment in general, the City Council developed a coherent node-based strategy back in the 1970s. Reviewed and enhanced in 1999, this strategy was updated a second time in 2009 and complemented by a strategy for local supply stores. A key tenet of the strategy is a hierarchic structure consisting of urban district, sub- district and local shopping centers in which relevant retail offerings are to be loc- ated. Specialty store locations complement this arrangement with large stores that do not have to be located at the above nodes. Advice regarding locations is provided to prospective investors on the basis of this strategy.

The node strategy helps the city to avoid the inappropriate development of retail structures at greenfield sites, say, and thereby boosts the attraction of Munich as a retail venue while maintaining local residents' access to the shopping facilities they need. This node strategy is due to be updated in 2018. Detailed information on this node strategy is available (in German only) on the Internet at: www.muenchen.de (search: Zentrenkonzept).

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Key players in the city center

CityPartnerMünchen e.V. (CPM) Herzog-Wilhelm-Str. 15 80331 München Wolfgang Fischer Phone +49 (0)89 122 28 07 70 Fax +49 (0)89 122 28 07 99 mailto: [email protected] www.cp-muenchen.de

Founded in 2004, CityPartnerMünchen (CPM) set itself the task of preserving and improving the unique attraction of Munich's city center. Its mandate is to commu- nicate and market the potential afforded by the city center clearly and positively. Accordingly, CPM organizes and develops communication campaigns and bundles existing activities and initiatives.

CPM has set itself a number of ambitious goals:

• To continually improve the profile of Munich's city center as an inviting place to stay and spend time, as an attractive venue of international standing for culture and the arts, and as a location with an unparalleled variety of hotels, restaurants, shops and service facilities. • To communicate the image and identity of the city and showcase the city of Munich as a distinctive brand. • To raise satisfaction levels among customers and visitors. • To play a part in shaping the future of the city center, providing competent, fo- cused advice to the political community and the city's administrators, and serving as a hub of integration for key players in the city center.

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Further information

Handelsverband Bayern – Der Einzelhandel e.V. (HBE) (Bavarian Retail Association) Brienner Str. 45 80333 München Simone Streller Phone +49 (0)89 55118-112 Fax +49 (0)89 55118-114 mailto: [email protected] www.hv-bayern.de

The Bavarian Retail Association is the largest organization of its kind in Bavaria. Its membership comprises 20,000 companies of all kinds and across all segments. In its capacity as an employers' association, the HBE represents the interests of the Bavarian retail industry toward the government, other areas of the economy, the media and the general public. Its core competencies include general representation functions, collective wage/salary bargaining, legal counsel/legal representation on matters of labor law, and location policy.

Chamber of Skilled Crafts for Munich and Upper Bavaria (HWK) Max-Joseph-Str. 4 80333 München Stefan Burger Phone +49 (0)89 5119-247 Fax +49 (0)89 5119-295 mailto: [email protected] www.hwk-muenchen.de

The Chamber of Skilled Crafts (HWK) cultivates solidarity between all skilled craft organizations and ensures that their interests are represented professionally to both the government and the public at large. The chamber draws on its wealth of practical experience and in-depth expertise to offer made-to-measure advice to its members. Its portfolio covers every aspect of members' regular business activities.

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Chamber of Industry and Commerce for Munich and Upper Bavaria (IHK) Balanstr. 55-59 81541 München Georg Osterhammer Phone +49 (0)89 5116-1466 Fax +49 (0)89 5116-8341 mailto: [email protected] www.muenchen.ihk.de

The Chamber of Industry and Commerce (IHK) represents the interests of industri- al, trading and service companies with the aim of improving economic conditions for its members and for the economy as a whole. Its three core tasks are: to rep- resent its members' interests effectively; to provide valuable, relevant services; and to provide effective, practical support to the government.

City of Munich Department of Labor and Economic Development Herzog-Wilhelm-Str. 15 80331 München Ursula Grunert Phone +49 (0)89 233-22522 Fax +49 (0)89 233-27966 mailto: [email protected] www.muenchen.de/wirtschaft

The Development of Labor and Economic Development provides professional ser- vices and support to retail companies that are resident in Munich or are interested in setting up operations here. Its portfolio includes location/relocation advice, busi- ness startup support, the provision of information on suitable space and putting in- quirers in touch with the relevant authorities, chambers of commerce, associations and networks. The department also disseminates a wide range of information about Munich as a business location.

City of Munich Department of Urban Planning and Construction Urban Development Planning Blumenstr. 28b 80331 München

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Birgit Gessner Phone +49 (0)89 233-25248 Fax +49 (0)89 233-26410 mailto: [email protected] www.muenchen.de/rathaus/Stadtverwaltung/Referat-fuer-Stadtplanung-und- Bauordnung/Stadtentwicklung/Perspektive-Muenchen.html

The Department of Urban Planning and Construction is responsible for drafting the PERSPECTIVE MUNICH urban development strategy, formulating the goals of urban development in dialogue with the general public and submitting the out- comes to the City Council, which ultimately takes the decisions. The node strategy operated by the City of Munich is part of its overall urban development strategy.

Shoppingguide München More details of shopping highlights in Munich is featured on the City of Munich website, where you can also search for specific stores. In particular, you will find a wealth of information about fashion in Munich, as well as the background to specific stores such as former purveyors to the royal court: www.muenchen.de/shopping

Stadtteilmanagement Trudering Truderinger Str. 302 81825 München Phone +49 (0)89 45240746 mailto: [email protected] www.aktive-zentren-trudering.de contact: Katharina Fetzer, Christoph Heidenhain

Stadtteilmanagement Pasing Gleichmannstr. 5a 81241 München Phone +49 (0)89 55067133 Fax +49 (0)89 55067134 mailto: [email protected] www.aktive-zentren-pasing.de contact: Katrin Englert

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The City of Munich has been involved in the Active Urban and Urban District Centers program since 2009. The program aims to preserve and improve city centers and urban district centers as places where business and culture thrive and where people enjoy living and working. Information points have been set up at urban district management stores in two urban district centers, Pasing and Trudering.

Günther Rid Stiftung für den bayerischen Einzelhandel Theatinerstraße 47 80333 München Michaela Pichlbauer Phone: (089) 211012-03 Fax: (089) 211012-07 mailto: [email protected] www.rid-stiftung.de

For 30 years, the Rid Stiftung (foundation) has been providing free training and development programs to support retailers and intensive coaching programs to support medium-sized companies. Its current activities center around the forward- looking topics of innovation, cooperation and digitalization.

This sector information has been carefully researched and diligently compiled. Nevertheless, the City of Munich does not accept any liability or give any guarantee for the validity, accuracy and completeness of the information provided. Please direct any questions, comments or suggestions to: Britta Buck: mailto: [email protected], Phone +49 (0)89 233-22608

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