Cologne: Retail properties highly valued by investors
Demand for shop locations exceeds supply
Cologne's popularity to international investors is the result of a retail market that has been booming for years. With Hohen Straße and Schildergasse, Cologne has two of Germany's most-frequented pedestrian zones. Successful international chains in particular place the highest value on representative areas in the Domstadt, explains Comfort Managing Partner Jürgen Kreutz. Correspondingly, the market for retail area in the pedestrian zones around the cathedral is highly competitive.
Constantly increasing rental and property value levels
This struggle for areas that are expected to be free leads to constantly increasing rents. According to Comfort, average rents for smaller shop locations rose more than 9% from 2005 to 2006. Between 1999 and 2006, rents advanced around 18%. Last year, merchants had to figure on around €220/m² at a new leasing of a shop in a location with around 80 to 120 m² of sales area. The rental price for large areas (between 300 and 500 m²) lay at around €125/m². According to Kreutz, shop locations and business buildings will arrange for the large backlog of demand and rising rents and property values.
Monthly rent prices on the top shopping streets*
| Straße (“Street“) | ||
| Schildergasse | ||
| Hohe Straße | ||
| Mittelstraße | ||
| Ehrenstraße | ||
| Breite Straße |
*The rental prices at 1A sites apply to new rental agreement closings in 2006 and to a standardized, typically ideal (fictitious) shop location of 80 to 120 m² with at least a 6-m display window or, alternatively, a shop location with 300 to 500 m² of net sales area, at-grade and stair-free access, a rectangular layout, as well as a structural configuration of high quality.