SPECIAL FEATURES OF LARGE-SCALE RETAIL PROPERTIES
Large-scale retail property has a number of special features, which distinguishes it from residential and office property. The Hahn Group has established itself as a specialist in the large-scale retail property market segment. The properties we are involved with are mainly large retail parks, hypermarkets, supermarkets and DIY stores.
Very scarce asset class
The development of large-scale retail property is based on very strict due diligence requirements. The German Land Use Ordinance (Baunutungszverordnung) states that only a limited number of hypermarkets, retail parks and supermarkets may be permitted per location. This means that the availability of attractive investment properties is limited. Consequently, regulated competition produces high demand, and properties developed in permitted locations hold their values well and enjoy stable rental incomes.
High demand level
The regulation of large-scale retail property development ensures that demand is correspondingly high on the tenant side.
|Hypermarkets/supermarkets ||> 1,500 sq m town centre/out-of-centre|
|DIY stores ||> 8,000 sq m out-of-centre|
|Retail warehouse agglomerations ||> 3,000 sq m town centre/out-of-centre|
|Retail parks||> 3,000 sq m town centre/out-of-centre|
|Shopping centres||> 3,000 sq m town centre/out-of-centre|
Long-term lease contracts
Due to the limited availability of properties, there is great interest from tenants to establish and make long term commitment to particular locations. Therefore, the typical market lease contract for large-scale retail property generally has a fixed contractual term of 10 to 15 years.
Strong covenant tenants
Principal tenants are predominantly leading internationally active retail companies and all have very good covenant strength. These include EDEKA, REWE, Kaufland, real, OBI and Hagebau.