Investment
Investors Focus Primarily on Local Suppliers
An important exception to this trend are properties with a pronounced potential for local supply. Supermarkets and retail parks with a strong catchment area and primarily shops for daily needs (food, drugstore, pharmacies,) are attractive purchase opportunities for numerous investors. Brokered by EHL, the biggest retail transaction of the year to date, the purchase of Pannonia Shopping Park Neusiedl by ERGO Versicherung, reflected this product profile precisely. Prime yields for shopping centres are around four percent, for retail parks around 4.75 percent (therefore generally higher than in the office or residential sector), though these figures are not currently substantiated by the relevant reference values due to the limited transaction activity.
In the record year of 2019, “only” 15 percent of the investment volume of just under EUR 6 billion was put into the retail segment, which slipped to third place behind office and residential. In the first half year of 2020 the figures fell to six percent, putting retail in merely fourth place, behind logistics. If the declining significance in 2019 was due primarily to a shortage of properties (few new developments and high-quality refurbishments), in 2020 it was the corona crisis that was unsettling for investors. As investors have been primarily seeking secure cash flows since the outbreak of the pandemic, the question remains what the long-term impact of the sudden rise in online revenue will be on brick-and-mortar retail, achievable yields and the demand for space, which is often a deal-breaker.
Prime Yields | Shopping Streets | Shopping Centres | Retail Parks
14
15
16
17
18
19
20*
* Forecast
Shopping streets
Shopping centres
Retail parks
Source: EHL Market Research | Q3 2020
Selected retail investment transactions 2019 | Q1 2020
Property
Size sqm
Location
Seller
Buyer
DIY
17,900 Lower Austria
Family office
Private investor
Mariahilfer Straße Pannonia Retail Park
2,387 Vienna
Private investor
Family office
8,166 Neusiedl am See Nuveen Real Estate
ERGO Versicherung
Hatric Q2
6,800 Hartberg 4,960 Stockerau
Rutter Immobilien Gruppe Union Investment
KAUFein Stockerau
Family office
Private investor
Source: EHL Market Research | Q3 2020
23
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