HDE: Landlords should make concessions to stores on rents

Real estate - HDE: Landlords should make concessions to stores on rents

The German Retail Association(HDE) is calling on property owners to be more accommodating when it comes to store rents. "At the moment, rents do not reflect what the market is able to pay," HDE President Alexander von Preen told the German Press Agency in Heilbronn.

This applies to bricks-and-mortar retail as well as to culture, cabaret and gastronomy. The landlords would have to take a step towards these players and reduce the rent level to a level appropriate to the current situation.

"The fact that rents are only going up is over. Premises must be let on terms that are compatible with a retail concept," said von Preen, who is also the head of Intersport Germany. He called on landlords to work together with retailers on new concepts. "And now, and not just when the stores are threatened with closure."

Talking about creative framework conditions

This is already being practiced in insolvency proceedings. "If the business model is viable for the future, rent is also discussed with the landlords, among other things. And this is usually agreed to be lower, not higher," said von Preen. "My petition would be: don't let it get that far, but talk about creative framework conditions beforehand."

In the past year, well-known chains have repeatedly pulled out of German high streets, either in part or in full. Many small stores also gave up: The HDE had earlier predicted in 2023 that around 9000 stores could close their doors for good. In a normal pre-crisis year, there were always around 5000 stores. If the forecast is confirmed, 311,000 stores will remain nationwide, apart from very small businesses. In comparison: in 2015 there were still almost 373,000.

HDE President: Revitalization of the cities

According to the HDE President, there should also be a guideline on the topic in the coming year. The content is the successful partnership between the various players in German city centers. Von Preen also considered so-called turnover rents to be practicable. In addition to a basic amount, tenants pay a certain proportion of the turnover generated in the rental property to the landlord.

The HDE President, however, rejected state regulations. He hoped that landlords and tenants would find solutions on an equal footing, said von Preen. If this succeeds, a flourishing city will also be possible in the future.

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1. The German Trade Association (HDE) advocates for landlords to provide concessions on rents for retail stores, including those in culture, cabaret, and gastronomy, in Heilbronn, as stated by HDE President Alexander von Preen to the German Press Agency.
2. According to von Preen, the increase in rents is no longer sustainable, and premises should be rented at a level applicable to the current situation, encouraging landlords and retailers to collaborate on new concepts.
3. In challenging economic circumstances, insolvency proceedings have demonstrated that rent negotiations can lead to lower rents, motivating von Preen to propose discussing creative framework conditions beforehand to avoid insolvency.
4. In 2023, the HDE predicted the closure of around 9000 stores due to the ongoing impact of the crisis, leaving around 311,000 retail stores across Germany.
5. Von Preen suggested that a guideline for successful partnerships between various city players should be established in the coming year, emphasizing the practicality of turnover rents while opposing state regulations.
6. If landlords and tenants can work together to create viable solutions, a flourishing city can be achieved, as asserted by the HDE President.

Source: www.stern.de