At the EXPO Real trade fair yesterday (October 4, 2010), Sonae Sierra, the international specialist for shopping centers, and the GMA Gesellschaft für Markt- und Absatzforschung mbH presented the results of their joint survey 'Shopping center revitalizations in Germany'.
If the whole of the revitalization potential were realized this would mean investments of between 5.2 billion and 7.8 billion. But Sonae Sierra and GMA assume that the actual investment will turn out to be much smaller and over the next three years is likely to be somewhere between 2.5 billion and 3.5 billion. Experts advise revitalizing shopping centers every 10 years at the most if a site is to continue to compete successfully in the market, fulfill its tenants and clients needs, and sustain or evolve its market value.
Given the high level of need for modernization in German shopping centers - after all more than 70% of these centers were built before 2000 - Sonae Sierra wants to expand its portfolio of services to include carrying out refurbishments on centers owned by third parties. This decision is in line with Sonae Sierra's strategy to continue to develop, manage and own shopping centers for its own portfolio, and also to provide individual services for other owners.
"There is a pent-up demand for investment in revitalizing shopping centers in Germany," said Thomas Binder, Managing Director Responsible for Sonae Sierra Developments in Germany.
"The need for modernization is huge. But there are many things which delay it in practice. A low level of awareness, but also a lack of financial capacity, deficient know-how or unfavorable ownership conditions are reasons for not following through with a revitalization. As the international specialist for shopping centers Sonae Sierra has many years of experience and deep and wide-ranging expertise in the area, recognized by several awards in this specific area, which owners can rely on to see the planned revitalization of a center through successfully. With our expertise we are the ideal partner for carrying out such revitalizations."
"Delaying modernization can bring many negative effects with it. Not just the tenants, customers, local retailers and investors suffer from centers with poor performance, but also in the context of growing competition between cities and regions, a shopping center with poor attractiveness is a clear competitive disadvantage. Retailers have to adapt rapidly to changes in customer demands, the same of course is true of the commercial property market. With a well-timed revitalization centers remain up-to-date and are important investments in the future," said Raimund Ellrott, member of the GMA Management Board.