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Developers urged to look to less well known German cities by market research report

Places such as Fürth, Leverkusen, Offenbach, Mülheim an der Ruhr and Neuss that are located on the ‘hip’ of the larger cities of Nuremberg, Cologne, Frankfurt, Essen and Düsseldorf, have impressively robust drawing power in terms of development, according to a report from GfK GeoMarketing.
They may be considered the underdog compared with their well known rivals but they have noteworthy characteristics which developers should take note of.
‘They don’t simply possess the charm of the underappreciated. Rather, the facts show that these cities often have attractive location characteristics, significant untapped potential and deserve a better image in the eye of the public,’ said Wilfried Weisenberger, head of GfK GeoMarketing’s public authority and retail consultancy division.
They could be of particular interest to retail property investors, the report says, as they have considerable space and usually a substantially less developed city centre as a result of significant competition posed by the neighbouring city. So rents are lower and more enticing to business.
‘Thanks to their greater concentration of older buildings, Hip cities also provide more affordable housing than their larger neighbours. In addition, Hip cities play host to some truly unique cultural offerings,’ said Weisenberger.
‘Far from being locations disadvantaged in some way, hip cities provide significant opportunities. Hip cities should embrace their strengths and strive to communicate with one another more effectively. The reality is that hip cities offer attractive commercial and cultural conditions that can offer prosperity amidst the shadows of their larger neighbours,’ he added.
The report also says that these Hip cities tend to be more affluent than other cities of a similar size and boast more available retail space. As such, almost all fall among the top ten with regard to retail purchasing power.
‘Hip cities not only contribute purchasing power to the larger neighbouring cities but they also possess their own potential that retail can creatively tap,’ said Weisenberger.
The sheer size of their larger neighbours often relegates Hip cities to the status of de facto satellite locations, a fact often lamented by residents, but this also positions them quite favourably with regard to retail opportunities, Weisenberger added.
‘For example, retailers must often pay three times as much for rent in the larger cities that border Hip cities. Also, Hip cities offer more available retail space, making them ideal testing grounds for well conceived, market driven retail concepts,’ the report says.
‘Large retail parks have already realized the advantages offered by Hip cities. These retail developments target the potential offered by the populous neighbouring cities and their drawing power in the broader region,’ it adds.