What: The upcoming closure of 16 Galeria stores will release approximately 500,000 square meters of prime retail space onto the German market.

Why it is important: his significant increase in available retail space could dramatically alter the dynamics of the German retail real estate market, providing new opportunities for redevelopment and leasing. BNP Paribas Real Estate notes that such large-scale releases of space could drive increased rental activity and lead to a transformation in how these prime locations are utilized, potentially moving beyond traditional retail uses.

BNP Paribas Real Estate has highlighted the potential impact of Galeria Karstadt Kaufhof's decision to close 16 of its stores by the end of August. This move will introduce around 500,000 square meters of retail space to the market, an amount just shy of the total space uptake recorded last year. The closures are expected to invigorate the German retail real estate market, echoing the lease dynamics seen in 2023 when former Galeria properties significantly contributed to rental activity in city centers. However, the future of this newly available space may diversify beyond traditional retail, as cities and developers show increasing interest in repurposing these prime locations.

BNP Paribas: Galeria closures flush over 500,000 m² onto the rental market