RETAIL REAL ESTATE - SUCCESS IN TIMES OF COVID-19
Food retailing is not the only retail segment to grow in Germany in recent months. DIY, furniture and home decor suppliers have enjoyed recent success as well. Given that everyone is spending more time at home, many people are also looking to do home improvements or make their space more homely. That means some providers are even managing to expand during the pandemic. YellowKorner, for example, an international provider of art photography, secured retail space at a top location in Hamburg after only a few months of looking. The special thing about the deal is that everything was done digitally, from inspection and negotiations to signing!
Retail - a digital rental-story
Lasse-Bo Fries, Director Retail Advisory, has had his eye on the property at Gerhofstraße 2 - 8 in Hamburg for some time and therefore suggested it to YellowKorner, among others, as a good rental option. Co-founder Paul-Antoine Briat was enthusiastic about the property right away, but traveling was not an option for him due to Covid-19. "Instead of postponing or even terminating the negotiations, we chose the path of digitalization," says Jens Wehmhöner, Senior Director Pan-European Retail. The team held online conferences and recorded 360-degree videos so that they could at least convey a feeling for the location and the room digitally. Jens Wehmhöner comments, "Virtual 360-degree tours are standard practice in the office segment, but not yet as well established in the retail sector.” In order to be able to effectively show the location, the two retail experts toured around Hamburg’s city centre with smartphones and tablets.
"We spent an hour and a half showing the locations around the new store via video call so that Paul-Antoine Briat could get an impression of how busy the streets are and what other offers and brands are located nearby"
The YellowKorner co-founder was pleased with both the location and the property. A few days after the digital tour, however, further questions arose, including questions about the location and accessibility of the ancillary areas. The team took more photos and videos, held another video call and were able to answer all of the future tenant’s questions!
The team then presented the art photography provider’s retail concept to the owner of the property and arranged a meeting between the two parties, which was also held digitally.
Faster business thanks to digital options?
Lasse-Bo Fries is not likely to forget the negotiations any time soon. "Briat was on vacation in Greece. He presented the concept, confidently answered all of the questions and finalized the negotiations, all while wearing a wetsuit.” The rental agreement was sent out by e-mail shortly thereafter; it was almost old-fashioned.
"It took about four months to complete the deal from start to finish. Quite remarkable when you consider that we’re talking about a tenant leasing 120 sqm for five years without ever having been on site"
So, what do the two retail experts think? Will we be seeing deals concluded digitally more often in the future? "We are very satisfied. The speed of the transaction made it possible for us to re-let the space without any vacancies," says Lasse-Bo Fries. Jens Wehmhöner adds, "We spent less time on coordination and left a good ecological footprint because no one had to travel.
However, despite the time saved and the other advantages mentioned, the experts are not yet completely convinced of the digital process. "Not all customers are ready to take a fully digital path. We were fortunate that both the tenant and the landlord recognized the necessity of these measures given the situation and placed their trust in us," concludes Lasse-Bo Fries.
YellowKorner was so satisfied with the digital process that the company is currently planning to view other stores in Germany and in other European countries digitally. "The process has also enabled us to promote Nuremberg as a location," summarizes Jens Wehmhöner.