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Retail market records strongest quarter in Q3 2026 – large-sclae lettings and the restructuring of shopping centres and department stores remain key drivers
Recent headlines surrounding the bricks-and-mortar retail sector highlight the complex supply and demand dynamics on the letting market. The Inditex Group is preparing to take space in Peek & Cloppenburg’s flagship ‘Weltstadthäuser’ stores, providing a further substantial boost to city-centre retail take-up. Meanwhile, a further increase in available space following Galeria’s latest bankrupcy cannot be ruled out. While this once again presents significant challenges for owners, landlords and cities, it also offers opportunities to accommodate new, sustainable retail concepts in city-centre locations. Increasingly common partnerships demonstrate that an existing tenant does not necessarily have to vacate its premises for another retailer to establish a presence, with these arrangements potentially generating valuable synergies. French sports retailer Decathlon is a case in point: alongside former Galeria department stores, it now occupies space within several MediaMarkt stores through partial lettings or subleases, with a similar arrangement soon to follow at IKEA in Hamburg-Altona. While one retailer now requires considerably less space than five or ten years ago, these arrangements enable another to access entirely new locations. Ideally, both retailers benefit, as does the city centre or shopping centre.
While these developments are positive from a letting perspective, they also highlight the problem of highstreet premises requiring several successive re-lettings within a short period. One example is the former Karstadt building on Frankfurt’s Zeil, initially taken over by Modehaus Aachener, which subsequently became insolvent. This was followed by Inditex brand Bershka and Asian supermarket Go Asia and in the future TK Maxx and C&A moving into the retail building after refurbishment. Bershka has meanwhile secured new premises at Skyline Plaza, while Go Asia has relocated to the former Depot store on Kaiserstraße. These lettings illustrate the rapid pace of change in the retail sector, both among incoming tenants and those vacating space. Depending on the city and the specific location, the key is to strike the right balance between securing a replacement retailer quickly and establishing a sustainable retail mix as part of the property’s repositioning. The length of the marketing period is generally the decisive factor. Past experience has clearly demonstrated that waiting for the right tenant or tenants can pay off.
At the beginning of 2026, it might have appeared that activity in the large-scale segment would gradually slow following the extensive re-letting processes of recent years. However, developments in the first nine months have shown otherwise. Alongside Galeria store closures, consolidation measures by major German retail players, notably C&A, Peek & Cloppenburg and Anson’s, are increasingly bringing substantial additional space to the market. Other drivers include the closure of large-format fashion stores, such as Wormland, and store downsizing to optimise retail networks, as seen at MediaMarktSaturn and IKEA. These developments directly affect the supply of space in city-centre locations and shopping centres. Against this backdrop, solid demand from international retailers is likely to be matched by a corresponding supply of available space towards year-end. From today’s perspective, full-year take-up is set to reach an above-average level. Nevertheless, new tenants will once again need to establish themselves in the highly competitive bricks-and-mortar retail market to avoid contributing to a further increase in vacancy.
State of data: Q3 2026
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