BERLIN-German retail warehouses are becoming a promising asset class, and stable consumption and solid retail sales mean the segment is attracting more international investors, according to BNP Paribas Real Estate.

“Between 2005 and 2007 private and institutional investors’ demand was already concentrating on the sector, boosting prices to new heights,” said the firm’s Andrew Cruickshank in a new report. “Prices had to be scaled down after the retreat of international investors, but interest in these properties is distinctly growing.”

German retail is characterized by a large presence of discounters; they already hold 40% market share in food, and the phenomenon is spreading to other sectors so that margins are among the slimmest in Europe. “Consumers surging to discounters forces German retail to restructure,” said Cruickshank. Hardware stores will be affected soon."