Interview with our retail experts Alexandra Meyder-Cyrus und Michael Bünnagel, both Co-Heads Retail and Center Management at Apleona Real Estate Management, in the Expo Real issue of "Handelsimmobilien Report" magazine.

Read the interview here:

Change is a part of retail

A conversation with Michael Bünnagel, Co-Head of Retail & Center Management, and Alexandra Meyder-Cyrus, Co-Head of Retail & Center Management at Apleona Real Estate Management, about the division’s new structure, its position within the group, the expansion of its activities, its low level of employee fluctuation, retail in the age of digitalization, and the real estate boom.

Handelsimmobilien Report: Organizationally speaking, what is the position of the Retail & Center Management division within the Apleona Group?

Alexandra Meyder-Cyrus: Our services for retail properties, specifically commercial and technical property management, center management and retail consulting, are bundled in the Retail & Center Management division. This division is allocated to the Real Estate Management unit within the Apleona Group.

HIR: What is the personnel structure within Retail & Center Management?

Meyder-Cyrus: We have a streamlined structure within Retail & Center Management. The co-heads, Michael Bünnagel and I, report directly to the management team. The heads of commercial property management and operational center management, who are responsible for operational management, report to us in turn.

HIR: How is the Retail & Center Management division structured, and how big is the retail workforce? How many branches of Apleona Real Estate Management also look after retail properties?

Michael Bünnagel: In the Retail & Center Management division, we have a central team in Düsseldorf covering all commercial functions. Our center management teams, comprising the center manager, the technical property manager and support center management, are located directly at the respective center. Our division currently has 53 employees: 17 at the head office in Düsseldorf and a further 36 across 14 center locations throughout Germany.

HIR: How has your company’s field of work changed?

Bünnagel: Our field of work has expanded even further in response to the challenges of the market. In addition to traditional shopping centers, more and more specialist retail centers have established themselves in Germany—an interesting area for us and one that we have addressed with our service range since 2015. On the customer side, we are now working with two major investment fund companies in this area. Depending on their location and size, specialist retail centers also need a center management team.

All in all, we manage almost one million square meters of retail space throughout Germany. Shopping centers account for around 450,000 square meters, with 550,000 square meters attributable to specialist retail centers and retail locations. In this year alone, our portfolio has expanded by 400,000 square meters as a result of new contracts.

HIR: Can you give a few examples of your high-profile properties?

Bünnagel: Most of our centers have been under our management for some years now. This includes the Stadtcenter in Düren and the Schlössle Galerie in Pforzheim. Our reference properties also include the Neumarkt Galerie in Cologne and the Rhein Berg Galerie in Bergisch Gladbach. Having supported a number of property sales, we are particularly proud of the fact that, in many cases, the new owners have been so satisfied with us that they have come on board as customers.

HIR: What are the benefits of having expanded your activities, and how are you handling this development in terms of human resources?

Meyder-Cyrus: The shopping center sector will not see any further dramatic growth. With the expansion of our services to include specialist retail centers, we have successfully established an additional pillar. As a result, not only has our team has grown in recent years but the development opportunities available to our employees have become even more varied. Employee fluctuation in our division is very low. Needless to say, this is something that pleases us and is also extremely important with a view to our customers, for whom we aim to be a reliable and constant point of contact.

HIR: What is currently the dominant topic when it comes to retail real estate in your area of activity? Revitalization? New concepts?

Bünnagel: As you are surely also observing, the number of new shopping center development projects in Germany is declining. Most of the existing centers are between 8 and 15 years of age or older. Given this fact, it is clear that demand for the modernization and refitting of shopping centers will continue to rise. We have adapted to this demand and the accompanying tasks and reorganized our retail consulting activities. In addition to location analysis, we offer concepts for center repositioning and revitalization.

HIR: How do your customers and the property owners feel about this topic? How much willingness is there to invest in existing properties?

Bünnagel: Obviously, our clients do not approve budgets for cost-intensive revitalization without first performing a careful analysis. We typically manage a center for many years. It is extremely important to us to continuously update our shopping centers. But the owners are also aware that a center needs to be modernized after around ten years.

This is planned in cooperation with us. Naturally, our clients also know that their centers are in permanent competition with other center locations. Visitors and customers of today’s centers have high expectations, so you have to make an effort to attract them to your center. But that has always been the way in retail.

HIR: Retail properties are being seen with more of a critical eye nowadays, not least due to online competition. What do you see as the arguments in favor of retail properties in general and shopping centers in particular?

Bünnagel: Online retail cannot be simply argued away. It is a part of the retail landscape and will continue to grow. However, we are certain that acceptance has its limits and that customers will continue to want to shop at physical stores. For us and our clients, this means centers must be analyzed even more carefully and tailored to the right customer clientele. Even more so than before, the shopping center of the future will be a place where people can meet and communicate in real life, take products in their hands, smell and taste the food, and enjoy or even be captivated by the decoration. All of the things the Internet cannot offer!

We are confident that people will continue to want to meet other people and shop together in the future. And we can create the ideal environment to give them what they need.

HIR: The real estate boom has been in progress for some time now. In what phase do you see the market at present?

Meyder-Cyrus: It is hard to say. From our perspective, the purchase prices for this property or that one have been too high. But we are also seeing that properties are being examined extremely closely ahead of the transactions and that purchases are being made with sound judgment.