Retail trade
The Hannover Region is one of the highest-turnover retail locations in Germany. Retail sales of around EUR 8.73 billion are expected for 2025, which corresponds to an increase of EUR 160 million compared to the previous year.
Hannover's prime locations - Georgstraße, Große Packhofstraße, Bahnhofstraße and Karmarschstraße - are reliably attracting customers back to the city center after a number of difficult years. In the surrounding area, retail agglomerations, shopping centers, city district locations and attractive city centers characterize the retail offering.
Market sentiment and trends
The overall stable footfall data for Hannover remains at a high level. For 2024 and the first half of 2025, the data shows that the continuing weak propensity to spend among consumers is causing only slight fluctuations in visitor numbers in Hannover city center. The first half of 2025 is roughly on a par with the previous year. In a year-on-year comparison, footfall in 2024 is still around 2.2% below the pre-coronavirus level of 2019, but has increased by around 4.0% compared to 2023.
According to market participants, the positive trend is also evident in lettings in Hannover's city center locations. The pre-coronavirus level was already exceeded again in 2022 and 2023. Around 4,600 sqm were let in 2024 as a whole. By the middle of 2025, market participants were already able to track take-up of around 5,700 sqm.
However, rising footfall and higher take-up can only improve the still very tense and difficult situation in the bricks-and-mortar retail sector to a limited extent. Despite high footfall and positive movement in retail occupancy, many retailers are facing the challenge of not only attracting customers to their stores, but also sustainably increasing their sales.
Prime rents under pressure
Although the decline in rents estimated as achievable in prime locations is still rather moderate, a renewed downward trend in prime rents for retail space is evident. At the end of 2023, achievable prime rents (for 100 sqm in prime locations) settled at around EUR 160 per sqm and remained stable in 2024. For the current year, market participants expect a decline to EUR 150 per sqm.
It can still be observed that the location areas in which this prime rent can be realized are shrinking. Significant rent reductions are to be expected outside the absolute top locations.
By contrast, retail warehouse locations with a focus on food retail outside the city center are very stable and have only low vacancy rates. City district locations and integrated retail locations in the surrounding area have benefited from their proximity to customers and their function as local suppliers, not least during the coronavirus pandemic.
Investment market environment
Net initial yields are stabilizing and the retail sector appears to be the most dynamic asset class on the investment market in the Hannover Region in the second half of 2025. Several large transactions have already taken place, including the sale of the Leine Center in Laatzen and the former Galeria Kaufhof at the Marktkirche. In the latter case, it is likely that the new owner will also aim to convert it into a mixed-use property and that the proportion of space for retail and gastronomy will decrease significantly.
According to the current forecast, the realizable prime yield for a commercial building in a prime location will rise to around 4.8 % over the course of the year and to 5.5 % for retail warehouse locations - an increase of 10 basis points in each case.
Outlook: Structural changes in the city center
The pressure on the retail sector is increasing, and not just recently due to many insolvencies and rising vacancy rates. Industry experts and local market participants have long agreed that the city centers in the city and region of Hanover are facing far-reaching structural and strategic changes.
In recent decades, city centres have been dominated by retail. A future-oriented development of city center locations will have the task of seeing change as an opportunity and creating space for new uses, concepts and ideas.
In the future, multifunctional inner city concepts will be required: Housing, culture, gastronomy, quality of stay, accessibility by public transport or bicycle and services alongside retail will gain in importance as development components.
This transformation will be a slow and challenging development process that requires patience, capital and the will to shape the future from everyone involved and has not yet been recognized and accepted by all inner city stakeholders.
Hanover city center: conversion in several places
The challenges for the bricks-and-mortar retail sector and, with it, for city centers remain diverse. There are good reasons to believe that the retail and service sector will master the current phase through adaptability, determination and new concepts.
The high footfall in Hanover's city center shows that city center locations remain attractive despite the crisis in the retail sector. There is potential here that can be leveraged by implementing new concepts and ideas.
Hanover is currently investing heavily in the transformation of its city center to make it sustainable, vibrant and climate-friendly. The aim is to strengthen the retail sector, improve the quality of life and further develop the city center as an urban living space.
Central conversion projects are currently underway in Schillerstraße and Prinzenstraße. In addition, measures are planned at Steintor and Opernplatz as well as on the Thielenplatz-Joachimstraße-Ernst-August-Platz-Hauptbahnhof axis. A master plan has been launched for the northern station area around Raschplatz and the connection to Lister Meile. Plans are also taking shape for the inner-city UrbanQ district at the transition to Nordstadt.
Outlook for the retail landscape
The ongoing and in some cases imminent vacancy in another large property in the city center should not obscure the fact that the sector strategy in retail is currently shifting: instead of defensive consolidation, some retailers are once again focusing on more offensive growth. What is remarkable here is a phenomenon that illustrates the complexity of the current market situation: while various retail sectors are experiencing declining sales overall, a large number of individual companies are succeeding in making targeted investments in their store networks and concepts.
Examples include the sale and repositioning of Mäntelhaus Kaiser under the new Austrian owner Peter Graf, the second location of designer furniture provider smow on Schmiedestrasse and the now completed refurbishment of Galerie Luise by the Hamburg-based Momeni Group. Well-known international labels such as Stradivarius, ONLY and Urban Outfitters have also repositioned themselves in the city center or entered the market for the first time.
This development is complemented by other smaller new openings and relocations in the city center's prime locations. These include the Swiss chocolate manufacturer Läderach in the Kröpcke Center and new gastronomic openings such as Cinnamood in Große Packhofstraße and Peter Pane in Georgstraße.
This divergence between sector and company trends shows that successful differentiation and positioning in the retail sector can be more decisive than ever for business success.