German Prime Retail

Part 4. Who Invests in German Supermarkets — and What Each Buyer Knows

At the end of 2014, a long-standing client of ours lost a new supermarket in a Bavarian retail park to a bidder we had not expected. When we asked the seller who had won, the answer was two words: "Credit Suisse." A property fund run by the Swiss bank already owned the rest of the park. The episode taught us two things that still hold: German food-retail property is no longer a niche for local private landlords, and the bidder with the strongest reason to own an asset can outbid everyone else. Four distinct groups of buyers compete for the same stores — and each brings its own logic to the table.
Key takeaways
• Four groups compete for German food-retail property — institutional investors, the retailers themselves, developers holding stores for their own families, and private investors — and each prices by its own logic.
• Institutions came late because single supermarkets are small tickets; resilience through the financial crisis and the pandemic changed their view, and in 2025 they supplied well over half of the capital invested.
• Private investors with long horizons and little need for leverage remain the natural owners of single stores in the €3–20 million range — a market that broker statistics barely record.
• The bidder with the strongest reason to own an asset, such as the owner of the surrounding site, can outbid everyone else: knowing who else is bidding, and why, is part of pricing an asset correctly.

Small tickets kept institutions away; two stress tests brought them in

For years, insurers, pension funds and international property funds paid single German supermarkets little attention, and the reason was arithmetic, not doubt. Institutions manage large pools of capital and prefer assets that absorb it efficiently. When Blackstone sold The Squaire, the office and hotel complex at Frankfurt Airport, to a consortium led by Korea's Hana Financial Investment and London-based AGC Equity Partners in 2019, the price was around €1 billion — the value of roughly one hundred modern supermarkets at €10 million each. Buying one hundred stores one at a time, each with its own due diligence and notarial closing, takes far more work than buying one building.
Two stress tests changed the calculation: through the financial crisis and, above all, through the pandemic, German food retail kept trading and paying rent while offices emptied and shops closed. Specialist managers responded by assembling portfolios large enough for institutions to buy in one step. In August 2021, for example, GPEP acquired a portfolio of 51 food-retail properties from Patrizia: about 144,000 m² of space, more than €15 million of annual rent, roughly 98% let, with EDEKA stores alone providing about half the income — and most of the assets in small and mid-sized towns in western Germany. BNP Paribas Real Estate records the price at about €315 million — by our arithmetic, roughly 20 times the annual rent.
The trend held in 2025, when institutional investors supplied well over half of the capital invested in German food-retail property: investment and asset managers 33%, special funds 18%, closed-end funds 11%. Foreign buyers accounted for 51% of the volume in food stores and retail warehouses, up from 19% a year earlier, and 24 portfolios of food stores worth about €1.1 billion changed hands (BNP Paribas Real Estate). Such shares move quickly: in the first nine months of 2026, retail investment fell by a quarter and foreign buyers' share of it dropped to 31%, from 50% a year earlier.
The largest retail portfolio sale of 2026 so far went not to an institution but to a retailer: in the first quarter, Trei Real Estate sold the Powerfood portfolio — 37 food stores and food-anchored retail parks — to CEV Handelsimmobilien, the property company of the EDEKA group, for about €200 million (Cushman & Wakefield; BNP Paribas Real Estate).

The Credit Suisse lesson: the owner next door can outbid everyone

The store we lost in 2014 was the last piece of a retail park in Coburg, a prosperous district town in northern Bavaria: just under 18,000 m² of food, drugstore and DIY retail, extended that year. The park belonged to CS Euroreal, a German open-ended property fund managed by Credit Suisse. In June 2015 the fund sold it, as part of a €146.9 million package of three retail properties, to an institutional fund; in 2021 it changed hands again, to the Hahn Group.
The name impressed our clients at the time, but the full story is more instructive: CS Euroreal had suspended redemptions in 2010 and had been in orderly liquidation since May 2012 — it was winding down, not building a long-term position. Buying the last piece allowed it to sell the park whole, as it did the following June.
The lasting lesson is about price, not prestige: the owner of the surrounding site can pay more for the missing plot than any stand-alone investor, because a park in a single hand is worth more than the sum of its parts. The broader conclusion our clients drew — that German food-retail property had outgrown its niche among local landlords — still stands: both later sales of the park went to professionally managed funds. And many of those clients, entrepreneurs from across Europe and beyond, began buying such stores themselves.

Retailers shape the supply — and, in sale-and-leasebacks, the rent

Germany's food retailers take different views on owning their stores, and the difference determines what investors can buy. ALDI and Lidl own much of the real estate they trade from: ALDI Süd owned about 65% of its stores in 2023, according to Lebensmittel Zeitung, and that year bought a portfolio of 76 properties from Pimco for about €240 million (BNP Paribas Real Estate). The EDEKA group, whose stores are largely run by independent merchants, and the REWE group lease most of their supermarkets — in our experience the clear majority — from investors. That leasing model creates the market's supply of long-let, newly built full-range supermarkets.
Retailers also trade property in both directions. At the end of 2022 the EDEKA group — its property company CEV together with four regional companies — bought from the Hahn Group 13 retail parks whose main tenant was EDEKA, at an undisclosed price that BNP Paribas Real Estate puts at about €380 million; CEV added the Powerfood portfolio in 2026. They also sell — usually stores they occupy, to free capital for their core business. In 2024 corporates, most of them larger retailers, were the most active sellers of German food-retail property, at about €400 million; the best-known deal was Lidl's sale of 16 stores to Captiva for more than €100 million (BNP Paribas Real Estate).
For a buyer, a sale-and-leaseback differs from a new build in one respect: the retailer has chosen to stay, but it has also helped set the rent — and a seller that wants a high price can accept a high rent. Whether that rent is sustainable when the lease expires is the buyer's question, not the seller's.

Developers keep some of their best stores, so question every offer

The developers who build Germany's supermarkets (Part 3) sell most of their projects: in 2025 they supplied about 15% of the food-retail volume sold but only 4% of the volume bought (BNP Paribas Real Estate). Many owners of the leading development groups, however, keep a share of their best stores — built at cost, on prime sites — for themselves and their families, as a long-term, stable income independent of the cyclical development business. In downturns, when good assets are harder to sell at fair prices, developers hold them, collect the rent and return to the market later.
Their behaviour is both a signal and a warning. The signal: the people who know construction costs and locations best choose to own these assets. The warning: if developers keep a share of their best stores, the market sees the rest — so every store a developer offers deserves one question before any other: why is this one for sale?

Private investors compete hardest for single stores, which statistics barely record

Private investors — typically owners of industrial companies, technology businesses or trading groups from around the world — are the natural owners of single stores in the €3–20 million range. Unlike leveraged funds, many of them buy with little or no debt. Their horizon is long, often generational, and their objective is to preserve capital and let it grow modestly in a reliable jurisdiction, backed by tenants that are among the most resilient businesses in Europe.
They are also the buyers that market statistics capture least. Portfolios and large deals dominate broker data: family offices accounted for 4% of the capital invested in German food-retail property in 2024, and in 2025 private buyers did not appear as a separate group at all, while private investors supplied about 10% of the volume sold (BNP Paribas Real Estate). Their market is the single store — smaller tickets, fewer headlines and, in our experience, the keenest competition.
One of our British partners, formerly a senior Deutsche Bank executive in continental Europe and now chief executive of a London asset manager serving more than 160 ultra-high-net-worth families, describes the rationale this way: investing in prime German food-retail property is an investment not only in land and buildings in the best locations, but, through the lease, in the strength of Europe's most successful grocers — and for families concerned about preserving wealth across generations, few assets combine security and simplicity in the same way.
To date, none of the assets our clients have bought through us has lost its anchor tenant, and no anchor tenant has defaulted or reduced its rent — including during the pandemic. That record is no guarantee for the future, but it explains our clients' conviction.

Implications for investors

1. Map the other bidders before you set a price. Establish who else is bidding, and why: the owner of the surrounding site can pay more for the missing plot than any stand-alone investor.
2. Ask why a developer is selling. Developers keep a share of their best stores for their own families, so make "why is this one for sale?" the first question on every store a developer offers.
3. Test a sale-and-leaseback rent against the lease expiry. A retailer selling its own store has helped set the rent, and a seller that wants a high price can accept a high rent; judge whether that rent is sustainable when the lease expires.
Why the buyer mix matters for price: an asset's price reflects which group is most likely to buy it on exit. Institutions bid for portfolios and, when large portfolios are scarce, pay for scale; development costs anchor long-run values, because new building stops when prices fall below what it costs to build; retailers' decisions to own, lease, buy or sell and lease back shape supply; private investors compete hardest for single, long-let new stores.
Sources: The Squaire sale — Korea Times and Hengeler Mueller (2019); GPEP portfolio — cash-online, 19 August 2021, and BNP Paribas Real Estate deal records; BNP Paribas Real Estate, Grocery Investment Market Germany Q4 2024 and Q4 2025, Retail Investment Market Q2 and Q3 2026; Cushman & Wakefield MarketBeat Retail Investment Q2 2026 (Powerfood); CS Euroreal liquidation — fund liquidation report as at 30 April 2017; CS Euroreal sale — immobilienbusiness.ch, 24 June 2015; Hahn acquisition in Coburg — cash-online (2021); ALDI Süd ownership — Lebensmittel Zeitung, 17 February 2023; Gordon Real Estate Group client experience.
Photo: Jan-Philipp Thiele / Unsplash
This article is general information and not investment advice. Past performance of tenants or assets is no guarantee of future results.
2026-10-09 12:09