In our experience, commercial property management of a supermarket costs 2–4% of net rent plus 19% VAT; German valuation standards allow 3% of gross rent for management. On top of that, the owner bears the costs of the GmbH itself — about €8,000–12,000 a year for bookkeeping and tax reporting — and the upkeep of roof and structure (Dach und Fach). Together, in our experience, the non-recoverable costs of a new store with a modern lease come to 8–15% of net rent.
Management is several cost lines, not one rate
Managers' offers can be compared only line by line, once you have established what the fee includes: rent collection, the annual service-charge statement, technical oversight of the building, lease-renewal negotiations, disputes. Whatever it does not include, the owner pays for separately, along with the company's own costs.
Exhibit 1. On a property with €500,000 of rent a year, the manager is only one of five cost lines
Valuation standards set 3% for management and 4% for rent-loss risk
An independent benchmark comes from the German Property Valuation Ordinance (ImmoWertV). For commercial property it allows 3% of gross rent for management and 4% for the risk of lost rent. For a self-service store whose roof and structure the landlord maintains, the maintenance allowance is half the residential one: €5.85 per m² a year at 2021 prices, indexed annually to the consumer price index (Annex 3).
These are model figures for valuers, not a price list. But they show how much of the rent a professional buyer deducts before naming a price (see Part 10 of the series German Prime Retail).
Management costs pass to the tenant only if the lease names them
In a commercial lease, management costs can be charged to the tenant if the lease names them clearly. The Federal Court of Justice upheld even a standard clause on "the costs of commercial and technical property management" that stated no amount (BGH, judgment of 9 December 2009, XII ZR 109/08). A reference to the list of operating costs is not enough: management and repair costs fall outside the definition of operating costs itself (§ 1(2) BetrKV).
Only the specific lease shows whether such a clause exists: two stores of the same retailer can allocate costs differently (Part 10). The GmbH reclaims the VAT on the manager's fee as input tax if it opts to charge VAT on the rent — standard practice for supermarkets (Part 11).
A manager needs no licence, so the owner must check quality
A licence under § 34c GewO is required only for managers of residential property — the common property of flat owners and residential leases (§ 34c(1) sentence 1 no. 4 GewO). Managing a supermarket requires no special licence. The owner therefore has to check references, professional indemnity insurance and the scope of reporting. A good manager pays for itself by tracking indexation thresholds, asserting warranty claims in time and preparing the annual service-charge statement (Part 10).
Implications for investors
1. Count all non-recoverable costs, not just the manager's rate. In our experience, for a new store with a modern lease they come to 8–15% of net rent.
2. Check whether the lease passes management costs to the tenant. It must name them clearly: a reference to the list of operating costs is not enough.
3. Choose a manager by references and reporting, not by licence. Managing a supermarket requires no licence, so the owner must check professional indemnity insurance and the scope of reporting.
What to check:
• what the manager's fee includes and what is billed separately: technical oversight, lease negotiations, disputes;
• the base of the rate — net or gross rent — and the minimum fee a year;
• whether the tenant reimburses management costs under the lease;
• the scope and frequency of reporting, and the monitoring of indexation and warranty periods;
• the length of the management contract and how it can be terminated.
See also: What is a double net lease? · What yield does a supermarket in Germany deliver? · What taxes does a property-owning GmbH pay? · Part 10 of the series German Prime Retail
Sources: ImmoWertV, Annex 3 (model operating-cost allowances); GewO § 34c(1) sentence 1 no. 4; BetrKV § 1(2); BGH, judgment of 9 December 2009, XII ZR 109/08; German Prime Retail series, Parts 10 and 11; Gordon Real Estate Group experience, October 2026.
Photo: Jan-Philipp Thiele / Unsplash
This page is general information and not investment, legal or tax advice.