West Berlin Back in Style as Fashion Brands Abandon the East
West Berlin’s Kurfuerstendamm, the city’s answer to Paris’s Avenue des Champs Elysees, is in fashion for the first time since Germany’s reunification as luxury brands snub the east, pushing rents higher.
Apple Inc. (AAPL) may be the next company to appear on the 4 kilometer (2.5 mile) boulevard known as Ku’damm, in the capital’s most expensive shopping district. The iPhone maker will open a store there, its first in the German capital, this year, a person with knowledge of the plan said. The person asked not to be identified because the information is private.
The decision by fashion brands such as Hermes and Louis Vuitton (MC) to focus on west Berlin has shifted attention away from Friedrichstrasse, the eastern strip that attracted most retail investment after the fall of the Berlin Wall in 1989. That helped rents for the best space on Ku’damm to climb the most in 15 years in 2012, an increase that was more than twice the rate for Munich’s top shopping street, CBRE Group Inc. (CBG) estimates.
“Berlin’s west has always been important louis vuitton copy bags uk , but the east was new and waiting to be discovered,” said Andreas replica louis vuitton bags Malich, head of Berlin retail leasing at broker CBRE. “For a long time, nobody knew which way the old lady of the west would go.”
Apple’s new store will be at a former movie theater at Ku’damm 26, fake designer bags across from the Hard Rock Cafe, Perfect Quality Louis Vuitton Replica the people said. The building has a facade resembling a Greek temple, in contrast to the modern structures that dominate Friedrichstrasse. Alan Hely, a London based spokesman for the company, declined to comment on plans for a Berlin store.
Ku’damm has had Berlin’s biggest concentration of luxury shops since the 1920s. Kaufhaus des Westens, the city’s most famous department store, is also nearby, on Tauentzienstrasse. The store, known as KaDeWe, is cited by David Bowie in a new song about his memories of living in the city during the 1970s.
Foreign investors are trying to profit from the west’s revival by acquiring some of its most prestigious properties. In October, Axa Investment Managers SA and Norway’s sovereign wealth fund agreed to buy Neues Kranzler Eck, a retail and office complex on Ku’damm, for high quality replica handbags china about 380 million euros ($511 million).
Last month, Austrian real estate company Signa Holding agreed to acquire KaDeWe itself in a 1.1 billion euro deal that also included 16 other German shops. Signa already owns Oberpollinger cheap louis vuitton bags from china , Munich’s oldest department store.
Those two deals contributed to a seven fold increase in the volume of commercial property investments in the area around Ku’damm last year to 1.05 billion euros, according to data compiled by broker Jones Lang LaSalle Inc. (JLL) During that time, yields on those investments dropped to 4.5 percent from 4.75 replica louis vuitton bags percent, indicating a gain in prices.
The demise of communist East Germany after 40 years transformed a city divided by a wall and rival political and economic systems that had split Europe since the 1:1 replica handbags end of World War II. Thousands moved to the east part of the city as developers razed neglected and war damaged ruins to build shopping malls, glass skyscrapers and multiplex cinemas.
Louis Vuitton, a unit of LVMH Moet Hennessy Louis Vuitton SA, and Hermes International SCA each opened a branch on Friedrichstrasse, a street that was almost completely rebuilt during the 1990s. They were joined by Bang Olufsen (BO), the luxury stereo maker, and Audi, which opened a car showroom.
Other retailers preferred Alexanderplatz, home of the city’s largest mall, or Potsdamer Platz, a futuristic collection of skyscrapers built on the former death strip where East Germans had been shot trying to escape.
Now the tide is high quality designer replica handbags turning, with the west getting a makeover as the east loses some of its new frontier allure.
“For some people, the east was too clean and too new,” said Thomas Hohwieler, head of German real estate at developer Strabag SE. (STR) “You want a city that’s evolved naturally, that’s not just all gloss.”
Hermes (RMS) left Friedrichstrasse in 2010 and opened a branch in KaDeWe to add to a refurbished store on Ku’damm. Louis Vuitton followed the same strategy, closing its Friedrichstrasse shop last year. Audi AG (NSU) and Bang Olufsen A/S have Designer Louis Vuitton Replica Handbags also moved away from the street in the eastern Mitte neighborhood.
“Our customers in the west are more loyal than those in the eastern part of the city,” Hermes said at replica louis vuitton the time, according to Berliner Morgenpost. clothing chain Forever 21 Inc. and Mulberry Group Plc (MUL), a British luxury handbag maker, have chosen west Berlin for their first stores in the city. Forever 21 plans to open a shop on Tauentzienstrasse, where there’s a higher concentration of affordable chains such as Hennes Mauritz AB (HMB) and Foot Locker Inc. (FL) than Ku’damm.
More pedestrians walk on Ku’damm and Tauentzienstrasse than on any other streets in Berlin, according to data compiled by Jones Lang LaSalle.
“It’s one of the most sought after retail destinations in the country,” said Linda Chang, global marketing director at Forever 21.
The influx of young Germans to east Berlin raised the local population’s purchasing power significantly. Even so, residents of Charlottenburg to the west are wealthier than those in Mitte, with an average monthly net income of 1,675 euros per month compared with 1,475 euros, according to the Berlin Brandenburg Statistics Office.
Retail rents are also higher in the west. The monthly cost of leasing retail space on Ku’damm climbed 14 percent last year to an average of 230 euros a square meter, according to data compiled by CBRE. Rents on Friedrichstrasse were little changed at 150 euros in 2012, the broker estimates, while those on Munich’s Kaufingerstrasse, by comparison https://www.dolabuy.su/ , climbed 6.5 percent to 330 euros a square meter.
“The demand for space has become a lot more international,” said Uwe Timm, whose company manages the Discount Replica Louis Vuitton Bags Europa Center mall, just off the eastern end of Ku’damm. New leases for space in the building have risen 19 percent since 2010, he said. Claire’s Boutiques Inc. and Adidas AG are among the retailers that became tenants last year.
As the city’s west rebounds, the area around the Zoologischer Garten railway station best known as the setting for the aaa replica designer handbags film Christiane F. about young heroin addicts in the 1970s is undergoing a radical facelift.