What future for the properties of the bankrupt German retailers?

The German media has been dealing with the industry’s concerns of what will become of the venues of the department stores affected by the insolvency of country’s leading department store group, Arcandor.
Analyst Karsten Burbach of CBRE said that there is “simply no demand” for retail venues of this size in inner city locations. Hubertus Kobe of DTZ differentiates by dividing the well over 90 department stores of Arcandor and the high street portfolio into three categories. “These include about five sites in top locations, including KaDeWe, Alsterhaus and Oberpollinger, which will remain in business no matter what, then another 30 to 40 branches between 'fair to barely tolerable', and 30 to 40 that hardly stand a chance. Rivals such as Metro can now go cherry-picking if they feel like it… Revitalising and restructuring a department store will easily cost 3,000 to 4,000 Euros per square metre in retail space, with 'the financing a limiting factor' in the ongoing crisis."
In the eyes of Matthias Böning, CEO of the Essen-based shopping centre operator mfi, any review of a given department store location prior to a decision about its future use potential must be undertaken in two steps: “The first step must involve an analysis of typical retail benchmarks such as footfall, spending power, market and competitive situation,” he said. “If the review reveals that the location principally has a retail potential with a view to these aspects, the next step will include identifying possible formats for the location.”
More often than not, the locations are too small to set up shopping centres. An mfi analysis of the former Hertie sites showed that no more than 10% are suitable for shopping centres.
(source: German Real Estate News)