Berlin Super-Mall Traps Cash From Rising Tourist Trade

Berlin, Europes fastest-growing tourist destination, is taking a page from Dubais play book by expanding retail offerings for the hordes of visitors.

The Mall of Berlin, a 270-store complex that opened today in the city center, gives the growing numbers of tourists who visit the German capital a new place to spend their money. Within a year, its set to become the countrys largest shopping center as 30 percent more space is added.

Its not really a mall, but a whole new city quarter, said Andreas Kogge, head of Berlin retail leasing at Jones Lang LaSalle Inc. (JLL) The malls on the edge of the city will certainly suffer.

Berlin is expanding its retail offering after building dozens of hotels to keep pace with the influx of visitors. Like Dubai, the Persian Gulf sheikhdom that has the worlds biggest mall, Berlins growing reputation as a shopping destination is bolstering its economy.

The Mall of Berlin, located on the site of the former Wertheim department store a 5-minute walk from Potsdamer Platz, has about 100,000 square meters (1 million square feet) of shops in low-rise stone and glass townhouses that evoke the areas prewar architecture.

The developer, Harald Huth, plans to expand the mall by another 30,000 square meters next year and the complex will include 270 rental apartments centered around a running track and garden. The homes will be among Berlins most expensive, with rents as high as 25 euros a square meter.

This will be the most successful mall in Germany because we built something special at an extraordinary location, Huth said by phone. Tenants include Guess, Karl Lagerfeld and Lacoste.

Retail sales in the German capital climbed 4.7 percent in June from a year earlier, adjusted for inflation, according to the citys statistics office. That compared with a gain of 0.4 percent in the country as a whole.

Berlins economy expanded the most of all German states last year, after lagging behind the national average for more than a decade after reunification, helped by tourism, as overnight stays climbed 8.2 percent to 27 million. Visitors accounted for about a quarter of all retail spending, according to Berlins Retail Federation.

This is an investment for the future, Mayor Klaus Wowereit said last night at a gala event ahead of todays opening. The other mall operators are eyeing this one with concern. But this isnt about taking anything from anyone but about adding to Berlins growth.

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Berlin Super-Mall Traps Cash From Rising Tourist Trade