MAPIC Artikel: Bringing Locations back to life

Redeveloping and valuing retail properties is a multifaceted process designed to enhance a property’s value and appeal to both retailers and customers. Let’s explore key elements of this process here, from analyses, cost considerations to factors that drive success and beyond.

Shopping centers play a central role in the modern retail landscape and are important places for social interaction. But over time, they can lose their appeal and thus also their value. A great many different factors contribute to this development. Among them are changes in consumer behavior, but also changes in the tenant market. In some cases, several tenants have new demands regarding the size requirements for their rental space or have left the market altogether.

Online retailing has also shown that shopping centers can no longer be pure “shopping machines.” The convenience of shopping directly from the sofa or any place and at any time has dramatically changed consumers’ shopping behavior. Shopping has become a part of leisure time where people want to have fun, which can be integrated into other leisure activities and where, if possible, everything is available under one roof.

Therefore, today, it is appropriate to offer more choices and opportunities in a shopping center. Also, through diverse uses such as leisure and entertainment, residential, urban services, offices, and health and wellness offerings, among others. A shopping center today is more than just a property for shopping; if it wants to be successful, it must live the mixed-use idea with various services and offers.

ASPECTS OF THE REVITALIZATION PROCESS

The cost of revitalizing a retail property can vary depending on the scope of the measures. Modernizing interiors, creating more attractive shopping areas, integrating new retail concepts, and improving infrastructure may be costly. Setting a realistic budget and evaluating the costs of the expected increase in value is essential.

The detailed planning of such revitalizations, conversions, or repositionings is critical to adapt to the market conditions. Nowadays, more and more shopping centers are being restructured into mixed-use properties. Special issues must be considered: Where is there space in the property to build office space? For example where can I bring daylight into the building? How do I implement this statically, or how must the technical systems/building services be adapted? What must be considered structurally? Are my permits sufficient, or do I need new and adapted official approvals? What bearing loads do I have available, and what additional loads do I need? Where will the delivery take place?

How do the opening hours have to be adapted? This is especially important for leisure and entertainment concepts – since in some countries in Europe there is no Sunday trading. Thes concepts profit above all from evening and weekend visits. Where do I create access for these providers? How can the issues of security, fire protection be solved and also how can the service charge costs be divided up fairly?

The revitalization process comprises of a variety of steps that must be carefully planned and coordinated. These include developing a concept for revitalization, selecting the right partners and service providers, implementing the measures, and monitoring progress. Close cooperation with architects, construction companies, and other experts is crucial to achieve the desired results.

ANALYSIS AND EVALUATION OF THE STATUS QUO

Before the revitalization of a shopping center can begin, a comprehensive analysis of its current condition is necessary.

STEPS TOWARD REVITALIZATION

1. Concept development: Based on the analysis, revitalization concepts are developed. These can range from structural changes and modernization to repositioning the shopping center.
2. Investment planning: The costs of revitalization are of central importance. Here, the structural aspects are considered: marketing measures, events, and technology integration.
3. Structural modernization: Renovation of facades, redesign of interior areas, integration of smart technologies, and creation of attractive common areas are possible steps.
4. Optimize tenant structure: Selecting the right tenants to enrich the shopping experience is critical. Pop-up stores, local vendors, and innovative brands can increase diversity.
5. Create an experience: Creating experiences, events, and activities can turn the mall into a social gathering place that goes beyond just shopping.
6. Integrate sustainability: Sustainability aspects such as green energy, recycling, and environmentally friendly issues are becoming increasingly crucial for banks, investors, and customers.

COSTS AND BENEFITS

Revitalization costs can be considerable, depending on the size of the shopping center and the planned measures. Nevertheless, these costs should be in proportion to the expected benefits. Successful revitalization can lead to higher rental income, increase visitor frequency, and raise the property’s overall value. Shopping center revitalization requires a holistic approach considering structural and strategic aspects. Creating an engaging, experiential, and sustainable shopping environment where customers enjoy spending time is critical to increasing economic value. By working with various partners and careful planning, a successful revitalization can benefit both owners and customers.

ROI

The ROI for leisure and entertainment concepts is often not measured by rental income but rather by their ability to attract more customers to the center. These customers also shop at other stores, boosting sales and potentially attracting new brands to the location.

HBB consistently develops a tailored ‚Unique Place Strategy‘ for each property. Our focus has always been on creating distinctive projects rather than generic, off-theshelf solutions. As a company, we dedicate significant time and effort to analyzing the unique characteristics of properties targeted for revitalization. After all, what works perfectly in one location might be entirely unsuitable in another.