Shopping centers as a solution to the shortage of office space
As malls are emptying of customers and retailers are abandoning stores, the space that is quickly being perceived by the spaces of co-marketing and start-up offices
The shopping center Forum Steglitz is one of Berlin’s most famous malls, located in the southwest of the city. It has been a center of attraction for many customers for decades – the forum was built in the 1970s on Schlossstr., a main street with three shopping centers and countless other retailers alongside it. A decade ago Forum Steglitz was purchased by Europa Capital, and after upgrading its occupancy from 80% to 99%, it was sold to Real I.S. in 2013. The acquiring company expected high, safe and long-term yields due to the constant flow of customers to the stores and the dining area offered by the mall, but the reality did not match the optimistic plan.
Whether it’s due to preference for online shopping or the passivity of retailers trying to fit into the digital age, the shops are slowly being abandoned. As successful as they may be, food courts cannot save the situation on their own. Within a few short years the world has become completely different for retailers, and the days when they could sign a ten-year lease with full confidence have already passed.
It seems that the directors of Forum Steglitz were also exposed to the sad reality, which led them to declare recently that the concept of the place will change. For example, the Lidl department store will be replaced by its more prestigious competitor, Edeka, and from 2020 on the second and third floors of the complex will be occupied by offices and co-working spaces.
Similarly, a huge shopping center that opened in Frankfurt a decade ago has never been able to rent out its entire territory and is now looking for tenants from a different field – the flexible office space that is replacing the retailers.
The trend is clear – a sharp shortage of office real estate in Germany, and Berlin in particular, pushing companies into an area that was not natural for them until now, and gaining momentum. The combination of office space and retailers can prove to be a successful symbiosis and thus solve both problems at once.